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regular meetings are held throughout. In the commonest form of the Association, each member will at the first meeting pay to the chairman, who is usually the instigator of the scheme, an agreed sum of money, for example $50.
At the second meeting, all members will in secret tender to the chairman on slips of paper the amount of interest which they are prepared to offer on each member's share. The member who tenders the highest interest, say $5 on $50 shares, is awarded all the members' shares for that meeting. The members are then required to pay over their share ($50) less the highest amount of interest tendered, i.e. $50 less $5 = $45. The winner therefore collects $45 from each member for that meeting. When a member has secured the highest tender, he is thereafter regarded as a dead member and at all further meetings has to pay the full share to the successful tenderer whilst himself being debarred from tendering again. In this manner, each member in turn will eventually at some stage become a successful tenderer. At the last meeting, the one remaining member will collect his full amount back again and he will have profited by the interest accruing on the sums loaned to each successful tenderer during the set period.
(d) In the above form of the association, the chairman collects the fixed sum in full from each member at the first meeting repaying the same amount at each subsequent meeting to the successful tenderer. He gets in effect an interest-free loan. In a different form, the chairman may be in the nature of a professional, charging the successful tenderer each month a commission usually fixed at 50% of the fixed sum.
This type of chairman is really acting as a sort of paid manager.
(e) In any form of association, the chairman gives each member at or before the first meeting a booklet containing the names of members and simple rules, including a liability on the chairman in the event of a member dying or backing out.
(f) The aim as far as possible is that each member should at some stage during the set period have the use of the combined shares of all the members. In effect, he is borrowing money at a low rate of interest without knowing exactly when the loan will come. It is the appeal of this gambling element which makes these associations so popular amongst wage-earning Chinese.
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regular meetings are held throughout. In the commonest form of the Association, each member will at the first meeting pay to the chairman, who is usually the instigator of the scheme, an agreed sum of money, for example $50.
At the second meeting, all members will in secret tender to the chairman on slips of paper the amount of interest which they are prepared to offer on each member's share. The member who tenders the highest interest, say $5 on $50 shares, is awarded all the members' shares for that meeting. The members are then required to pay over their share ($50) less the highest amount of interest tendered, i.e. $50 less $5 $45. The winner therefore collects $45 from each member for that meeting. When a member has secured the highest tender, he is thereafter regarded as a dead member and at all further meetings has to pay the full share to the successful tenderer whilst himself being debarred from tendering again. In this manner, each member in turn will eventually at some stage become a successful tenderer. At the last meeting, the one remaining member will collect his full amount back again and he will have profited by the interest accruing on the sums loaned to each successful tenderer during the set period,
(d) In the above form of the association, the chairman collects the fixed sum in full from each member at the first meeting repaying the same amount at each subsequent meeting to the successful tenderer. He gets in effect an interest-free loan, In a different form, the chairman may be in the nature of a professional, charging the successful tenderer each month a commission usually fixed at 50% of the fixed sum.
This type of chairman is really acting as a sort of paid manager.
(e) In any form of association, the chairman gives each member at or before the first meeting a booklet containing the names of members and simple rules, including a liability on the chairman in the event of a member dying or backing out.
(f) The aim as far as possible is that each member should at some stage during the set period have the use of the combined shares of all the members. In effect, he is borrowing money at a low rate of interest without knowing exactly when the loan will It is the appeal of this gambling element which makes these associations so popular amongst wage-earning Chinese,
come.
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