SOUTHLAND BUILDING AND INVESTMENT SOCIETY AND BANK OF DEPOSIT.

NZ Truth, Issue 869, 22 July 1922, Page 3

SOUTHLAND BUILDING AND INVESTMENT SOCIETY AND BANK OF DEPOSIT.

Fifty-Third Annual Report and Balance Sheet. The above wonderfully constituted society caries with it many estimable co-operative .features which from time to time have been commented upon by "Cambist". They need not, therefore, be again stressed here. Up to the present, the whole history of this beneficial institution has been practically a continuous movement of unbroken success. At the same time, it has to be sadly admitted that its shareholders or members have taken everything out of their investments that they could possibly collect. Last year the dividend, or profit, credited to the shareholders was at the rate of 6% per cent, per annum. For the period now under notice, the rate of the distribution is 7 per cent, per annum. In other words an increase of y> per cent, for the year." Ever since "Cambist" reviewed the affairs of the society,- he has consistently demanded large additions to the reserve funds belonging to it- He has been met by a rejoinder that the rules of the society only require the wretchedlysmall provision which appears m the balance sheet, and the directors and shareholders have not, so far, done anything In the direction of making larger additions to this fund. There is now £500,000 standing for advances; a large proportion of the shares continually running into the repayment periods; and the present DANGER OF SLUMPING VALUES m the property market to guard against. Tho reserve fund account \i only £6771, after fifty-three years of business. That plainly notifies that all considerations of permanency; any wish to benefit others was completely ruled out of the scheme, when the (articles were drafted by its founders. The main thing is, that on every occasion upon which -the shareholders had the chance, they grabbed the fraction of profits for themselves, and left the hindmost to take care of themselves as best they could. If this society had any true regard for "those coming after them" it would to-day have had huge accumulations m hand to use for the benfit of borrowers. The report mentions that as it had "to make provision for the large, amount oi matured shares" it had "to restrict lending." Quite so, but that depletion of lending capital has never been considered worth while meeting. No, let the blessed shareholders grab the extra % per cent, and then let them "get out" and leave matters "for the other fellow." It is here that one of the advantages of a reserve fund, belonging to the society, would appear. The accumulated funds would enable it to keep on lending as usual. These funds would continuously assure the whole fabric against loss, and m tho end there would be rather more than an extra % per cent, left over for honest distribution. The co-operative principle demands large reserves, though dividends may be restricted slightly. The objective is PERMANENT BENEFIT for all. Each for each, and all for all. How mean, and how dangerous, that wretched % per cent, appears. May it never come to, actual proof, is "Cambist's" best wish for the society. Now is the time to remedy defects, a.nd that defect should be remedied at once. The society appears to be quite sound on the surface. Let it be sound internally, too. It is a splendid institution, and well worth preservation for the good of Southland, and the Dominion as a whole.