The better to remedy this difficulty the serial plan was devised, by which new series of stock are issued at intervals—­yearly, half-yearly, quarterly, and even oftener.

Sec. 12. #The continuous plan.# A further development is the continuous plan (usually called the permanent or the Dayton plan), by which much greater flexibility is attained in the organization.  Shares of stock may be subscribed for at any time, each man’s separate subscription of shares being treated as a separate series, and maturing each at its own time.  There is thus, after an association has been for some time in operation, a continuous stream of new members (or new subscriptions) flowing into the association, and a continuous outflow of shareholders whose shares have matured.  The maturing shares of borrowing members discharge their indebtedness to the association; the maturing shares of non-borrowing members are paid in money, or may (if the association has use for the funds) be left as an interest-bearing loan.

Additional funds are obtained when needed by issuing paid-up stock to non-borrowers.  This is convenient at the beginning of an association and when the movement in building is more active than usual.  But if an association has funds that cannot be loaned, outstanding paid-up stock may be called in.  In practice a large part of the paid-up stock as well as of the running stock is subscribed for and held not by large capitalists but by persons of small means, especially “the more frugal element in the working classes.”  Non-borrowing members desiring to withdraw may do so at any time under certain conditions; but to safeguard the association, the laws usually require that thirty days’ notice of intention to withdraw shall be given, that not more than one half of the funds received in any one month shall be paid on withdrawals, and that withdrawing shareholders shall be paid in the order of the notices of intention to withdraw.

The most intelligent and prudent workers were formerly deterred from subscribing by the fear that sickness, unemployment, or other mishap might make it impossible to keep up regular payments.  Now, however, fines for late payment have been almost entirely done away with.  On the other hand, extra payments may be made at any time by borrowing members, to hasten the date when their shares mature and their debt be discharged.  These privileges are possible because of the method of distributing earnings which will now be described.

Sec. 13. #The distribution of earnings.# Every six months is ascertained the amount of the gross earnings which, under this plan, consist almost entirely of interest paid on loans.  From this amount are deducted expenses (and in some states 5 per cent of the total is placed in a “loss fund” to meet possible losses) and the rest is divided in proportion to the amount standing to the credit of each member, being credited to the account of running stock and paid in cash to holders of paid-up stock.