_Loan associations._—It is proper in this connection to refer to loan associations, the growth of recent years. The purpose of such associations is direct coöperation in borrowing and lending among neighbors similarly situated as to property. They are especially adapted to assist wage-earners in securing comfortable homes, for which they can pay gradually from their earnings. The system, however, has been widely extended, to the advantage of different classes of property owners, even to the establishment of coöperative banks among farmers. The essentials to success and safety in such associations are, first, that they shall be strictly local, confined to territory within which mutual acquaintance can give a fair basis for genuine credit; second, the objects sought by individual borrowers must be fairly equal in risk as well as in ends to be served; third, the management must be thoroughly trustworthy, with a genuine interest of all shareholders in the selection of officers; fourth, all shareholders should have similar relations to the association as both borrowers and lenders, and each shareholder’s responsibility should cease at the final settlement of his obligation; fifth, provision should be made for frequent auditing of accounts, official reports and inspection. _Uses of interest._—In closing the subject of interest, it is well to recall the fact that interest exists in the very nature of productive energies, and that ability to transfer the use of property in any form of capital without transferring the interest is most useful to society. It sustains the aged, who must otherwise be wholly dependent, and the childhood of the race in all development of body, mind and soul. Interest sustains the mass of educational and charitable institutions, as well as the individual life of multitudes whose present earnings could not keep body and soul together. Moreover, the possibility of paying interest secures to the enterprising young men of the world the opportunity to make their highest energies productive. Thus the matter of interest pervades the thrift of society as well as the sustenance, and cultivates everywhere that present economy which provides for the rainy day. The fact that nearly one-fifteenth of the population of the United States are depositors in savings banks alone proves the extent and importance of interest to the general welfare. With added facilities for depositing small savings in postal savings banks, the advantage would be still more widely felt, and the general economy in the use of both earnings and capital would be promoted. All this extension of interest-bearing increases the tendency everywhere noticed to a diminution of current rates. With a multiplication of capital in any community, the rates of wages increase, while the rates of interest diminish. Both tendencies are natural effects of the same cause. Chapter XXII. Principles Of Land Rent.