Well the holidays are done. Before we say goodbye to them I’d like to write about one of my holiday favorite movies; It’s A Wonderful Life directed by Frank Capra. This story which can be taken on so many levels seems to speak also about today’s world.
If you have never seen this film it is a bittersweet post-WWII war tale of an earnest and good man George Bailey (James Stewart) who lives in a small town Bedford Falls. George wants to get out of that small town and makes his fortune in the world. Well through a series of events out of his control George does the better thing for others including taking over his fathers Building and Loan which is for the good of a whole town. George struggles against Potter (Lionel Barrymore) a greedy banker and business man. Potter controls real estate, the Bank, stores the whole town and keeps the towns people without a way to better themselves.
George eventually marries Mary (Donna Reed) a loving and stand-behind-your-man kind of woman and has several children. He manages to keep the Building and Loan afloat, even through the harrowing days of the Depression. By the conniving hand and manipulation of Potter, George is wrongfully accused of mishandling funds and faces bankruptcy, scandal and even possible imprisonment. Despondent, he is about to take his own life, but the people who love him have been praying for him, so God sends an angel, Clarence (Henry Travers), to prevent his fatal act. When George states, "I wish I was never born," Clarence shows him what life in the town and elsewhere would be like had that been the case.
The ending is better seen than words can do but George learns that his life has had a purpose and his efforts have made the lives of others better. The town rallies around George supporting him collectively with their small and big donations and by extension supporting their own town and themselves and Clarence the angel earns his angel wings.
There are lots of themes and morals that underscore this movie. But I thought Generation X and Y and even the Baby Boomers could use a brief history on the importance of the Savings and Loan and what it meant for the average American because Potter represents one kind of American and George represents another kind.
Building and Loans.
You now live in an American where only one-third of the Americans owned a home and they were the wealthy. Your annual income might be $1500, maybe up to $2,200.00 if you were a white collar accountant. You are paying rent to live in marginal housing so you borrow the money to buy your own house which might be about $7000.00.
The situation you face is that you are only paying interest on the money and in five years you have to pay back the entire loan amount. As such, many people were either perpetually in debt in a continuous cycle of refinancing their home purchase, or they lost their home through foreclosure when they were unable to make the balloon payment at the end of the term of that loan.
Now a man like George Bailey has a Building and Loan Association and they specialize in accepting savings deposit and then taking the money and lending it back to the people in the community. You have an association of people who live and work in the same place lending money to the same people. They are often called mutual savings banks meaning the depositors and borrowers are members with voting rights and have the ability to direct the financial AND managerial goals of the Building and Loan.
So you have an organization run locally for the benefit of the local community and not to make profits for a faceless corporation and bring large bonuses for executives that live elsewhere - not a bad concept.
Now at last you have a chance of ownership and knowing if you are consistent and pay your mortgage at sometime in the future you will not have to pay rent to anyone.
The 1950’s were the hay days of the building and loan associations using their 3-6-3 policy. The idea was to pay 3% interest for deposits and charge 6% on a thirty year mortgage with monthly amortization payments and be out playing golf by three o’clock every day.
The 1950’s saw a building boom to meet the new demand for housing cause by the swell in new families.
The building and loans of George Bailey helped create the stability for what would become the halcyon days that were the 1950’s.
In the movie George represent one kind of America where people could prosper, raise a family, and build a nest egg for their retirement years while Potter’s America people lived in debt, families and individuals lived pay check to pay check with nothing for their later years.
Yes I know this is a simple view of the economy. The point is It’s A Wonderful Life does give us a slice of the economic times of the 30’s, 40’s which became the Fabulous 50’s. The movie is more than a story about hard economic times but next time you watch the scene where there is a run a the local town bank and then on George’s building and loan, listen to how George explains what he does and how it benefits the whole town of Bedford Falls. It’s brief but entertaining economic lesson that we might learn some lesson for ourselves today.
If you want to read more about Building and Loans try these links:
http://www.answers.com/topic/building-and-loan-associations#ixzz1hxRGM0bn
http://en.wikipedia.org/wiki/Savings_and_loan_association
No comments:
Post a Comment