GROWTH DURING 69 YEARS

Southland Times, Issue 23513, 20 May 1938, Page 9

GROWTH DURING 69 YEARS

How Society Began Its Existence PLAN TO USE SURPLUS MONEY On March 23, 1869, some men, well known in the early days of Invercargill, met to devise means of utilizing the surplus money then in the possession of a number of persons. They had the welfare of the province of Southland at heart and realized that the residents should have a reliable means of investing their money. They sought to raise by fortnightly or monthly subscriptions a fund from which to make advances to members to the value of their shares to enable them to acquire freehold or leasehold property, which would be mortgaged by the proposed body for the purpose of securing repayments, and to facilitate the accumulation of small sums of money for those purposes. The result was the formation of the Southland Building and Investment Society. In the then infant settlement of Invercargill there appears to have

been an urgent need for such a society, for it is recorded in The Southland Times that financial matters were in a bad way. The Town Board had borrowed £25,000, but, it having been found by the Supreme Court that the board had no power to collect rates, it resolved that no steps be taken for the election of members. The books and papers were therefore locked up in a safe and it was not till two years after the formation of the Southland Building Society that a Municipal Corporation came into existence. FOUNDERS OF SOCIETY .The names of those who attended the preliminary meeting concerning the formation of the society are as follows: Messrs Kenneth Rose (chairman), the initiator of the movement, Jabez Hay, J. W. Bain, W. Garthwaite, F. Nutter, T. Perkins, G. Trew, C. Broad, B. A. Dickinson, H. E. Osborne, W. J. Matthews, W. B. Scandrett, W. Russell, D. Macrorie, E. D. Butts, and W. H. Hall.

The following resolutions were passed:— That the society about to be formed be called The Southland Building, Land and Investment Society. That the society be terminable That the Otago Building Society’s

rules be adopted. ’ Although the rules were in the first instant based on those of the

Dunedin Society they have from time to time been altered and added to so as to meet the needs which experience and changing circumstances have brought to light, and now it may be claimed that they fully meet the requiremerits of the society. At first funds as available were disposed of by auction, and it is interesting to note the results of this method.

The first recorded sale in the minutes was on July 14, 1869, when £l3OO was disposed of as follows:—£150, represented by six shares at 71/- a share realized £2l 6/-; £6OO, represented by 24 shares at 66/- a share realized £79 4/-; £5O, represented by two shares at 71/- a share realized £7 2/-; £5OO, represented by 20 shares at 72/- a share realized £72; making a total of £l3OO, represented by 52 shares realizing in all £179 12/-. The demand for money appears to have increased for on November 3,1869, another sale of money took place with the following results:—£loo, represented by four shares at £6 9/- a share realized £25 16/-; £175, represented by seven shares at £6 9/- a share realized £45 3/-; £5O, represented by two shares at £6 15/- a share realized £l3 10/-; making a total of, £325, represented by 13 shares realizing in all £64 9/-. But by July 12, 1871, the average price a share had fallen to about 45/-. That system was in marked contrast to the operation of the rule which was later brought into force under which any one could become a shareholder at an entrance fee of onfe shilling a share. That the premiums were profitable is shown by the fact that the following items appear as receipts in the first balance-sheets: 1870. —Premiums, £567 1871. —Premiums, £585 1872. —Premiums, £405 CHANGE MADE IN SYSTEM It was early seen by the directors of the society that the premiums were not likely to prove a permanent or satisfactory source of profit to the society.. At a meeting held on March 15, 1872, the directors decided to recommend that the rules of the society should be altered to do away with the auction system, and that applications should be received for loans at a rate of interest not exceeding 10 per cent, and that new shares of an ultimate value of £25 each be issued quarterly. These proposals were adopted at a meeting of shareholders held on May 14, 1872. That was the turning point in the history of the society. The change made, while retaining any advantages of the terminating system, secured the possibility of continuous and unlimited progress which has so far been exemplified in the history of the society. .