Evening star. [volume] (Washington, D.C.) 1854-1972, 1888-12-18

CLAIM THAT THERE rs NO WARRANT FOR THYrB
CHARGING MORE THAN THE LEGAL RATE OF ~
TEREsr-THE BILL NOW PENDING BEFORE CON-
GREss.
The bill introduced by Mr.. Smith, Of wiscon-
sin, to regulate and license pawnbrokers in
the District Of Columbia" and now pending
before the House District committee, forbids
any pawnbroker receiving greater rate Of in
terest than "A pereentum per annum upon
loans not exceeding s25, or more than II per
cent upon loans exceeding eos in amount, un-
der penalty of 600 for every such
offense. Representatives of the pawnbrokers
have been before the District committee
to oppose this measure. Now the
rates charged by pawnbrokers vary
from or to per cent per month, according
to the amounts loaned. A question has been
raised whether there is any law here fixing the
rate OF interest that can be legally charged by
a pawnbroker. A suit is now pending before
Judge Hagner in the Circuit Court which will
lead to settlement of this question. II the
plaintiff wins the suit the result of the deci-
sion will be to reduce the limit far below that
liked by the pending bill.
In the suit in question the plaintiff borrowed
$3.50, and at the end Of three years. the plaintiff
alleges, the interest charges amounted to S510.
The last instalment of interest and the prin-
cipal were paid, as is alleged, in the suit under
protest. Then the plaintiff began suit to re-
cover S275, all the interest paid within o year
Of the date Of the action.
MIR. J. H. Ralston, who is attorney for the
plaintiff, claims that the only act in force in
the District bearing on the rate Of interest to
be charged by pawnbrokers is the act Of
April ~, 1870, to amend the usury laws of the
District of Columbia.
''1n this act" Mr. Ralston said to STAR re-
porter. lit was provided that the rate Of inter
est in the District should be six per cent per
annum unless there was a written contract, in
which case the limit fixed was ten per cent per
annum. It provided also that if any greater
interest should be paid it could be recovered
by suit brought for the purpose within one
year after such payment was made. Under
the terms of the law, if greater interest than
the amount fixed by law were paid, not only
the excess above the legal rate, but the entire
amount paid in interest could be recovered No
exception is made by the act as to pawn
brokers'"
An act Of the legislature Of the District ap-
proved June 26, 1873, provided ''that upon all
articles .pawned, pledged or deposited as
collateral a pawnbroker may advance such
sum as may be agreed with his customer, and
shall charge no more than at the rate of per
cent per month"
Mr.. Ralston when asked by STAR reporter
about this law. argued that it was
not in force SO far as the clause relating
to interest was concerned, and never was a
valid law. 1T is tolerably we'll settled" he
said, chat the powers Of the Legislature Of the
District were only those of municipal
corporation, and as municipal corporation
it had no right to legislate upon such
a subject as the rate Of interest
to be charged by the pawnbrokers unless the
right was expressly delegated to it. No such
right was delegated. But aside from that, by
the act approved June %. 1874, being the Re-
vised Statutes relating to the District of CO.
lumbia, Congress re-enacted substantially the
act of April o. 1870, relative to the rate Of in
terest to be charged in the District of Colum-
bia, and again made no exception whatever as
to pawnbrokers."
The only act since then relating to pawn
brokers is the one empowering the District
Commissioners to make police regulations, in
Guiding regulations concerning pawnbrokers,
but which, it is claimed, has no reference to
rates of interest to be charged.