886 can be traced back to its rash policy of industrial investment, including loans of 65,000 to the Dunraven Colliery in south Wales. It had strayed dangerously too far from investing locally in housing. Failure however did not always mean loss for members, whether as lenders or borrowers, for there

But the movement was about to be shaken to its foundations in the early 1890s by the failure of what was then by far its largest and most flamboyant member, the Liberator Building Society. The Liberator was first registered in 1868 and soon achieved, under the leadership of Jabez Spencer Balfour, an unprecedented rate of 330 growth, securing 1 million of assets within its first ten years. The important single factor contributing to its rapid growth was the strong support of its membership in chapels and temperance associations, stimulated by a vast network of hundreds of agents among ministers, elders and laymen who found the cause appealing and the commissions paid equally acceptable. The enormous and well-founded success of its first decade led on to unjustified excesses by which the nature of the society was changed into s

It had direct connections with seven other companies including the London and General Bank, the House and Land Investment Trust and J. W. Hobbs and Co. a speculative builder to which company alone the Liberator made advances of over 2 million, much of this being secured merely by second or third mortgages. Thus the society became involved in the partial ownership of banks, hotels, chapels, collieries, chemical companies, land reclamation sites and harbour constructions, including involvement in the repeated rebuilding of a vulnerable sea wall (with a valuation in the s equal to its total repeated rebuilding costs!). The failure of Balfours London and General Bank in September 1892 brought down the whole house of cards, with total losses of over 8 million to the depositors and shareholders of the Liberator and its associated companies. Six of the directors were altogether sentenced to a total of thirty-seven years imprisonm

The fall of the Liberator brought down a number of other societies, including the London Provident Society. The inevitable parliamentary inquiry of 1893 led on to the Building Societies Act of 1894 which attempted to achieve a number of objectives mainly by means of greater publicity. First, it demanded fuller information from every registered society and required annual accounts to be properly audited and certified before being sent on to the Chief Registrar. It gave the Registrar much greater powers, including the right to suspend or cancel any societys certificate after due investigation. Thirdly, advances on second or subsequent mortgages were forbidden; and fourthly, the various systems for balloting in mortgages were ended so far as new societies were concerned. In view of the considerable if temporary importance achieved by various balloting and similar unconventional societies during the years 185090, the subject requires at leas