Building Societies
SIR.—As one who has Professional connections with a number of building societies, some of which pay two and a half per cent, while others pay less, some of which are big while others are small, and some of which are members of the Association while others are not, I should very much like to make a few comments on your article on building societies in the Spectator ef June 22nd. The writer of that article advises his readers (in effect) to invest in societies paying-less than two and a half per cent., which he says is thE rate paid Xy societies " on the fringe" of the movement—that is to say by outsiders ! But if wise and economical management enables a society to pay two and a half per cent, why shouldn't it do so ? Surely a society would be unfair to withhold its full profit from its.members after adequate provision for reserves was made.
Then, apart from the specjal case of "local" societies with exceptional traditions, your writer seemito place great value on size. Why ? All the societies with huge assets have huge liabilities, too. It is the quality of the mortgage assets which decides the strength of a building society, and compared with that quality neither size nor reserves matter very
much Mr. Marvin also wants his readers to confine their investing to the old societies. Have we already reached the fossilised state when all new enterprise ,s suspect and only the old vested interests can be permitted to carry on, free from the disturbing competition of younger rivals ? After all, and incredible as it may seem, the oldest of the existing societies was young once, and was probably as sound and safe, pound for pound, in its first year as it is today.
But what does give concern, in a paper with the traditions of the Spectator, is the advice to investors to give preference to those societies which belong to the Association. Have we all become Socialists and trade unionists ? Are independence and initiative no longer virtues ? I see a good deal of the iniernal workings of a number of societies, not all of whom belong to the Association, and while I do not think there is any difference between them in matters of integrity and efficiency I am sure that the societies outside the fold seem, on the whole, to be less entangled in rid tape, more capable of quick and decisive action, than those within. T.he affairs-of building societies are, of course, watched over very carefully by the, Registrar of Friendly Societies: and it is hard to see that, the Association does very much for its members or the public, beyond enabling the former to be "regular guys" (in the best Babbitt tradition) at endless beanfeasts at the heartier seaside resorts, where, posing i4 happy circles round the Mayor or, in more earnest mood, against the impf.s. ive background of some academic building temporarily deserted by its rightful occupants, they are endlessly photographed for the picture-pages of their official magazine.—Yours faithfully,
SOLICITOR.
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