The Washington times., 1895-06-25

There is a splendid prospect that the
committee appointed to look into the mat
ter of the-feasibnity Of loan associa-
ton TO take honest people Of Washing
ton out of the hands of dishonest money
! lenders VIII report in a much shorter time
than was anticipated
This committee, of which DR. Gregory.
president of the Civic Center, is chairman.
/ appointed two subcommittee 10 expe-
! dito the preliminary work Mr. + l. Sid
/ dons, OF Ralston & SiddonS, was 10 nvcsti-
gate what was the legal status Of the
| proposed association, and Mr.. August
I Donath, the real estate broker On Seventh
street, was requested to inquire .lto the
management of associations of the kind
which have been demonstrated successes.
Mr.. SiddOns said yesterday mat he
would be able TO report when the meet
ing was called, and Mr.. Donath as al
ready his part of the report well Under
way.
In talk with Mr.. Donath yesterday he
expressed his conviction that the scheme
! was entirely feasible and that 1t would be
great success. He is informed that men
OF means are prepared To 20 no ;oe nm
dertakins under proper management, and
Nc does not think that proper manage
ment is difficult thing 10 obtain in
Washington.
HOW 1T WORKS~iN BOSTON
de mas had under consideration the WAYS
aud means Of the workingrnens Loan As
sociation, of Boston, and from study OF
this he made some interesting statements
and suggestions. Speaking of this in
advance of his report, as it VIII interest
all concerned. lie SAID:
The Workingmeu'S Loan Association.
OF Boston, began business in April 1883
with capital stock OF S66 600. This
mas been increased 10 $50. 400, and in ad-
dl1on IT uses in its business about S25.-
900 borrowed money, on which the com
pany, which has solid financial status,
pays from 10 per cent interest per
annum The cost TO boTro wers is per
cent. a month, in addition To a small
charge Tor appraisal and recording, and a
nominal charge in lieu Of insurance
The company conducts its operations
through salaried officers, pays per cent
dividends each year, aud so far has met
its losses from bad debts out of its sur
plus earnings. 1t has found by experience
that the best class Of property on which
TO make Ioaus is household furniture The
security OF its loans depends on careful
appralsement and due inquiry into the
OF this some what peculiar business seems
TO be much less than many would suppose
And we must bear in mind that the Boston
corporation has now had an experience
OF over six years, extending through good
and bad times.
ONE PERSON RESPONSIBLE.
Everything, apparently, depends upon
close adherence to business principles, and
by giving the management Of the business
into the hands OF one person, who employs
his staff and is himself held solely re-
sponsible. Besides furnishing money to
borrowers at the rate OF one per cent. per
month, the Boston company claims-and
no doubt justly-to have compelled the
persons heretofore supplying needy bor-
rowers TO make material reductions in
their charges
1t is not TO be supposed that in q city
like Washington a capital stock of more
than $4,000 or $50 900 can be raised
for the purpose we have in view. believe
it would be worth while to make the ex-
pertinent With even so small CAPITAL as
SO 600. But l earnestly advise that the
person in charge of the active operations
in the beginning, AT least-be not salaried,
out look TO the appraiscment fee, and a
possible small charge for rene walls for
his compensation The Boston company
paid the manager, two or three appraisers,
and one or two clerks, all of which NAV
be all right when conducting large oper-
ations, but sure death to an infant enter
prise like ours
The Boston association is differed by q
president, vice president, treasurer clerk,
and wealth of fourteen directors, besides
the office personnel already referred to.
1t is legally chartered and pays q consid-
erable tax on its businessmen less than
81, 200 IL in the last twelve months
PRACTICAL SUGGESTIONS.
Other practical business suggestions
which have been made as to the coming
association, are:
Don't call it the Poor Peoples Loan AS
sociation. People don't like to advertise
theirpoyerty.
Don't pay salaries to manager an clerks.
The rate of interestlto be charged will
depend largely on the volume of business.
The expenses that must be met out of the
interest charged will be: First, rent; second,
and third, light, heat, and
stationery.
IF the capital employed is but So 900.
the stockholders receiving 6 per cent on
their investment, money cannot be loaned at
10 per cent. per annum, as suggested, as the
surplus profit, even if every dollar were en-
ployed without intermission, would be but
$500 per annum, not enough to meet legiti-
mate expenses. Ii the capital We're made
@So,oUo, thlnk the money could be loaned |
at 10 per cent. per annum, provided it was
not found necessary to employ watchmen
to patrol regular beats.
The manager should receive his compen-
sation by charging small fee for appraise- |
ment of security. He should be expected |
to furnish the clerical force found necessary
in the transaction of business. He should |
be permitted to charge this fee but once-not |
on renewals of the same loan.
BY making the capital sfaall, say So 900, |
thesphere of foperationmustbe be circumscribed |
to the accommodation of persons very much |
in need and the interest charged for such |
accommodation must be dearer BY pro-
viding larger capital a greater number
Of borrowers can be accommodated, and |
the cost can be reduced"