Building Societies
Sm,—Mr. Marvin appears to represent the point of view of the societies belonging to the Association, who believe in a closed shop for building societies and regard any show of initiative by an individual society as a crime. Last year Mr. Marvin sought to belittle those societies audacious enough to pay interest at the objectionably high rate of 21 per cent. But very soon afterwards the great bulk of the societies increased their own rates to 21- per cent. It is plain therefore that our offence was not that we paid 24 per cent, but that 'we paid it a little before the others. We were impudent enough to be the first in the field. Now the attack switches, naturally enough, to the societies able to pay 21 per cent. Let Mr. Marvin take warning from last time. Not all investors have short memories.
Mr. Marvin talks, with an assumption of lofty distaste, about the societies who do not hold a balance fairly between borrowers and inves- tors but prefer rather to make the utmost profit for their shareholders. Which are these societies ? No sensible society would want to mulct its borrowers in order to pay high dividends to its investors: but if it did, where would such accommodating borrowers come from ? In the case of my own society we only grant loans to our own members who, I am sure, would very soon make themselves heard if we attempted
to exact unreasonable charges from them; and we pay a good rate of interest, not because terms for borrowers are high, but in consequence of economy and efficiency in administration. It is not yet compulsory for a thriving building society to restrict its rate of interest merely because a number of other societies dislike competition. In the earlier days of building societies, when the movement had inspiration and an almost religious fervour, competition was- strong. The societies flourished on it. But they are now troubled by arteriosclerosis.—Yours
Managing Director, 20 Bride Lane, E.C.4. St. Pancras Building Society.
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