The Sun.
London, England, 1841-01-09 00:00:00

MONEY MARKET and CITY NEWS

(FRIDAY EVENING.)
CHRONICLE.—This was the first day for the pay-
ment of the dividends to the public, but the business done
in the English funds was not to the extent usual on such
occasions. We attribute this in some measure to the seve-
rity of the weather, and the intense cold of the morning
having prevented many people from leaving their homes.
The numerous cases reported at the Police-offices re-
garding the operations of loan and discount societies. have
induced us to make some inquiry into the nature and ex-
tent of these establishments in the metropolis. Loan socie-
ties were legalised under provisions of an Act 5 and 6
William IV. ; but this was so loosely drawn up, that it
was found necessary for the protection of the industrious
classes to repeal it, and to place these societies under the
3d and 4th Victoria, cap. 110, which is now the regulating
statute. Under the Act of William, 250 to 300 socie-

ties had their laws enrolled by the proper officer.
Under that of Victoria, the number certified does not
much exceed 50; and it is believed that several of
these are not in operation. The only loan societies pro-
perly so called, are those enrolled under the Act of Vic.
toria. There are, however, in the metropolis and else-
where, a great number of societies calling themselves loan
societies, which are under no law whatever, and which
take advantage of the necessities of the working classes,
by exacting exorbitant sums for their advances. We be-
lieve there are as many as 150 such discount companies in
the metropolis, who derive enormous profits by such means,
while the number enrolled under the statute, does
not much exceed thirty or forty. The " loan societies,"
enrolled under the statute, advance sums of 5/., 101.,
or 15/., and they are entitled to twelve per cent.
The amount of interest allowed by the Act is, say
6s. for each 5L advanced, to be repaid by weekly
instalments of 23. for each 5/. No charge is al-
lowed towards expense of office, or any fine in case
of default. No charge for letters writtea to the sureties
to inform them of their liability ; and the whole business
of the office is paid for by is. 6d., which each applicant
has to pay to the clerk at the time of application, receiving
in return form of application and book of rules. Should
a persdu apply for a 15/. loan, the society would require
three securities who must all be diligently inquired into,
for which is. 6d. is charged. The conditions on which
the business is managed will be better understood, how-
ever, from the fullowing account, which we take from a
hand-bill now in circulation by a loan society in Hounds.
ditch. with a capital stated at 12,5001., which says :
,‘ This society is established pursuant to the provisions
of the act, for the purpose of assisting the middle and
working classes, by granting loans of 5/. 10/ and 151. and
receiving it back by weekly instalments of 2s. for Si. ; 43.
for 101. ; and 6s. for 151. ; the first re-payment to be
made on the eleventh day after the loan is granted. The
security required is one respectable housekeeper, of twelve
months' standing, for a loan of 5/. ; and two respectable
- housekeepers, for a loan of 101. or 151. Tne interest
charged at the time of granting a loan of twelve months,
is:63. for 5/. ; 12 s. for 10/ ; and 183. for 151., with Is. 6d.
for form of appl,cation, costa of inquiry, boak of rules, and
all business ennected with the granting and re-payment
of a loan, and no further charge is made under any pre-
tence whatever. The trustees of this society being de-
termined to conform strictly to the provisions of the Act of
Parliament, and the intentions of the Legislature, in pas-
sing it, for the beater protection of borrowers from extor-
tion, think they will be doing a service to the publie, in
cautioning them against societieg, falsely called loan
societies, but which not being enrolled under the alley°
Act, arc, in fact, discount societies, under no law what-
ever I"

The officers of the loan eocietiee" cannot indorse their
bills granted for loam to third parties ; they must hold
them themselves, and receive payment from the borrowers
and their sureties. The Case is different with the discount
companies, who re-discount their bi:ls ; end, although they
profess in their printed rules to charge only 10 per cer.t.
for loans, yet they exact such terms as they can squeeze
out of their needy borrowers. If a person wishes to em-
ploy a loan society, he may at once know whether ha has
applied to an office enrolled wider the statute, because
their bills are exempt from stamp duty, while the discount
companies must use the proper stamp. Then the
latter are obliged to evade the usury laws, which declare
it to be illegal to charge more that, 5 per cent.
on sums of 101. and under. for this purpose
tt:ey refuse to ken iIVaIS for Lees than 10/. si. ; bet
if a person wishes to borrow 5/ only they pro.
fess to feed hi la 53 , and charge dieeeunt
on that Win", they ( the lenders) immediately receiving hack
5/. We have drawn out a rough cnmperative statement
of the terms on which a loan of 15/. would be advanced
by a loan society enrolled under the Act 61 Victoria, and
that on which it woeld be given by the discount companies.
The result is as fe:lets

15/. Loan--Under Loan S •eiety. regulAtd by the Acit
Victoria for twelve Inotrlig an weekly instolinent4 of (3J ;
Cha-nv for form £0 0 0
Book of Rules
Inquiry (without reg.ird to distance or nzimber

Of persons)
Bill stamp (free by the Act)
Discount. G per cent.
Secretary's fee

0 1 6
0 0 0
0 18 0
0 0 0

:CO 19 6
So that the borry.::r receives

Xl5 0 0
No fine; on defdult, nor charges for letters to the Sc..
Cret ary.
151. Loan—From a Discount Society for twelve months,
and weekly instalment of (ii.:--
Charge for form
Book of rules 0 1 0
Inquiry for two securities, at 13. 6i. per mica
(average three miles)
Bill stamp
Discount on bill at 10 per cent
Secretary's fee .

O 4 6
O 2 6
1 10 0
O 0 6

118 9
13 1 3