call. If through misfortune he fails to keep up his monthly payments, his money is not confiscated, but is placed to his credit until such time as he desires to withdraw it; and finally, if he is fortunate enough to be able to meet his monthly payments until his shares are retired or matured, he receives the full value of every share which he holds. No other system can show such beneficial results, or is so well calculated to meet the requirements of the man or woman of small means, and there can be no longer any reason why institutions of less merit than our own co-operative banks should receive the patronage of the people for whose protection and benefit these banks were established. However difficult it may be for the average man to understand the working of the co-operative bank system, there can now be no doubt of their efficiency as practical financial institutions or of their service in aiding citizens of the State to save their surplus earnings and to acquire homes.

A consolidated statement of the receipts and disbursements of the banks for the year ending Oct. 31, 1893, is shown in the following table:

Detailed Statement of Receipts and Disbursements for the Year ending Oct. 31, 1893.

A comparison of the consolidated balance sheet on page 234 with the aggregate table of assets of 1892 shows an increase

in total assets during the year of $2,465,646.20. The amount loaned on real estate mortgage has increased $2,484,316.19, and the amount loaned on shares $216,649.54, showing a total increase in the loan account of $2,700,965.73. The amount of cash on hand is $351,836.75, as against $685,046.68 at the close of business in 1892.

The amount of real estate by foreclosure held by the banks at the close of business Oct. 31, 1893, was $105,197.75, an increase of $6,716.76 over the amount shown by the report for 1892. During the year the banks have foreclosed mortgages on real estate to the extent of $105,286.11, and have received from sales of such property the sum of $96,598.65, which is within $8,687.46 of the amount taken by foreclosure. The returns do not disclose whether the same property taken by foreclosure during the year was sold, or whether it was partly that and partly property which had been taken previously. However that may be, the account of property taken and property sold is nearly even, and the increase of real estate by foreclosure is considerably smaller than has been reported for the last four years. Still the amount of real estate held by foreclosure is largely in excess of what it should be, and every effort should be made to reduce the amount so held within reasonable limits by careful selection and systematic inspection.

The selection of property upon which to make loans calls for the exercise of scrupulous care and good judgment. Many elements enter into the calculation. The personal habits and responsibility of the borrower are just as essential subjects of inquiry as the material prosperity of the community in which the property is situated, the character and ownership of surrounding property, the uses to which it may be put, its age, state of repair, and its value as determined by the local assessors for purposes of taxation. It is as important to know the moral hazard of the risk as its physical condition. The payments which are to be made on a co-operative bank mortgage from month to month being compulsory, the borrower's ability and disposition to keep up his payments is a legitimate. subject of inquiry by the security committee. The value of real estate is always enhanced if it is owned by a prudent, indus

made, for if the payments cease, the bank must sooner or later, in the majority of cases, take possession and dispose of the property.

If the banks are conservative in the valuation of real estate offered for loans and limit the amount loaned to a reasonable proportion of that valuation, it would seem to follow that hereafter the amount of real estate added each year by foreclosure must be materially reduced.

MORTGAGE LOAN COMPANIES.

The mortgage loan companies incorporated by this Commonwealth, and under the supervision of this Board, are

The National Mortgage and Debenture Company and
The Globe Investment Company, both of Boston.

The panic which prevailed during the latter part of the year has, as might have been expected, seriously affected the business of these companies; the collection of interest on, and the principal of, loans due has been delayed; sales of land have ceased, and realization of securities generally has been almost impossible.

The National Mortgage and Debenture Company is virtually liquidating its affairs; this must necessarily require considerable time, but the officers hope by judicious and prudent management to eventually pay its bonds in full, and return to the holders of the stock a portion of their investment.

The Globe Investment Company has continued to pay the interest on its debenture bonds, as also upon its guaranteed loans. The officers of the company, acting in their individual capacity, have been engaged in the negotiation of securities which the company could not legally manage, and the profits derived from such business have been paid over to the company and been used to pay its expenses, thus preventing what would otherwise have been a draft upon its assets.

They have recently entered upon negotiations which they hope will enable them not only to continue payments of interest as it becomes due, but also to provide for such guaranteed loans as it may have to pay at the expiration of its guaranty.

Following the practice of others engaged in a similar line of business this company some time since joined in the organization of an auxiliary company under the laws of Nebraska, bearing the same name as the Massachusetts company, and has transferred thereto some portion of its business. The Board has notified the company here that before the time arrives for making its next annual return the affairs of the two companies must be entirely separated, and the business of the Massachusetts company be in no manner involved with that of any other

COLLATERAL LOAN COMPANIES.

The Collateral Loan Company of Boston, incorporated in 1859, and the Workingmen's Loan Association of Boston, incorporated in 1888, are the only companies chartered by the Commonwealth which are doing business of loaning money upon pledge or mortgage of personal security.

One charter was granted at the last session of the Legislature incorporating the Fall River Collateral Loan Association of Fall River, which was approved June 6, 1893, but up to the date of this report the Association had not commenced business.

The business of the Collateral Loan Company is one of considerable detail, yet the excellent system in vogue with this company enables it to produce on the instant the article pledged as collateral for the loan, and rarely, if ever, has any article been lost. Besides paying all its expenses and paying dividends of 8 per cent. on its capital stock, this company has added $10,000 to its surplus fund during the year.

An examination of the Workingmen's Loan Association statement shows a similar degree of successful management.

The value of these companies to the workingman and those of limited means is shown by the extent to which they make use of them. On Oct. 31, 1893, loans by these two companies to the amount of $396,050.57 were outstanding; an increase of $68,360.99 over the aggregate for 1892.

The required annual examination of both these companies has been made, as usual, by a competent expert, under the selection of the Board, and his reports in detail are on file in this office.

A balance sheet showing the condition of these companies, at the close of business Oct. 31, 1893, will be found at the end of this volume.