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 the act of 1874, the Liberator, which had in fact long ceased to do any genuine building society business, hastened the crisis.This society had drawn funds to the amount of more than a million sterling from provident people in all classes of the population and all parts of the country by specious representations, and had applied those funds not to the legitimate purpose of a building society, but to the support of other undertakings in which the same persons were concerned who were the active managers of the society. The consequence was that the whole group of concerns became insolvent (Oct. 1892), and the Liberator depositors and shareholders were defrauded of every penny of their investments. Many of them suffered great distress from the loss of their savings, and some were absolutely ruined. The result was to weaken confidence in building societies generally, and this was very marked in the rapid decline of the amount of the capital of the incorporated building societies. From its highest point (nearly 54 millions) reached in 1887, it fell to below 43 millions in 1895. On some societies, which had adopted the deposit system, a run was made, and several were unable to stand it. The Birkbeck Society was for two days besieged by an anxious crowd of depositors clamouring to withdraw their money; but luckily for that society, and for the building societies generally, a very large portion of its funds was invested in easily convertible securities, and it was enabled by that means to get sufficient assistance from the Bank of England to pay without a moment’s hesitation every depositor who asked for his money. Its credit was so firmly established by this means that many persons sought to pay money in. Had this very large society succumbed, the results would have been disastrous to the whole body of building societies. As the case stood, the energetic means it adopted to save its own credit reacted in favour of the societies generally.

The Liberator disaster convinced everybody that something must be done towards avoiding such calamities in the future. The government of the day brought in a bill for that purpose, and several private members also prepared measures—most of them more stringent than the government bill. All the bills were referred to a select committee, of which Mr Herbert Gladstone was the chairman. As the result of the deliberations of the committee, the Building Societies Act of 1894 was passed. Meanwhile the Rt. Hon. W. L. Jackson (afterwards Lord Allerton), a member of the committee, moved for an address to the crown for a return of the property held in possession by building societies. This was the first time such a return had been called for, and the managers of the societies much resented it; there were no means of enforcing the return, and the consequence was that many large societies failed to make it, notwithstanding frequent applications by the registrar. The act provided that henceforth all incorporated societies should furnish returns in a prescribed form, including schedules showing respectively the mortgages for amounts exceeding £5000; the properties of which the societies had taken possession for more than twelve months through default of the mortgagors; and the mortgages which were more than twelve months in arrear of repayment subscription. The act did not come into operation till the 1st of January 1895, and the first complete return under it was not due till 1896, when it appeared that the properties in possession at the time of Mr Jackson’s return must have been counted for at least seven and a half millions in the assets of the societies. In a few years after the passing of the act the societies reduced their properties in possession from 14% of the whole of the mortgages to 5%, or, in other words, reduced them to one-third of the original amount, from 7 millions to 2 millions. Though this operation must have been attended with some sacrifice in many societies, upon the whole the balance of profit has increased rather than diminished. Thus this provision of the act, though it greatly alarmed the managers of societies, was really a blessing in disguise. The act also gave power to the registrar, upon the application of ten members, to order an inspection of the books of a society, but it did not confer upon individual members the right to inspect the books, which would have been more effective. It empowered the registrar, upon the application of one-fifth of the members, to order an inspection upon oath into the affairs of a society, or to investigate its affairs with a view to dissolution, and even in certain cases to proceed without an application from members. It gave him ample powers to deal with a society which upon such investigation proved to be insolvent, and these were exercised so as to procure the cheap and speedy dissolution of such societies. It also prohibited the future establishment of societies making advances by ballot, or dependent on any chance or lot, and provided an easy method by which existing societies could discontinue the practice of balloting. This method has been adopted in a few instances only. The act, or the circumstances which led to it, has greatly diminished the number of new societies applying for registry.

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