Evening star. [volume] (Washington, D.C.) 1854-1972, 1898-03-03
Money Adv nc ID at High Rate Of
Interest.
CERTIFICATES HELD As COLLATERAL
Discoveries Made by Special Ex-
aminer Connolly.
ATTORNEYS IMPLICATED

Special Examiner Jere Connolly of the PEN
sion Office has brought to light the opera
tons of local money lenders who have
made it business to advance small sums
from time to time to pensioners at enor-
nous rates of interest and hold their pen
sion certificates as collateral security. Not
only do they violate the law against usury,
but they also violate United States stat
ute. which prohibits, under a penalty Of
500 for each offense, the holding of a pen
sion certificate as collateral
Examiner Connolly has laid bare facts
enough, he says, to warrant the conviction
of several persons.
A short time ago the officials of the pen
sion agency IN this city turned over to the
special examination division a couple of
pension vouchers signed in blark. The law
prohibits the execution of a voucher until
after the 4th of the month upon which the
quarterly payment falls due. These GER
tlhcates at once gave rise to the suspicion
that there was something wrong in the
manner of executing certificates, and Spe-
clai Examiner Jere Connolly was detaile 1
to work up the case. He soon became sat
lshed that the suspicious vouchers came
from some place where vouchers were exc
cuted with a view of protecting some per-
sen against the possible death of the r,.-
sioner. He was satisfied, after 2 ~,.,,ar
based upon the cortfr.>.-.o,, nf w.
While pursuing hiss-s..,vestiestion he vas
eslea TO anotrr.- city TO inyestirate SINH
facts III while there ran across some
"hich led him to believe that pen
sioEers in this city had hypothetical their
certificates.
Practice of Two Local Attorneys.
Securing the assistance of two clerks, he
proceeded to the offices Of two attorneys
in this city who had made a practice of
lending money, and after declaring his off,
cial position asked for a certain certif-
cate which he knew the attorney had in
his possession. He did not mince his
words and made it plain that he was in
and he wanted 1t.
After faint protest the attorney handed
out the certificate, and the examiner no.
ticed that he had others along with It. He
asked the attorney If he cared to make
any statement as to how he came to have
that certificate in his possession.
The attorney had nothing to say. Then
Examiner Connolly asked that all certifi-
Gates In his possession be turned over i'm
mediately to him. He said that he had a
record of every one and it would save q
good deal of time If the certificates were
handed over Immediately.
Ihe attorney was very much frightened
for he handed over forty certificates with
out comment. The examiner put them in
his pocket and asked him once more If he
had any statement he cared to make He
replied that he had not Each certificate
as in wrapper, upon the back of which
as indicated the amount of money loaned
ana the Interest charged. 1t ranged from
20 to 30 Fer cent a month. One of the GER
tif1cates furnished the examiner with a clue
which he Immediately followed out
Another attorney was visited and the
examiner questioned him closely Here he
demanded a certain certificate and the at
toiney proceeded to hunt it up. He found
1t and turned it over and the examiner
very earnestly told him he had better turn
over all the others he had. The attorney
eed. and out Of a big packet of notes
he drew thirty-five pension certificates and
surrendered them to the examiner.
An opp ortunity was given the attorney to
make any statement he cared to regarding
the certificates, but beyond acknowledging
that he had advanced money upon them as
matter of charity he had nothing else 10
say. The examiner suggested that it was
peculiar kind of charity that forced a
poor pensioner to pay 90 per cent month
for 2 loan.
The operations of these firms were far
reaching, and they made quite a snug lit
tie sum out of the old soldiers. The bus
mess had been worked up with great re-
gard to details and at least four runners
were caught giving the pensioners valuable
advice as to where they could get some
money.
The confiscatton Of the pension certificates
brought the pensioners represented by them
to the pension Office. Pension Cay is only
one day OF, and they We're anxiOhs for
their regular quarterly stipend AS soon J
they arrived they were ushered into the
room of Special Examiner Connolly where
ne conducted an exhaustive examination of
each one and took their deDositions as to
now ara under what circumstances it hap
pened that they did not nave their pension
certificates with them. This examina ton
brought out all the facts in connection with
l lne mater under investigation, and the
dispositions will be used in the prosecution
of the attorneys.
Examiner Connolly, when asked by a Star
reporter concerning the results of his in
vestigation, said
Examiner COnnolly's Statement.
ION Thursday last 1 visited two offices
in this city and secured in one forty GER
t11cates and vouchers, which were held
under the pretext of safe keeping, but in
reality as security for loans, upon which
the pensioners were paying interest at the
rate or 90 per cent for forty-five days, or
% per cent per month or Fraction thereof.
IN the other once secured thirty-flve GER
tihcates and vouchers held under like con-
ditlons To secure proof Of the hypotheca-
ton OF certificates and irregular execution
OF vouchers has always been a most difii
cult problem but in this instance that has
peen carefully looked to. The chief of the
Jaw DIVISION, VINO accompanied me In, the
raid, and an assistant OF his, are now look
ing into the sufficiency Of proof and both
agree that this case is as clear as CRYSTAL {"
Has the business been carried on to a
great extent in this city," Examiner Con-
molly was asked.
1T has been confined largely to these two
offices. Some saloon keepers and a few
boarding house keepers have been engaged
in the business on a small scale, and we will
attend to them later
How about the execution of vouchers?"
we have proof that many of the Iouch-
crs for the payment of December pensions
were signed In October and November by
the pensioners, and this fact leads 10 the
conclusion that If the pensioner had died or
failed to turn up the notary by ATTACHING
his seal could have gotten along without
his presence on December 4, the earliest
cay upon which he could lawfully sign and
swear to his voucher We have as vet dis
covered no case where this was done. bu,
We have not concluded the Investigation
and such development is among the pos
sibilities."
The Law I'm the Case.
The law relating to this matter is dated
February. 1883, and is as follows:
Any pledge, mortgage, sale, assignment
or transfer of any right, claim or interest
In any pension which has been or NAV