Many working people responded to industrial capitalism with strategies that were neither purely individualistic nor collective. On the one hand, the quest for home ownership, which absorbed so many working-class families, was an individual—or family-based—effort. On the other hand, working people often employed their own community-based institutions such as savings and loan associations to achieve the goal of owning their own homes. Outsiders, like the authors of this 1889 Pennsylvania government report on building and loans associations, might celebrate the ways that these associations served as an “antidote against anarchism.” But for working people themselves, the building and loan associations were simply vehicles for attaining independence and security.
MELVERN, CHESTER COUNTY:
The Malvern and Duffrin Mawr Building and Loan Association, collects premiums in monthly installments. The average bids for year just closed, sixteen month per share. Series issued yearly. Sixteen persons have received aid in securing homes. “I consider,” says Secretary James T. Doran, “the building association that antidote for anarchism.” "I have been connected actively with the building association interest for nearly thirteen years, and the more I see of its beneficent results, the more I become interested in extending its field of work."
The Workingman’s Building and Loan Association, began business six years ago and has paid out nearly $225,000.00. Secretary T.J. Trout, says: “The association is conducted on what is known as the monthly installment plan of paying premium and gives general satisfaction. The society is in a prosperous condition. Every man in our city favors building associations, and almost every man and many women are stockholders. This association has assisted eighty persons to obtain homes. I believe that there are in proportion to population more persons who own their own dwellings in this city than there are in any city in the State, and it is all due to building associations, and the habits of thrift and economy they teach.”
The Summit Hill Building and Loan Association, reports: “Association is to continue ten years. A minimum premium is established. Premiums are deducted in advance. We think such associations are of great benefit to laboring people, making them industrious and economical, and by aid of such societies are able to acquire real estate of their own. this association has aided thirty-four persons to acquire property who without such aid could hardly ever own any.”
Thomas K. Maher, secretary of the Enterprise Loan and Building Association No. 2, says: “Our Association is a serial one and is conducted same as similar ones in Philadelphia. All of our loans were made to parties building or paying for homes. These associations have been a good thing for Altoona. Most of our population is composed of employees of the Pennsylvania railroad and the vast majority of them own their own homes. They are able to build them through membership in one or more of these loans and building associations.”
J. C. Lange, secretary of the Schiller Building and Loan Association, comments as follows: " In my opinion these associations, as conducted in Scranton, are a benefit to the stockholders. They give a poor man the opportunity to save his money as he earns it, month and month, and, after he has saved a few hundred dollars they advance enough money for building a home, which he can pay for as though it were rent. The sympathy of these associations for an unfortunate laborer in arrears is in marked contrast to the stern conduct of money lenders in general. The influence of these associations upon many workmen is as beneficial as a restraint from bad habits, as it is as a means for saving a few dollars for a rainy day. Those who must hire wage earners, and who watch them carefully from day to day, know well that pay day always causes a great deal of dissipation and consequently a loss of working ability. The benefit thus gained by the laborer and by the community can scarcely be estimated in dollars and cents, as it reaches into a sphere when character is formed and strengthened. Steady, reliable, moral workmen are a blessing to any community, not only in the money value of their presence, but in the powerful influence for good they exert upon their fellow-men, their families—the hope of the future. Who can estimate the value of an influence which steadies and saves one whose presence effects society long after his death? These benefits seems to me to more than overbalance the great objection to building associations, that they charge an usurious interest. Usury is, according to the law, I suppose, a charge of more than six per cent. interest. Interest is, and always will be, taken according to the inconvenience of parting with the money and the risk taken of losing the principal. Few persons would loan a poor man money to build a home as building associations do, at the ordinary rate of interest, simply because the security is not the most desirable. Considering these things, usury of the building association kind is not.
Every corporation can be abused. The corporation and the stockholders are responsible for this. The building association is not more objectionable than any of the numerous corporations our state creates in this respect. Our books do not show how many persons have been aided in securing homes. I have only been recently elected secretary. We have, however, about six hundred members, mostly workmen. Our loans are chiefly given to such as wish to build homes. Our payments are one dollar per share per month. The same evening we loan the money to the highest bidder, no bid below fifteen being received. As security we take satisfactory mortgages, notes and insurance policies or transfer of stock as collateral security. The loans are granted by a quorum of directors of which we have nine elected by the stockholders. Other officers are secretary-treasurer, elected in the same manner. The attorney is elected by the directors."
Martin Milne, who is secretary of several building associations, states: "These associations are chartered by and for the poorer classes of people or what you may call workingmen, who, by hard work and saving, try to accumulate a few dollars for the future. If out of their weekly compensation they can save one, two or three dollars they bring it and deposit with the association, and, I venture to say, if this opportunity were not afforded them the money would not be saved nine cases out of ten. Many of our members purchase lots in the outskirts of the city or on the surrounding hill tops, at from one to four hundred dollars per lot, and get small houses built on them. the society advances money on the property, taking first mortgage on same, then instead of these people paying rent they add a few more dollars and pay it into the association. In a few years they have what almost every person works for—a home of their own. In regard to the expenses incurred by the borrower they are very light, only amounting to sixteen or seventeen dollars, including examination, bond and mortgage, recording, etc. We also advance small sums of money, say $100, $200 and $300, to members on notes, as very many members are unable to get these amounts from outside sources, and not being acquainted with the banking institutions some members would be in great distress if it were it not for these associations.
" After a loan is made there is the easy installment plan of paying it off. The interest is dropped at once on the amount of loan paid off. I cheerfully recommend these associations as one of the best institutions for the middle and poorer people. Banks of course are the best for the business people."
Source: Pennsylvania Secretary of Internal Affairs, Seventeenth Annual Report, 1889 (Harrisburg, 1889), C 10–12, 22.