Chapter 82

_United States._--"Building and loan association" is a general term applied in the United States to such institutions as mutual loan associations, homestead aid associations, savings fund and loan associations, co-operative banks, co-operative savings and loan associations, &c. They are private corporations, for the accumulation of savings, and for the loaning of money to build homes. The first association of this kind in the United States of which there is any record was organized at Frankford, a suburb [v.04 p.0714] of Philadelphia, on the 3rd of January 1831, under the title of the Oxford Provident Building Association. Their permanent inception took place between 1840 and 1850. The receipts or capital of the building and loan association consists of periodical payments by the members, interest and premiums paid by borrowing members or others, fixed periodical instalments by borrowing members, fines for failures to pay such fixed instalments, forfeitures, fees for transferring stock, entrance fees, and any other revenues or payments,--all of which go into the common treasury. When the instalment payments and profits of all kinds equal the face value of all the shares issued, the assets, over and above expenses and losses, are apportioned among members, and this apportionment cancels the borrower's debt, while the non-borrower is given the amount of his stock. A man who wishes to borrow, let us say, $1000 for the erection of a house ordinarily takes five shares in an association, each of which, when he has paid all the successive instalments on it, will be worth $200, and he must offer suitable security for his loan, usually the lot on which he is to build. The money is not lent to him at regular rates of interest, as in the case of a savings bank or other financial institution, but is put up at auction usually in open meeting at the time of the payment of dues, and is awarded to the member bidding the highest premium. To secure the $1000 borrowed, the member gives the association a mortgage on his property and pledges his five shares of stock. Some associations, when the demand for money from the shareholders does not exhaust the surplus, lend their funds to persons not shareholders, upon such terms and conditions as may be approved by their directors. Herein lies a danger, for such loans are sometimes made in a speculative way, or on insufficient land value. Some associations make stock loans, or loans on the shares held by a stockholder without real estate security; these vary in different associations, some applying the same rules as to real estate loans. To cancel his debt the stockholder is constantly paying his monthly or semi-monthly dues, until such time as these payments, plus the accumulation of profits through compound interest, mature the shares at $200 each, when he surrenders his shares, and the debt upon his property is cancelled.

Every member of a building and loan association must be a stockholder, and the amount of interest which a member has in a [Sidenote: Shares.] building and loan association is indicated by the number of shares he holds, the age of the shares, and their maturing value. The difference between a stockholder in such an association and one in an ordinary corporation for usual business purposes lies in the fact that in the latter the member or stockholder buys his stock and pays for it at once, and as a rule is not called upon for further payment; all profits on such stocks are received through dividends, the value of shares depending upon the successful operation of the business. In the former the stockholder or member pays a stipulated minimum sum, say $1, when he takes his membership and buys a share of stock. He continues to pay a like sum each month until the aggregate of sums paid, increased by the profits and all other sources of income, amounts to the maturing value of the stock, usually $200, when the stockholder is entitled to the full maturing value of the share and surrenders the same. Shares are usually issued in series. When a second series is issued the issue of the stock of the first series ceases. Profits are distributed and losses apportioned before a new series can be issued. The term during which a series is open for subscription differs, but it usually extends over three or six months, and sometimes a year. Some associations, usually known as perpetual associations, issue a new series of stock without regard to the time of maturity of previous issues. It is the practice in such associations to issue a new series of stock every year. Instead of shares that are paid in instalments, some associations issue prepaid shares and paid-up shares. _Prepaid shares_, known also as partly paid-up shares, are issued at a fixed price per share in advance. They usually participate as fully in the profits as the regular instalment shares, and when the amount originally paid for such shares, together with the dividends accrued thereon, reaches the maturing or par value, they are disposed of in the same manner as regular instalment shares. Some associations, instead of crediting all the profits made on this class of shares, allow a fixed rate of interest on the amount paid therefor at each dividend period, which is paid in cash to the holder thereof. This interest is then deducted from the profits to which the shares are entitled, and the remainder is credited to the shares until such unpaid portion of the profits, added to the amount originally paid, equals the maturing or par value. _Paid-up shares_ are issued upon the payment of the full maturity or par value, when a certificate of paid-up stock is issued, the owners being entitled to receive in cash the amount of all dividends declared thereon, subject to such conditions or limitations as may be agreed upon. These shares sometimes participate as fully in the profits as the regular instalment shares, but in most cases a fixed rate of interest only is allowed, the holders of the shares usually assigning to the association all right to profits above that amount. Certificates of matured shares are also issued to holders of regular instalment shares, who prefer to leave their money with the association as an investment.

Prior to the maturing of a share it has two values, the holding or book value and the withdrawal value. The book value is ascertained by adding all the dues that have been paid to the profits that have accrued; that is to say, it is the actual value of a share at any particular time. The withdrawal value is that amount of the book value which the association is willing to pay to a shareholder who desires to sever his connexion with the association before his share is matured. Some associations do not permit their members to withdraw prior to the maturing of their shares. Then the only way a shareholder can realize upon his shares is by selling them to some other person at whatever price he can obtain. There are twelve or more plans for the withdrawal of funds. Every association has full regulations on all such matters.

The purchase of a share binds the shareholder to the necessity of keeping up his dues, and thus secures to him not only the benefits [Sidenote: Variations in methods.] of a savings bank, but the benefit of constantly accruing compound interest. This accomplishes the first feature of the motive of a building and loan association. The second is accomplished by enabling a man to borrow money for building purposes. It is a moot question whether this method of obtaining money for the building of homes is more or less economical than that of obtaining it from the ordinary savings banks or from other sources. Sometimes the premium which must be paid to secure a loan increases the regular interest to such an amount as to make the building and loan method more expensive than the ordinary method of borrowing money, but a building and loan association has a moral influence upon its members, in that it encourages a regular payment of instalments. Some associations have a fixed or established premium rate, and under such circumstances loans are awarded to the members in the order of their applications or by lot. The premium may consist of the amount which the borrower pays in excess of the legal interest, or it may consist of a certain number of payments of dues or of interest to be made in advance. There are very many plans for the payment of premiums, nearly seventy relating to real estate loans being in vogue in different associations in different parts of the United States; but in nearly all cases the borrower makes his regular payments of dues and interest until the shares pledged have reached maturing value. There is also a great variety of plans for the distribution of profits, something like twenty-five such plans being in existence. The methods of calculating interest and profits are somewhat complicated, but they are all found in the books to which reference will be made. The various plans for the payment of premiums, distribution of profits, and withdrawals, and the calculations under each, are given in full in the ninth annual report of the U.S. commissioner of labour.

Most building and loan associations confine their operations to a small community, usually to the county in which they are situated; but some of them operate on a large scale, extending their business enterprises even beyond the borders of their own state. These national associations are ready to make loans on property anywhere, and sell their shares to any person without reference to his residence. In local associations the total amount of dues paid in by the shareholders forms the basis for the distribution of profits, while in most national associations only a portion of the dues paid in by the shareholders is considered in the distribution. For instance, in a national association the dues are generally 60 cents a share per month, out of which either 8 or 10 cents are carried to an expense fund, the remainder being credited on the loan fund. The expense fund thus created is lost to the shareholders, except in the case of a few associations which carry the unexpended balances to the profit and loss account, and whatever profits are made are apportioned on the amount of dues credited to the loan fund only. The creation of an expense fund in the nationals has sometimes been the source of disaster. Safety or security in both local and national associations depends principally upon the integrity with which their affairs are conducted, and not so much upon the form of organization or the method of distribution. Some of the states--New York, Massachusetts, New Jersey, Ohio, Illinois, California and others--bring building and loan associations under the same general supervision of law thrown around savings banks. In some states nothing is officially known of them beyond the formalities of their incorporation. Though the business of the associations is conducted by men not trained as bankers, it yet meets with rare success. Associations disband when not successful, but when they disband great loss does not occur because the whole business of the association consists of its loans, and these loans are to its own shareholders, as a rule, who hold the securities in their associated forms. The amount of money on hand is always small, because it is sold or lent as fast as paid in. A disbanded association, therefore, simply returns to its own members their own property, and but few real losses occur. Investment in a building and loan association is as nearly absolutely [v.04 p.0715] safe as it can be, for the monthly dues and the accumulated profits, which give the actual capital of the association, are lent or sold, as it is termed, by the association as fast as they accumulate, and upon real estate or upon the stock of the association itself. The opportunities for embezzlement, therefore, or for shrinkage of securities, are reduced to the minimum, and an almost absolute safety of the investment is secured.

The growth of these associations has been very rapid since 1840, and at the opening of the 20th century they numbered nearly 6000. The Federal government, through the department of labour, made an investigation of building and loan associations, and published its report in 1893. The total dues paid in on instalment shares amounted then to $450,667,594. The business represented by this great sum, conducted quietly, with little or no advertising, and without the experienced banker in charge, shows that the common people, in their own ways, are quite competent to take care of their savings, especially when it was shown that but thirty-five of the associations then in existence met with a net loss at the end of their latest fiscal year, and that this loss amounted to only a little over $23,000. Bulletin No. 10 (May 1897) of the U.S. department of labour contained a calculation of the business at that date, based upon such states' reports as were available. That calculation showed a growth in almost every item. During the years of depression ending with 1899 the growth of building and loan associations was naturally slower than in prosperous periods.

See _Ninth Annual Report of U.S.A. Commissioner of Labour_ (1893); _Bulletin_, No. 10 (May 1897), of the Department of Labour; Edmund Rigley, _How to manage Building Associations_ (1873); Seymour Dexter, _A Treatise on Co-operation Savings and Loan Associations_ (New York, 1891); Charles N. Thompson, _A Treatise on Building Associations_ (Chicago, 1892).

(C. D. W.)

BUILTH, or BUILTH WELLS, a market town of Brecknockshire, Wales. Pop. of urban district (1901), 1805. It has a station on the Cambrian line between Moat Lane and Brecon, and two others (high and low levels) at Builth Road about 1¾ m. distant where the London & North-Western and the Cambrian cross one another. It is pleasantly situated in the upper valley of the Wye, in a bend of the river on its right bank below the confluence of its tributary the Irfon. During the summer it is a place of considerable resort for the sake of its waters--saline, chalybeate and sulphur--and it possesses the usual accessories of pump-rooms, baths and a recreation ground. The scenery of the Wye valley, including a succession of rapids just above the town, also attracts many tourists. The town is an important agricultural centre, its fairs for sheep and ponies in particular being well attended.

The town, called in Welsh Llanfair (yn) Muallt, i.e. St Mary's in Builth, took its name from the ancient territorial division of Buallt in which it is situated, which was, according to Nennius, an independent principality in the beginning of the 9th century, and later a cantrev, corresponding to the modern hundred of Builth. Towards the end of the 11th century, when the tide of Norman invasion swept upwards along the Wye valley, the district became a lordship marcher annexed to that of Brecknock, but was again severed from it on the death of William de Breos, when his daughter Matilda brought it to her husband, Roger Mortimer of Wigmore. Its castle, built probably in Newmarch's time, or shortly after, was the most advanced outpost of the invaders in a wild part of Wales where the tendency to revolt was always strong. It was destroyed in 1260 by Llewellyn ab Gruffydd, prince of Wales, with the supposed connivance of Mortimer, but its site was reoccupied by the earl of Lincoln in 1277, and a new castle at once erected. It was with the expectation that he might, with local aid, seize the castle, that Llewellyn invaded this district in December 1282, when he was surprised and killed by Stephen de Frankton in a ravine called Cwm Llewellyn on the left bank of the Irfon, 2½ m. from the town. According to local tradition he was buried at Cefn-y-bedd ("the ridge of the grave") close by, but it is more likely that his headless trunk was taken to Abbey Cwmhir. No other important event was associated with the castle, of which not a stone is now standing. The lordship remained in the marches till the Act of Union 1536, when it was grouped with a number of others so as to form the shire of Brecknock. The town was governed by a local board from 1866 until the establishment of an urban district council in 1894; the urban district was then made conterminous with the civil parish, and in 1898 it was re-named Builth Wells.

BUISSON, FERDINAND (1841- ), French educationalist, was born at Paris on the 20th of December 1841. In 1868, when attached to the teaching staff of the Academy of Geneva, he obtained a philosophical fellowship. In 1870 he settled in Paris, and in the following year was nominated an inspector of primary education. His appointment was, however, strongly opposed by the bishop of Orleans (who saw danger to clerical influence over the schools), and the nomination was cancelled. But the bishop's action only served to draw attention to Buisson's abilities. He was appointed secretary of the statistical commission on primary education, and sent as a delegate to the Vienna exhibition of 1873, and the Philadelphia exhibition of 1876. In 1878 he was instructed to report on the educational section of the Paris exhibition, and in the same year was appointed inspector-general of primary education. In 1879 he was promoted to the directorship of primary education, a post which he occupied until 1896, when he became professor of education at the Sorbonne. At the general election of 1902 he was returned to the chamber of deputies as a radical socialist by the XIII^{me} arrondissement of Paris. He supported the policy of M. Combes, and presided over the commission for the separation of church and state.

BUITENZORG, a hill station in the residency of Batavia, island of Java, Dutch East Indies. It is beautifully situated among the hills at the foot of the Salak volcano, about 860 ft. above sea-level, and has a cool and healthy climate. Buitenzorg is the usual residence of the governor-general of the Dutch East Indies, and is further remarkable on account of its splendid botanical garden and for its popularity as a health resort. The botanic gardens are among the finest in the world; they originally formed a part of the park attached to the palace of the governor-general, and were established in 1817. Under J.S. Teysmann, who became _hortulanus_ in 1830, the collection was extended, and in 1868 was recognized as a government institution with a director. Between this and 1880 a museum, a school of agriculture, and a culture garden were added, and since then library, botanical, chemical, and pharmacological laboratories, and a herbarium have been established. The palace of the governor-general was founded by Governor-General van Imhoff in 1744, and rebuilt after being destroyed by an earthquake in 1834. Buitenzorg is also the seat of the general secretary of the state railway and of the department of mines. Buitenzorg, which is called Bogor by the natives, was once the capital of the princess of Pajajaram. Close by, at _Bata Tulis_ ("inscribed stone"), are some Hindu remains. The district of Buitenzorg (till 1866 an assistant residency) forms the southern part of the residency of Batavia, with an area of 1447 sq. m. It occupies the northern slopes of a range of hills separating it from Preanger, and has a fertile soil. Tea, coffee, cinchona, sugar-cane, rice, nutmegs, cloves and pepper are cultivated.

BUJN[=U]RD, a town of Persia, in the province of Khorasan, in a fertile plain encompassed by hills, in 37° 29' N., 57° 21' E., at an elevation of 3600 ft. Pop. about 8000. Its old name was Buzinjird, and thus it still appears in official registers. It is the chief place of the district of same name, which extends in the west to the borders of Shahrud and Astarabad; in the north it is bounded by Russian Transcaspia, in the east by Kuchan, and in the south by Jovain. The greater part of the population consists of Shadillu Kurds, the remainder being Zafranlu Kurds, Garaili Turks, Goklan Turkomans and Persians.

BUKH[=A]R[=I] [Mahommed ibn Ism[=a]'[=i]l al-Bukh[=a]r[=i]] (810-872), Arabic author of the most generally accepted collection of traditions (_[h.]ad[=i]th_) from Mahomet, was born at Bokhara (_Bukh[=a]r[=a]_), of an Iranian family, in A.H. 194 (A.D. 810). He early distinguished himself in the learning of traditions by heart, and when, in his sixteenth year, his family made the pilgrimage to Mecca, he gathered additions to his store from the authorities along the route. Already, in his eighteenth year, he had devoted himself to the collecting, sifting, testing and arranging of traditions. For that purpose he travelled over the Moslem world, from Egypt to Samarkand, and learned (as the story goes) from over a thousand men three hundred thousand traditions, true and false. He certainly became the acknowledged authority on the subject, and developed a power and speed of memory [v.04 p.0716] which seemed miraculous, even to his contemporaries. His theological position was conservative and anti-rationalistic; he enjoyed the friendship and respect of A[h.]mad Ibn [H.]anbal. In law, he appears to have been a Sh[=a]fi'ite. After sixteen years' absence he returned to Bokhara, and there drew up his _[S.]a[h.][=i][h.]_, a collection of 7275 tested traditions, arranged in chapters so as to afford bases for a complete system of jurisprudence without the use of speculative law, the first book of its kind (see MAHOMMEDAN LAW). He died in A.H. 256, in banishment at Kartank, a suburb of Samarkand. His book has attained a quasi-canonicity in Isl[=a]m, being treated almost like the Koran, and to his grave solemn pilgrimages are made, and prayers are believed to be heard there.

See F. Wüstenfeld, _Sch[=a]fi'iten_, 78 ff.; M^cG. de Slane's transl. of Ibn Khallikan, i. 594 ff.; I. Goldziher, _Mohammedanische Studien_, ii. 157 ff.; Nawawi, _Biogr. Dict._ 86 ff.

(D. B. MA.)