Evening star., 1896-06-27

|SI- in Dutch
- S IF you have neither
< money goods
go past this door,
If you have the latter and need the former
walk in,
Give security. and 1 will give you money"
1t was the reading of this curious verse
that suggested the investigation whose re-
suits are here given:
In a country where there Is 80 much
wealth there is in the United Neither
lands interest is low. and everything that
has market value is accepted as Sc
curity. This ease with which money can
be obtained works injury 20 the less
prosperous. since they see a possible re-
lief from any emergency in a temporary
loan. and the demand for such loans in
creaSes the number of persons ready to
ms ke them Then this facility of mi king
loans eniarSes in time the catalogue of
available collaterals. and the impoverish-
ing process gees on.
About the middle of this century the
lawmakers of Holland-by which is meant
the NetnerlandS-realiZed that the poorer
classes We're becoming more and more de-
peiitient upon the money lenders and with
this growing dependence the conditions of
borrowing became more and more ruinouS
The rate of interest increased to CD per
cent and even higher; the slightest delay
IN redemption brought about the confisca-
tlon OF the articles of value the levying
- charges for storage on these of less
%oria; and the amounts realized from the
:, -le OF Unredeemel pledges went to the
ohf ana loss account of the broker. the
Sf4%lnai owner never receiving any re-
tlrhS from a sale which exceeded his in
deltedncss.
To abolish pawning without providing
any substitute therefor would have result
ca IN great hardships to many .yho needed
temporary assistance. and the demand for
small loans Uotld have kept in existence a
cL'ndestire brokerage business which, be-
case of its secret character would have
been beyond police supervision and hence
frat2it with danger. The result of this
realization by the government brought
ahout me abolition of private pawnbroking
ana TIE substitution of stale 5anks for it,
Banks of Local Origin.
While the loaning banks here described
were created BY legislative enactment. they
are not directly under state control The
law merely declared tnat the conduct of
private concerns would be regarded as a
'n.sdeneanor, and outlined the plan on
winch town or provincial establishments
sAOCli De administered. but it left the or
sahzaion and maintenance of such in
stit;itions 10 the towns and cities
ne eX.;ercics of life. the very uncer-
,t.Ates "t ownership Of property in Hol-
iahd are so great because of the damages
WHICH an overflow at any moment naieht
cause, that the people are very synDatteti.
anu ever ready fer charitable acts So that
Nheil Inc states declared that cities must
meet tAe wants of their needy borrowers,
all were willing to adopt the plan proposed,
anu the absence of a 'Stad Bank van
I-eehlni; in any city would show that the
people IN authority there were deaf to the
cSiiIS OF those in want-au accusation which
no Dutch councilman would endure
y CITY therefore sets aside a sum of
money, usually in proportion 10 it's D,pu
a ard of
to equip loaning bank, and selects n seq
fetaly to place in charge. Exparjapce
soon shows how much must be charged for
making each loan. and what the rate of in
trieSt ought to De. No attempt is made IN
earn for the city any returns on its invest
rent The banks capital is set aside for
the nenefit of the poor. and the interest lost
Is charged to the city's contribution to
charity Stil. wisely administered eau
t:oGS bank in large city could do business
OF a smaller margin than even an equally
Well-Inanaged bank in smaller or less
prosperous place; but il is apparent that a
low rate of interest in a city belonging to
e the former class would tend to force down
the rate in all others near by perhaps in
some cases below the safety line
Rate of Interest.
This tendency is kept in mind and danger
averted by the retention of a somewhat
uniform rate. This rate depends upon the
size of the loan and the character of the
II
Amsterdam. for instance, on amounts he-
tween 16 cents and s1.2O the rate is 8 Der
cent. and the duration of the loan cannot
exceed SIX months; sums between 81 20
and 81 the rate is 10 per cent and the rime
limited to fifteen months On all othar
Soods the rate IS Is per cent. The reason
for placing a lower rate on household goods
Is that they are the articles which are the
most likely to be redeemed. and hence the
risk to the bank is less on them
Although this rate is small when COM
pared with the usurious rates formerly
charged by the private brokers' still the
bank at Amsterdam last year turned over
TO the city dividend equivalent to 3.,TI
per cent on its Investment of $3.50 900 This
rate. somewhat above the average. is about
equal to the income from the best invest
mentS in Holland.
The only restriction besides the rate Of
interest and the time limit is the character
OF goods which are accepted pawns. 1t
ircludes everything except real estate live
stock immovable property of all kinds,
property of any church religious order
military uniforms. accouterments or wea-
pens, furS, mechanics tools or any irnpla-
ments by which livelihood may be gain
ed and bonds. notes or securities.
How a Loan Is Secured
person desiring a loan must bring to
the bank the article which he proposes to
offer as security. In the larger banks diff
ferent parts of the building are set aside
for articles embraced under the various
categories, and the business hours are az
Ranged so that all classes and professions