All people in any way connected with building and loan associations in the United States may submit as many suggestions as they desire, mailing them to the "Building and Loan Name Editor," THE AMERICAN BUILDING ASSOCIATION NEWS, 15 West Sixth Street, Cincinnati, Ohio.

The contest will close December 1, 1922, and all names or words sent in will be delivered to the Contest Committee, which will select the winner and award the prize.

This committee is comprised of James M. McKay, of Ohio; Geo. E. McKinnis, of Oklahoma; Walter F. McDowell, of Washington; Wm. C. Sheppard, of Michigan; H. W. Pinkham, of Massachusetts; W. G. Weeks, of Louisiana; Geo. W. Cliffe, of Pennsylvania.

Committee to Confer With Lumbermen

FOR

and Realtors.

OR some time past it has been felt that closer co-operation between the building material interests, the realtors and the savings and loan associations would accrue to the benefit of all concerned. To promote this idea a committee was ordered appointed by the Portland convention to confer with the aforementioned interests. The committee consists of Messrs. Thomas J. Fitzmorris, of Omaha, Nebr.; F. P. Stevens, of Kansas City, Mo., and F. L. Wells, of Wellsville, Ohio.

Oklahoma Judge Decides Against
Three Per Cent Concerns.

In a mandamus action brought by several three per cent loan concerns to compel the State Bank Commissioner of Oklahoma to issue them a license to do business, Judge Clark of the District Court of Oklahoma City denied the petition and immediately afterward, acting on the plea of the Assistant Attorney-General King, issued an injunction against the American Home Builders' association and Agnes Crow, its manager, forbidding it to continue business transactions.

"This decision will spell defeat for at least a dozen similar projects over the state," said King, discussing the decision. King declared he would act immediately in cases of three companies already doing business.

The bank commissioner held in refusing to permit the operation of the company that its plan and those of similar organizations is financially unsound and that there is no method by which the state or subscribers can hold such organizations to an accounting. None of the companies in question is incorporated.

A

Congressional Candidates.

GROUP of bankers, headed by officers, are beginning to

organize a movement for the repeal of the exemption of $300 income from building and loan deposits as provided in the Revenue Act.

It is reported a new bill has already been drafted and will again be introduced soon, according to the present plans, but this will not be pressed actively until the next congressional session, opening in December. Our information is that the banks are planning to enlist a large number of sympathetic business and financial interests in their fight for repeal of this provision, and that already a good deal of sentiment for the repeal has been developed among members of Congress, some of whom voted for the exemption in the Revenue Bill.

It will be well for the building association interests of the United States to have their membership interview the candidates for Congress and ask for their views on this important matter.

Congress has recognized the value of granting to the building association membership the same privileges that have been extended in other ways to other interests, for instance, the tax exempt bonds in the Farm Loan Act, the Federal Reserve Notes, etc., and we should not stand idly by when selfish interests are trying to deprive the associations of this concession.

This is the only financial institution that has offered to American workingmen an opportunity to get a home on easy installments at the proper rate of interest.

Not Bad for an Off Year.

LTHOUGH the past twelve months were marked by indus

trial depression and unemployment, that condition was not noticably reflected in the report of the conditions of the building associations of the country as submitted by Secretary H. F. Cellarius to the Portland convention. The associations practically maintained the rate of progress made for some years past.

The increase in membership was larger than in any year in the history of the league, amounting to 847,000 new members, or more than 17 per cent. The total membership now numbers 5,809,888.

The increase in assets totaled $370,849,650, or nearly 15 per cent. The total assets now are $2,890,764,621.

Corner Chats at Conventions.

One of the real benefits of attending a convention, which is not included in the formal program, is referred to by the Building Societies' Gazette, of England, as follows:

"The best work of the Building Societies' Association Conference is not done at the public meetings or at the dinners, luncheons, teas, and excursions. The former are taken up with important business, the bringing prominently before the public the great work building societies are doing, their benefit to the community at large, their wonderful progress, and their present commanding position.

"It is the quiet chats in cosy corners, where two or three members foregather from different parts of the country, that useful work is done, where questions are asked and answered upon points of practice, rates of interest discussed, the way further advances, or alterations in the terms of the original mortgage, should be secured, whether by way of memorandum or a formal short deed endorsed or annexed to the original, what, when, and how deductions may be made from the interest paid or credited in the return or assessment for income tax, the amount of advances and what they should be based upon, cost, purchase price, prewar value, or what the property would fetch at a sale; and legal points about which solicitors are not clear and therefore suggest counsel's opinion. One member is thoroughly conversant with a matter he has had experience of, another knows all the details of some other matter, and their companions have the benefit of their knowledge. These corner interchanges of view are very valuable. There cannot be entire uniformity of procedure all over the country; the circumstances are very different in one part from that in another; but the underlying principles are the same. There are many matters like these which cannot conveniently be discussed in public; they are better dealt with in conversation. It is not always wise to say in a speech all one would like to say or all one thinks.

"To hear others talking on these subjects, even if one takes no part in the discussion, is a piece of education. Those who do not join in the conversation are earnest listeners, and when they get back to their own society can speak with authority from what they have heard. Some are very fond of talking about "What my society does," and give one the impression that they think it the only way, and that others should follow their example. These corner chats are very useful; they save the time of the public meetings, or being told at them things that are common to all. Delegates attend brimful of ideas which must find expression. They speak more freely and at their ease in conversation than they would at a formal meeting where there may be reporters. Sitting down they can speak their minds more comfortably and with greater freedom than when standing up. A little talk with one's fellows relieves the mind of a lot of pride and prejudice."

Bonus for Securing Loans Held Illegal.

Judge Porter of the Superior Court, of Philadelphia, on July 14 handed down on important decision, declaring illegal the practice of charging bonuses for placing building and loan association mortgages by officers of the association.

The case is the first ever reviewed in the appellate courts of the state testing the right of a director or officer of a building and loan association to charge for placing of a mortgage loan.

The suit was by Ben T. Welch, a local real-estate operator, against John W. Harrigan for commission for placing mortgage loan in the former's association. The facts set forth in Judge Porter's opinion indicate that Welch was the vice-president and a member of the board of directors of the Central Building and Loan Association, of Philadelphia, and also a local real estate broker, while the defendant, Harrigan, had been for years a stockholder in the same association, which held a $5,000 mortgage on his property for a loan made to him.

Harrigan applied to Welsh for an increased mortgage loan of $15,000, out of which the old mortgage loan was to be paid for and satisfied. After the approval of the loan, Welsh presented a bill to Harrigan for a broker's commission of three per cent, but Harrigan refused to complete the transaction upon that basis. It appears that Welsh presided at the meeting of the association which approved the increased loan, but did not vote on the application.

The practice of charging bonuses was denounced by Judge Porter in his opinion as being "secret profits" and as such prohibited by law.

Judge Porter cited principles of law on the subject of such profit making as follows:

"The director of a corporation is a trustee for the entire body of stockholders, and by assuming office he undertakes to give his best judgment in the interest of the corporation in all matters in which he acts for it, untrammeled by any hostile interest in himself or others; and all secret profits derived by him in any dealing in regard to the corporate enterprise must be accounted for to the corporation.

"When he is to make a profit out of a transaction which involves a loan of money by the corporation he must fully disclose the facts, or he may afterward be called upon to disgorge his secret profits.

"The law has ceased to look at the mere form of the device employed; it now pierces through the surface and seizes upon the evils which lie within. "These general rules work no hardship to any one; they simply mean that those intrusted with the management of a corporation must be above board, fair and honest with its stockholders in all matters concerning the common enterprise or its control.

"The stockholders of building and loan associations are to a great extent people of moderate means and they are entitled to the protection which these well-established principles of law give to all stockholders to protect them against rapacity of officers who seek to make a profit for themselves."

In a letter to the Philadelphia Ledger, approving the decision of Judge Porter, James Slater, of the State Banking Department,

indicates that practices were springing up that are entirely at variance with the fundamentals of building and loan associations, saying:

"If the decisions were not needed for any other purpose, they would fit the case of the conveyancer and realtor in Philadelphia who recently sold his rights to the business of six societies for $10,000! He controlled all the loans and no directors or committees made any loans that this man did not O. K. He boasted that he split his commissions with the officers of the loan societies."

The Ledger makes the following editorial comment:

Honest officials of the building and loan associations of Pennsylvania, in which upward of $800,000,000 of the people's money is invested, will applaud the decision of the Superior Court declaring illegal the practice of certain officers of loan societies in exacting from borrowers a bonus or commission for securing loans. This is an evil of long standing, which robs the association and the shareholders of their profits, for it diverts into the pockets of individuals for their own private gain moneys which belong to the shareholders. Another wrong growing out of the practice has been to establish a system of preference and favoritism as between borrowers.

This evil has been called repeatedly to the attention of the building association world through these columns, and it had grown to such serious proportions that the State Banking Commissioner, who has official supervision of the loan and building associations, brought the subject to the notice of the legislature in 1919 and again in 1921. At both sessions Mr. Fisher prepared bills making it a misdemeanor for officers of building and loan associations, banks and trust companies to receive commission or bonus on any loan made by the institution of which they are officers. In each_instance the House promptly passed the measure; but they failed in the Senate-under what sinister influences may be imagined. As Commissioner Fisher himself pointed out last January in a letter to the Public Ledger commending it for its "distinct public service in lending its columns to discussion of the subject," it is only fair to say that the officers of financial institutions generally do not indulge in the practice complained of.

Apart from the injustice to individuals and shareholders arising from these commission exactions, the alluring profits thus obtained have operated to draw to the building associations a class of men bent on illegitimate gains, lowering the high standard of a beneficent institution that not only has stimulated habits of thrift and enabled many thousands of Philadelphians to become home owners, but has been copied all over the country. Encouraged and supported, however, by the ruling of the superior court, the honestly conducted associations are now armed to rout out the elements which have fattened at the expense of shareholders and investors. There is, of course, no possible objection to the payment of commissions, earned in a legitimate way by realtors who secure loans for their clients from building associations, but when the go-between sits behind the door and parcels out the money of the shareholders to those who will pay and denies loans to all others, the time is ripe for his total elimination from the business.

Some "Famous Sayings."

Who said that money wasn't to spend?
Never mind the expense; I can stand it.
I want the best, no matter what it costs.

Never mind the price. I'll take them anyway.

We've got to do it to keep up our reputation.

As long as it's my money I'm going to spend it as I please.