The 1878 Dream of Building Societies
A look at the early mutual loan movement, promising that the average working man could escape the cycle of high rent and finally own his home.
The story, cleaned up
A cleaned-up reading of the newspaper page: spelling and layout repaired, one story lifted off a crowded page. It follows the original closely but it is not a transcription. The original page is below; read it if a detail matters.
Within the past four or five years, some half dozen societies have been formed in San Francisco under the title of 'mutual building and loan societies,' the object of which are but little understood by the general public. A building society properly formed is a joint stock association, the members of which subscribe monthly, and, in proportion to the number of shares they hold, pay certain fixed sums into the common fund. This fund is employed by lending it out at interest to such members as desire advances, and the interest so received makes fresh capital. The sums of money raised in this manner are sufficient to make advances large enough to enable workmen and others to acquire building lots or houses. The payments of borrowers are so calculated as to enable them to repay by equal monthly installments, within a specified period, the sum borrowed. These societies enable the ordinary man to become, to a small extent, a capitalist. A large portion of young men's incomes is absorbed by the payment of rent, especially 'roomers,' who pay much more for rooms relatively than capitalists do for houses on Nob Hill. Hired articles are dearest, all are ready to admit. Nevertheless, people who would move heaven and earth to purchase their furniture outright are quite content to rent their houses. The first effect of giving a man a homestead is to make him conservative. There can be no doubt that properly managed building societies are an unmixed good to people of small means; they offer to every man a chance to become his own landlord.
“A large portion of young men's incomes is absorbed by the payment of rent... Nevertheless, people who would move heaven and earth to purchase their furniture outright are quite content to rent their houses.”
This 1878 analysis reflects a timeless Seattle anxiety: the struggle of 'roomers' and workers to escape the high cost of rent and the looming dominance of capital. While the specific financial vehicles of the 19th century have evolved, the dream of the 'homestead' as a buffer against urban instability remains the central, unresolved pillar of local civic life.
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