The Montgomery advertiser., 1901-08-20

Sntcte0 iut0 au &B.ScAzsSnt " tAke the nickel and buy . cigar. The little fel- low who didn't have any nickel took the cigar, struck match and lit 1t, and he says, Now, We nave formed . corporation; ], will be the president of the corporation and you win be the stockhoider; will do the smoking and you can do the spitting.' That is the very same way that these borrowers have had to do in these corporations. They will come to you and tell you that you will be a member of the cor poration; they will give you a certifi- cate of stock: they will require you to take out uouuie tne amount of snares that You nave borrowed. and l have just made a little calculatlon here, sho wing how much a man has b pay on 1t. I deny that the borrower Is a stockholder after he gets. hisn money. Under the terms of the contract, they require you to assign your certificate of stock to the company before you get the money, and you are no longer. as laid down in the case of Falls in 75 Alabama-- M,. rrsham (Montgomery)-I desire to ask the gentleman a question.
 MT. frotto,--i prefer not to be in- terrupted; my time Is limited. will answer the gentleman when I get through. lou take loan of $10.000 in a corporation that Issues shares of $l00. They require you in the outset stock, double the amount that you bor- rowed. They require you to pay back in monthly installnents sixty cents per share; that is, $120 per month; they re- Quire you to pay the interest on that $l0, 900, which would amount to so per month at the rate Of 6 per cent-tn amounts to $1T0 per month on the &C., 900 loan: they require you to pay three months in aavance before they will yet you have the money. In other wo, GE, ycu get fraction over $3.olo instead o: the $l6,000. Then, how 10 they appiy that? When you borrow, they tell yea that a part of this is premium. and a part of 1t is your stock. and that sIur premium will be bearing interest and you will get the be 1cit of 1t. but have never yet been able to find a man to get that benefit out of one of them; never get his home except he had paid twice the amount he borrowed. They will give you credit for S6o on the premium. credit for $50 on the '"an credit for $50 interest-but your mo. tgage never sees but seo out of that $i70, and at the ex- piration, of the eighty-four months. you will have paid into the association $1A4So, and then when you go to sett!e they will tell you that you still owe them $4,s60.
 Now, I have here some letters from men who have been in these concerns, and they bear out this proposition. Here are two men, each borrowed one thousand dollars; they paid seventy two monthly payments at $15.% each. and then had to compromise at the ex- piration of the seventy-two months by paying four hundred and etghty-four dollars in addition. Here is another man who borrowed fifteen hundred dol- lars and paid back twenty-five dollars and fiften cents per month for seventy. two months. and now they claim that he owes them nine hundred and two dollars in addition before they will release his mortgage. Here Is another man who lives here in Montgomery, whom many of you know, l do not care to mention names. but I will furnish his name to any delegate privately, that borrowed thirty-four hundred dol- lars, and in order to get out he had to pay seven thousand four hundred and seventy dollars. daughter.) The bor- rower. MT. President. has absolutely nothing to do with the expenses or the concern. he has nothing to do with the profits of the concern. but if they see proper they can tax him with the losses of the concern as long as he stays in there or until he compromises. Now, who gets the benefit? There Is noth- ing in their contract, and I cite you 10 the Falls case, which l think Is mighty sound, even though overruied, l think 1t Is mighty good reading in this case. The Secretary and Treasurer and the attorney and the directors after they put them in there. and start up with the business. if the business is good then the salaries are increased and the
 
 matter whether the business is profit able or the reverse. the borrower has to pay just the same. Then. what do they tell you about the investment? They say to you, if you have got two thousand dollars. or ten thousand col- lars, and you want to put 1t In there, they will frankly admit to you that they make from 14 per cent to A per cent per annum-they admit that to the men they want to go in as invest ors. but the man to whom they want to loan money they tell him they will lend the money to him at per cent. was very much struck with remark that a gentleman on this floor made while this was under discussion. They went, 1t seems. Into his oftice and got after him to take some stock. knowing that he was a man of some Tt.t ans and had idle money and it was his r'oney they were after. They outlined their beautiful plan and told him they want ed him in there. He said: II see here you are charging about A per cent in- terest," and the agent sided up close to him. and thinking to catch him. said: That Is right but you get the benefit of 1t. the investor Is the man that gets the benefit of this.' The gentleman replied: My friend, when I decide to act the rascal. I went the money to come through my own hands. and not. through yours" Now. they claim further. MT. President, that un- der the statute as 1t now exists. that you cannot charge more than l2 pef cent interest. and l desire to say that I do not think that is a correct prop osition.
 If you turn to Code Section 1133 in reference to Building and Loan Asso- cjations. 1t says: Such Associations may. by their bylaws. impose fines and penalties upon their members Tor default or delay in payment, when same are due. of installments upon their loans, the interest. premium and charges thereon, and Lpon the shares of stock of such members, and the same may be secured and collected by mortgage. in addition to the amount of interest. premium and other charges allowed by law, but such ftnes shall not exceed 2 per cent per month or such arrearages."
 Now. in this. case of the ten thou sand dollar loan. how much would that
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