The  premium,  if  any,  is  deducted  from  the  loan,  the  borrower  receiving
the  remainder.  He  gives  security  for  the  gross  amount  of  the  loan,
and  pays  interest  thereon.  The  premium  bid  determines  the  time  for
which  the  loan  is  to  run,  the  time  decreasing  as  the  premium  increases.
No  part  of  the  premium  is  returned  to  the  borrower  in  case  of  the  re-
payment of  the  loan  before  the  expiration  of  the  time  for  which  it  is
made.  ,

Illustration:  Weekly  payments  on  each  loan  of  $100  arc  as  follows:
Dues,  25  cents;  interest,  15  cents;  total,  40  cents.  On  a  loan  made  at
par  these  payments  continue  for  eighty-five  months;  on  a  loan  made  at
10  per  cent  premium,  payments  continue  seventy-five  months,  and  so
ou  reducing  the  time  one  month  for  each  $1  of  premium  bid,  except
that  on  loans  running  for  less  than  four  years  oiie  month  is  deducted
for  each  $1.25  of  premium  bid.
The  number  of  associations  operating  under  this  plan  is  as  follows:

Local. — Kansas,  1;  total  local  associations,  1.
PLAN  15.
Loans  are  awarded  to  shareholders  bidding  the  highest  premium.
The  premium  is  deducted  from  the  loan  in  advance,  the  borrower  receiv-
ing the  remainder.  He  paj'S  interest  only  on  the  amount  actually
received.    No  part  of  the  premium  paid  in  advance  is  returned  to  the


398        REPORT  OF  THE  CQMMISSIONER  OF  LABOR.
borrower  in  case  of  tlie  repayment  of  tto  loan  before  tl»e  ixmturity  of
the  sliareB.
