Omaha daily bee., 1899-12-17

How borrowers Are BIed.
| Here is the plan on which these loans are
made and no particular skill in mathematics
| is required to see that the rate of interest
| is far in excess of the stipulated 10 per cent
monthly, which of itself is bad enough.
| Suppose the salaried man borrows $50;
| the loan is to run three months; he agrees
to pay 10 per cent per month on the whole
| sum- This amounts to &c. running the
principal and interest up to a total of S39
/ On the first pay day following the date OF
| the loan he must begin paying it back. In
| order to pay 1t within the three months
| that is, the prevailing period-he must
make his weekly installments $325. That
runs out even, and If he is lucky enough TO
meet every instalment he Is clear of the
| shark at the end of twelve weeks; but he
has paid SO for the use of a sum of money
that has been decreasing every week. For
| instance il he has not missed a payment,
at the end OF eight weeks he has cut the
| principal down to 81, for eight weeks at
| 1925 per week equals $26, and that sub
! tracted from $50 leaves 81, yet he lacks $19
of being square on the books and has four
more payments to make. Allowing that Sc
of the $26 paid during the eight weeks be
credited to the interest, that leaves a credit
on the principal OF 500, so that the last
| month of the three the borrower pays SO for
the use of $40, that being the amount of
the principal minus the $40 already paid.
Three dollars for the use of $40 one month
Is 33h per cent monthly, or exactly 400
per cent annually. Thus 1t is apparent at a
glance that the man who gets the loan pays
a fraction over 10 per cent per month from
the very beginung, and by the progressive
scale, so cunningly devised. the rate of in
uyIt nj
! at the last 1t reaches the enormity OF 331s
per cent monthly.
These figures are not guesswork, but are
based on actual facts obtained by inquiry
from the men who loan the money
The laws of Nebraska do not countenance
such usury, but laws are not always en-
forced, and the man who borrows money on
the plan herein outlined, must either pay
the amount demanded or not get the loan,
and after he has accepted the loan he must
keep his agreement or suffer exposure, for
the only way to beat the game is to invoke
the aid OF the law and that would neces-
sariy give publicity to condition upon
which any high minded man is more or less
sensitive. The result is that the eHgulfed
borrower pays the illegal interest
what the Law Says.
The laws OF Nebraska, compiled statutes,
chapter A, section l. reads as follows:
Any rate of interest which may be agreed
upon, not exceeding $40 per year on $780,
shall be valid upon any loan or forbearance
of money. goods or things in action; which
rate of interest so agreed upon may be
taken yearly or for any shorter period, or
In advance, If so expressly agreed.
Section OF the same chapter says: "If
a greater rate of interest than Is hereinbe-
fore allowed shall be contracted for or re-
ceived or reserved, the contract shall not
therefore be void; but If in any action on
such contract proof be made that illegal
interest has been directly or indirectly con-
tracted for or taken or reserved the plain
tin shall only recover the principal without
interest and the defendant shall recover
costs: and IL interest shall have been paid
thereon, judgment shall be for the princi-
pal deducting interest paid, provided the
acts and dealings of an agent I'm loanlng
money shall bind the principal and In all
cases where there Is Illegal interest by the
transaction of the agent the principal will
be held thereby as II he had done the same
agent for the borrower who obtains the
money from the lender he shall be deemed
to be the agent of the lender also
But the salarled man cannot afford the
publicity OF going into court TO establish his
rights In such transaction The Bee was
prompted to look into this money lending
evil by the receipt OF letter from a wen
known workingman, whose name is with
held. In substance his letter reads:
There are many people agitated about