while to invest. For this reason, a well-
constituted Building Society will not be able to
do more than promise the investing members
a good, but reasonable interest; and will be
quite unable to profess that borrowers shall
obtain money for less than will enable the
investers, after payment of the society's working
expenses, and a margin left for provision
against losses, to derive out of them the
necessary profit. A reserve fund must be
retained, for security against losses, and whenever
this reserve accumulates unnecessarily, it
is divided usually among the investing
members, in the shape of a bonus; thoroughly to
carry out the mutual principle, it would be
better that this surplus should be divided
among members of both classes.

Building Societies are now ordinarily of the
kind called permanent. This is the form to
which they must all come at last, the only
form in which they are trustworthy. The
permanent society being established for
indefinite duration, does business as it can, and
business grows with age and increase of
connexion. In a permanent society, whoever
pleases may assume a share, and without
liability for back payments, may arrange to
pay instalments during any term of years for
the receipt of their value, at the end of that
term, when the compound interest is added.
If the instalments at any time cannot be paid,
any member can withdraw the value of his
share. On the other hand, borrowers can go
when they please, and obtain money on the
requisite security, agreeing to repay by instalments,
spread over a length of time selected
by themselves. Business of each class is
always coming, and a just and safe scale
having been established, whether the whole
amount of business done be small or great, the
society keeps all its promises, and is
completely safe, as long as the directors hold the
balance evenly between the borrowers and
lenders, and as long as the attorney and
surveyor do their duty, in seeing that loans are
made on good security. If the attorney be
guilty of neglect, he is liable for damages; and
for the few stray losses that occur, a well-
regulated society has provided so far with its
reserve fund, that they do not affect the per-
centage payable to members.

Let us here not omit to draw a broad black
line between the Building Societies, of which
we have been speaking, and the Loan
Societies abounding in large towns. There is
nothing mutual in a Loan Society; it is a
purely one-sided affair, established not to
aid the provident, but to make money by
the desperate.

We have left but little space for the last
portion of our subject—Land Societies. That
does not matter very much, because a few
words will dismiss them. In principle, they
resemble Building Clubs, and in all those
points of resemblance they are good. They
are not of old standing, though they are
increasing fast. They were established, it is
well known, in 1847, for the purpose of
creating county voters. Money is invested in
them precisely as in Building Clubs, and the
profit consists not (so far as the land question
goes) in lending it out elsewhere, but in using
it for the purchase of land in large quantities,
and dividing it then into parcels, selling it to
members at the wholesale (or almost half)
price. With this plan, the general principles
of Building Investment Clubs have been very
usefully combined. In the first scheme, the
parcels re-sold were to be of such extent as to
be worth at least a rent of forty shillings
a year; a freehold of that value giving title to
a vote. A court of law has emphatically
decided that this motive is legal. We do not
touch on the political side of the matter, but
as a matter of prudential investment,
thousands of men would find a "forty shilling freehold"
dear, even at half-price. The political
motive creates a fictitious position also for the
scheme. For example, Land Societies can by
no strain of law be made to come under the
Building Act. They are Building Societies in
a great part of their constitution, and in right
of that part they can enroll themselves. But
they cannot purchase land, and for this part
of their operation are obliged to depend upon
some party who, professing independence,
purchases land for the society in his own
name, and legally upon his own responsibility.
For a political motive it is easy to find men
who will take this risk upon themselves; but
when the people shall have begun to convert
Land Societies, as they are already doing, into
sources of investment irrespective of all politics,
they will begin more and more to have only
themselves to trust in; and the want of legal
cover for all the operations of a Freehold Land
Society may then begin to be felt very
inconveniently. There can be no doubt that such
societies are good, that they will spread,
and that the law will one day pull its
blanket over them; at present, however,
they lie just so much exposed as to make
it certain, that where nothing is desired
beyond the prudent investment of small
earnings, they are much inferior to the
Permanent Building Societies, which we have
already described.

For the descriptions we have been able to
give, we are indebted to the perusal of two
books published in the present year, which we
urge upon the study of all those to whom is
entrusted the responsibility of taking active
part in the formation or management of
Building and Land Societies. The law, as it
affects the question, will be found fully detailed
in Mr. Stone's volume on Benefit Building
Societies. For the finance and all the minute
details which go to the full practical
understanding and management of these
undertakings; for a distinct marking of the rocks
and shoals that lie in the projector's way, and
for the tracing of his proper track, we refer to
the second edition, now published, of a work
on "Industrial Investment and Emigration,"