Evening star., 1900-10-05
LENDING TO THE POOR
WHAT HAS BEEN DONE IN THE WAY
OF MUNICIPAL PAwNsHOPs.
A Matter Worthy of Serious COnsid-
eratfon-COnsidered as a Form
of PhilanthrOphy.

The English government Is considering
the adoption Of system Of municipal pawn
shops, and the question should be agitated
In this country The states in which most
attention has been given to the subject are
New York and Massachusetts,. In the
former the legal rate of pawnbrokers' In
terest on loans less than 800 is 8 per cent
for the first six months and per cent per
month thereafter; in other words, so per
cent per annum. Upon household effects
and clothing the American pawnbroker
lends very Httle-partly on account of stor-
age; but upon diamonds competition forces
the pawnbroker to advance a large proper
ton Of the price that the dealer would pay
for them.
1t Is the opinion of many that institutions
that lend small sums on pledges or chattel
mortgages on furniture or personal effects
are even more useful to the people gener-
ally than the banker The small borrowers
outnumber the large ones ten to one. There
are discouragements; one meets with some
dishonest people: but it is the observation
Of clergymen. missionaries, officers OF the
Salvation Army and others in like positions
that the poor are Just as anxious to pay
their debts as the more prosperous.
AS early a. 1859 there was incorporated
in Boston a Pawners' Bank. The aim Of
this institution was to enable the poor to
DOrrOW money IN Smau sums on pSrSONaI
effects. After various vicissitudes this be-
came the Collateral Loan Company. Most
Of their loans are for s. each. This company
is trying to reach the ideal of the Pawners'
money on personal property of all kinds on
reasonable terms. The loans are for four
months at one-half per cent per month.
The Workingmen's Association received
its charter from the commonwealth Of Mas
sachusetts on March 8. 1888. This organ
ization was also formed for the purpose Of
enabling persons to borrow money on fur
niture and other personal property at low
rates 1t was designed that they should
transact business, conducted economically,
at the very lowest rate that would yield
fair return upon the capital invested. One
per cent month was fixed as the interest
rate, and with each payment of interest the
payment OF an instal1ment Of the principal
equal to per cent Of the loan was de-
nsanded. thus encouraging borrowers to
save and pay off the loan. Loans have been
repaid very fast. averaging from half a
year to year in duration. When illness
misfortune comes the company relaxes its
stances shall improve. Besides the interest
at 1 per cent a month an additional charge
is made sufficient to cover all expenses in
investigating and recording mortgage.
Loans are made on furniture and house
hold effects, insurance policies, indorsed
notes, etc, but seldom on jewelry. Each ap-
plicant is questioned with great care and
fills out blank application, giving present
references and deposits So cents. The COM
pany has. of course. met with some losses.
Loans on horses, boats, pictures and drug
gists' sundries have proved unfortunate;
but as rule furniture has been redeemed
AS the loan, being only one-fourth of the
purchase price. is small in comparison with
the value of the furniture, there Is a strong
inclination to pay.
association in New York, and out of this
the Provident Loan Society was organized
to give aid, on strictly business basis, by
the loan Of money at per cent per month.
pawnbrokers. As rule money Is loaned on
jewelry and other articles representing
large value in small bulk. Reports Of this
association state that those who obtain
loans are rarely found on the records Of
charitable institutions. but are self-supports
ing persons who desire to tide over periods
of misfortune or Illness The work is pre-
ventive rather than charitable. Less than
2 Ia per cent of the loans made in 1896 re-
manned unpaid at the close Of the year.
This society started with capital Of
$4,000.
Recently a number of charitable women
in Chicago organized a loan association on
small scale. The capital Is furnished by
contributors. who give from ten to five dol
lars annually. Loans are made In a business
like manner, the borrower giving his note,
countersigned by a responsible guarantor;
but the note does not bear interest. Owing
to the associations small capital loans are
limited to $40 and are payable in weekly
installments In the event Of illness or other
sufficient cause, extensions are granted. A
member of the society, summarizing results
to date. finds that there are clearly de-
fined sets Of conditions where loans may
be successfully substituted for aims. The
first is IN dealing with an element Of the
respectable poor, applying for relief for
the first time; then there is second class,
whose only Idea is Of giving and taking;
to such a class loan Is welcomed with
surprise and gratitude; a third class in
cludes the degenerate poor, who expect aims
as their right. Such people the association
have reached pauperism by the aims that
have been given them.