St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1888-02-23
A POOR MANS BANK.

III AlSiiC1 SUCIClN iilCd VI Sldl Illl9 d
poor mans bank is one that merits care
full consideration. The plan as outlined
by Mr.. MOVES is to establish a bank for
the sole purpose of making small loans
TO poor people at reasonable rates. The
apparent necessity for such an inStitu
ton is that the working people, as Il
rule, have no credit in regular banking
institutions and cannot secure accom-
mediation unless it is through the intlu-
ence of some one III high business
standing. The result is they are forced
to borrow, when in need, from the street
brokers, who make 4 business of loan
ing small sums on chattel mortgages
and charging in the way of
fees and commissions at the rate of 70
per cent per annum, and some of them
as much as double that amount. The
public have very little idea of what an
immense business these street brokers
do i'll this way, or of what an immense
sum of money is annually eXtorted from
the working people of the city. 1t
makes no difference how industrious or
economical the laboring man may be he
will find himself now and then behind
in his accounts. He is wholly depend
ent on his daily wages for the support
of himself and his family. AS long as
he keeps his health and everything
prospers. his wages are sufficient
but now and then will come
a black day when the wolf enters his
humble home. He loses his job or sick
ness invades the family. Doctor bills
accumulate, and it may be there is a
funeral, and the burying of his dead out
of sight incurS heavy expense. The
rent goes on just the same: there must
be coal in the bin to keep his wife and
children from freezing, and meal in the
tub to keep them from starving. He
has no credit. and yet he can't get along
without money. He sees a time ahead
of him when there is a prospect of
catching up on his accounts, and if he
can only manage to bridge over the III
teryening time he is willing to make a
sacrifice. Then 1t is the loan and
trust man comes along and proposes to
loan him money on his household goods
at the rate of five or ten per cent
month. The poor man tells him that
such rate of interest is unlawful, but
the loan and trust man says he can fix
that all right. He only proposes to name
ten per cent in the mortgage note, but
will charge him 81 or SO on every 500
loaned as commission for loaning him
the money and fee for fixing up the
mortgage papers. Thus the law is
evaded and the eXtortionate rate of in
terest is eXacted. The poor man has no
alternative. He must have little
money to pay the months rent
or be turned out of doors.
He must have some money or
suffer his family to freeze and
starve.n SO the bargain is made,
and the loan and trust man takes the
mortgage on his household goods and
lets him have money amounting to one
third of the value of the furniture, and
gets interest on the loan at the rate of
20 to 40 per cent per annum. Such, in
brief, is the only resource the poorer
classes of our people have for getting
money on credit. Under these circum-
stances it does seem a most charitable
proposition on the part of the Relief
society to endeayOr to establish bank
ing institution for the benefit of
these poor people. 1t is proposed,
as we understand, to manage the
institution according to purely business
methods. Every dollar that is loaned
will be properly secured, but it will be
loaned at rate of interest within the
limitations of the law. Then the hold
n
dividend OH their investment, and at
the same time means of rescue FROM
the grasping paw of the curbstone
broker will be afforded to the honest
working people of the city.