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became necessary to arrange a conference with the Secretary of
State, with the result that building association charters may be
passed on by the Commission before certificate of authorization to
do business is issued by the Secretary of State.

Building association powers should be more clearly defined;
this seems necessary, in the opinion of the Commission, as a safe-
guard to the associations themselves and as a guide to the allowance
of proper credits or deductions to be made in the assessments.

Building associations, properly conducted, serve a very useful
purpose in the community and enable thousands of persons to
acquire their own homes.

The business of lending money on mortgages on real estate
within Maryland is to be encouraged and fostered, and there would
seem to be no objection to loans on judgments when the borrower
owns real property. Again, the law contemplates loans to members
on hypothecation of shares, but provides that no loan of this kind
should be in excess of the amount paid in.

Under the present provisions of the Code, there is no complete
way of assessing the shares except in the aggregate.

The Commission suggests a plan as follows:

That there should be imposed an annual franchise tax amount-
ing to 1/10 of 1% on the amount of paid-in capital against those cor-
porations which conduct strictly the business of a building or home-
stead association as provided for in the Code; those that carry on
any business, either in whole or in part, that is not in strict accord-
ance with the law should be taxed in addition on investments (other
than those secured by real estate, mortgages, judgments and hypothe-
cation of shares representing an amount equal to the loan) accord-
ing to the regular rate of taxation in the locality in which the
association is located.

The tax should be apportioned as the present franchise tax
imposed on savings banks—that is, one-quarter to the State and
three-quarters to the locality where such corporation is located.

GUARANTY, SURETY AND FIDELITY COMPANIES

Article 23, Section 378 et seq., of the Code of Public General
Laws set forth the provision governing Guaranty, Surety and Fidel-