The western sentinel. [volume] (Winston-Salem, N.C.) 1887-1926, 1890-12-18
THE PROJECTED LOAN scAeMe.

The PROTECTED LOAN SCH6M6.
Tcu Can Get . Cash Advance Right on
If You Comply with Preliminaries.
One of the greatest problems that
has for years confronted people who
chance to have spare cash and will
ingness Ito oblige a friend with a
loan" is to accommodate the worthy
borrower, and, on the other hand, get
rid of the nuisance who never repays
anything What promises to be a
widely popular and successful mode of
accomplishing both these desirable re-
suits is the project recently invented
by two bright young newspaper writers
of this town, and called the protected
loan plan.
1t is cooperative scheme somewhat
similar in its workings to the system
upon which building and loan associa-
tons are conducted, and its benefits
are greatest to clerks and others of
somewhat limited income who may
enter into the plan. Any number of
persons from a dozen upward can or
sociations. The two original associa-
tons were established by twelve men
signing an agreement to pay to treas
urer, who was one of the twelve, 81
weekly for a period of six months, the
understanding being that the money
should be used at the end of that time
to help defray the expenses of a vaca-
ton jaunt in August.
Each member agreed to pay five
cents a week premium upon every dol
lar advanced when he found it neces-
sary to borrow. For this he gave his
personal note to the treasurer, agreeing
that the loan should not run longer
than six weeks. The rules of the asso-
citation were drafted to give any men,
Der the right to borrow twice the
amount of money invested, and to draw
out at the end of five weeks if he chose.
The premium paid for the loan was
used as interest, and at the end of six
months the aggregate of premium
money was to be divided equally among
all the investors. It was estimated
that at the end of six months each man
would draw out $50 in cash, or $40 re-
turn on his total investment.
The plan was a success from the start
and the membership steadily increased.
Men in the association were spared ap-
plications for loans when it might be
inconvenient to advance them and dis
tasteful to decline by being able to re-
fer the applicant to the treasurer of the
association. 1t was esteemed q valua-
BILE privilege. Half of the money col
lected for dues was regularly deposited
in the bank at the end of each week,
and is now drawing per cent inter
est.
The great value of the scheme over
and above everything else, however.
was the manner in which the treasurer
was able effectually to get rid Of a
chronic borrower, who sought to avail
himself of the privileges of che associ-
alton. One of the rules stipulated that
not more than one loan could be made
to an applicant at any one time, and
that in order to be accommodated
again the first loan must be paid, to-
gether with whatever interest might be
due on it. This knocked the borrower
out, for he clicked" right at the start
against the shylockism of paying inter
est on gentlemanly loan, and the
treasurer declined to have anything to
do with him. Neither would any of
the other members when they heard of
the incident.
"This interest, as you call It," ex-
claimed the treasurer, lis shared among
all of us and goes toward vacation
money. The man who would object
to paying it can't be much good"
Another rule of the new association
requires the payment of five cent fine
for each failure to pay dues promptly
at the end of the week.
The scheme can be made more prof
table still to investors in the protected
loan association if the means of the
members enable them to put in S.
weekly instead of 81. The association
is, of course, protected against loss by
the privilege of suing on the personal
note of any borrower. But it is claim
ed by enthusiasts on the subject that
nobody ever succeeds in imposing upon
the treasury. The right to reject ap
plications of rather shady reputation
in the matter of repaying loans is an
effectual barrier, they say, against such
borrowers. York Sun.