The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1897-04-20
MUNICIPAL PAWNSHOPS.
Movement in Aid OF san Francis
cos INDECENT.

Gently signed and transmitted 10 Gov
crror Budd an endorsement Of the
municipal pawnshop bill" The bin
contemplates The establishing OF
collateral loan bank at which the in
digent may obtain advances or prop
erty Of al kinds al q reasonable rate
Of interest. The bill provides that the
institution must be incorporated with
capital stock OF not less than 500
900. and in Sections and 4 says:
Every corporation applying for IL
cense under this act shall at the time
OF making the application file with the
secretary of the Board OF Bank Com
uissiOners a bond 70 the people of the
State, executed BY the corporation ap-
plying for the license. with good and
sufficient sureties. 10 be approved by
said Commissioners in the penal sum
Of $1,000. conditioned for the faithful
performance of the duties and Obliga-
tiOns pertaining to the business so Ii
censed. and for a faithful compliance
with the provisions Of this act Said
bond shall be renewed and relied an
nually. in January of each year, or the
corporation shall within thirty days
thereafter cease doing business and
proceed to close up its affairs.
Such corporation, when they have
disposable funds, shall loan on all
goods and chattels. or on all safe secu-
rites offered embraced within it's rules
and regulations, in the order in which
they are offered. with the exception
that they may always discriminate in
favor of small loans to the INDECENT.
Section s. relating to interest, reads:
Such corporations, when they have
charge interest at a rate exceeding
per cent a month: provided, however,
that all loans shall be subject 10 one
months interest, and no loan shall be
settled at a less charge than 10 cents.
The sale of pledged property is pro-
vided for in a manner which amply
protects the person to whom a loan
has been advanced. The sale is to be
at public auction, and if. after paying
the amount of the loan and interest
due. and > per cent on the amount of
the loan for expenses of sale, there re-
mains surplus, it shall be paid over
to the person who held the pledge.
Savings bank deposit books are not
to be sold at auction, but as much of
the deposit as will satisfy the claims
for principal and interest of the loan
may be converted by the directors.
The municipal pawnshop is to be UNI
der the control of the Bank Commits
sioners.
This movement to put the pawnshop
under municipal control, and establish
uniform legal rates of interest, goes one
step further than the incorporation of
pawnshops by benevolently disposed
private individuals or societies. The
latter plan has been carried out most
successfully in New York City. Rev.
David w. Greer of st. Bartholomew
Episcopal Church seriously agitated
the subject of the usurious rates of
interest charged the poor. Several of
the wealthy business men, members of
his congregation, became interested in
the question. While they were we'll
aware of the existence of pawnshops,
they were unfamiliar with the methods
employed.
The investigation which followed the
agitation of the subject revealed de-
plOrable system. 1t was found that the
ordinary rate of interest was 10 per
cent per month. and in some cases
even higher Once within the clutches
of the pawnbroker. there was appar-
emily no escape. On an average mot
more than 20 per cent of the value of
an article was ever advanced and
failure to pay interest for three months
rendered the owner liable to forfeiture.
even if many times the amount of the
original loan had been paid in interest
as was found to be very frequently the
case.
\ corporation was at once organized
by members of Mr.. GTeer's congrega-
ton. with a generous capital stock. An
J
to manage the institution and business
was commenced in one of the down
town districts. The rate of interest
charged was / per cent per month.
While the pawnshop was free to the
patronage of everyone. preference was
to be given to the deserving poor. The
first months of operation fully justified
the experiment. Through the careful
discrimination which was made the
associated charities were enabled 10
reach many poor families who had
been unwilling 70 apply for help. but |
who had been patrOnizing the high !
rate pawnshops In addition to help |
ing the poor the corporation was even |
able to declare a small dividend
The pawnshop * not peculiar 10 the |
Eastern cities. nor TO the present cen |
fury Many generations of the poor in |
many lands have groaned beneath the /
usury. vet seemingly unable to escape |
it In many States there is a statutory /
limit to rates of interest, and often = /
penalty attached to a violation. In |
some States il is considered a misde- |
meanor and is punishable as such 1t !
is q peculiar fact. however. that appeal /
: seldom made to the courts for pc !
lection This may be due 10 ignorance |
Of the law. bUt what is mOr1 likely 10 /
a lack of funds 10 institute the neces-
saTy legal proceedings.