The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1902-02-23
HELP FOR THE NEEDY.
CHICAGo's MUNICIPAL PAWN SHOP
is PROVING A GREAT
SUCCESS
"A POINTER FOR MINNESOTA
Rates to Borrowers Ear Below Those
Charged by the ShyIOcl1s,
Yet 1t Is Paying a
Profit.


Special to The Globe.
CHICAGO. Feb. 22-Slnce the days of
Portia no harder blow has been dealt to
Shylock or his usurious nameSakes than
was given in the organization of the
State Pawners' Society of Chicago.
This institution has the unique distinc-
- ton of conducting a work Of philan-
thropy that yields profit. 1t has accom-
pushed far-reaching good, helped thou
sands that needed help done much to cor
rect grave evil in tie municipal system
and, after summing up its benefcent OPP
:. eratlons for the year, has paid dividend.
me enterprise was undertaken by a
number of public-spirited men of means,
whose primary object was to relieve
needy borrowers from the hardships often
suffered as the result of transactions
with Knights of the Three Balls, whose
establishments are thickly scattered
along both sides of Clark street. in the
heart of the city, for distance of nearly
mile. The plan, as conceived and car
ried out, was to lend money at a mod
crate rate of interest on personal prop
erty, to allow more liberal terms for re-
demption than could be secured from reg
olar pawnbrokers, doing away with the
eonfiscation often practiced by the money
lenders and to place the business on
such a basis as to give applicants for
loans the highest assurance of far deal
ing
10 aid in the latter purpose it was
sought to make the state party to the
enterprise, and this end was attained
through the passage by the legislature of
law authorizing the Incorporation of
the Pawners' society, prescribing condi-
Oon on which it should be allowed to con-
quot Its business and providing safe
guards for its patrons by making it a
seml-public institution
ne last named provision is the most
interesting feature of the law. as it
Is the one most likely to recommend the
venture to legislators of other states
ana TO lead to similar steps to secure
10 other large cities the benefits of such
an institution. 1t is that the governor
OF the state and the mayor of the city
In which the corporation does business
Siidu each appoint one director, who shall
not be stockhoIder or an empIove Of
the corporation, who shall have the same
power and authority as the other direct
oFs OF the corporation. To insure to the
pupllc the benefit of state supervision
OF the affairs of the society, it is re-
CURED that the president and directors
shall annually file with e auditor of
PUBIC accounts of lie state a full re-
pert of the business of the year. giving
under oath the name of and the number
OF shares of stock he'd by each stock
holder The auditor, moreover, is given
al powers of examination and suner
vision OF the affairs of the society that
he has under the act regulating trust
companies, over enterprises of that cnar-
aoter.
> Under the terms Of this law the So
cIety is allowed to charge not to exceed
Fer cent month to any borrower as
compensation for the money advanced.
and not to exceed one-half of / per cent
month additional for storage and in
suTahce. This makes the cost of a loan
~ per cent month, as compared with
~ or ~ per cent usually paid the pawn
brokers' and insures uniformity in the
rate instead of leaving it as heretofore,
a matter of bargaining to be determined
according to the avarce or shrewdness
OF the lender and the neediness of the
borrower.
In order to conffne the operations oe
the society strictly to the purposes 1t is
provided that the amount lent to any one
person shall not exceed $3.50. and the
property TO be accepted as collateral is
limited to the ordinary articles of per
sonalty. The society is forbidden to ex-
= e-cise any banking power, whether issue.
deposit or discount; is not allowed to re-
ce1Fe money or negotiable securities on
deposit nor to lend money on commercial
paper, notes, checks or drafts.
The rate of dividends which the stock
hcIaers OF the society may receive out
OF the profits of the institution is fixed
by law at 6 per cent per year.
AN important safeguard for the borrower,
IS the regulation governing redemption.
rms provides that renewals of a log,
may he made from month to month Inc
whole time CT the loan not to exceed ona
year Not until the expiration of full
year after the loan has run it's term NAV
an article pledged be sold Then il is 10
be disposed of by auction under the di
rection Of the society to the highest hid
der for cash, the society being allowed 70
become bidder and a buyer at such sale.
The net surplus of the proceeds Of the
sale, after the cost Of the auction and the
amount originally advanced bv the So
ciety, have been deducted, must be held
for two years, subject to the demand of
he pawTer or legal representatives. This
practically does away with the conffsca-
ton by which many pawnbrokers bv ar
bitrarily enforcing the rigid and one
sided agreement under which loan IS
MADE, secure possession of valuable ar
ticles on which they have advanced bnt
a small part of the real worth.
There are rigid provisions for forfeiturs
of charter and liability for damages in
case of the violation Of the terms Of the
law, and any director, officer or enplove
ST the society, upon conviction Of such an
offense, is made subject to fine Or i'm
prisonment.
:. With this legal standing and the CO.
operation of the state secured, the State
Pawners' Society of Chicago was organ
lied about two years ago, with capital
stock of $4,000. Among its sponsors are
some of the best known men of the city
A few of them are John V Farwell Jr..
son Of wealthy dry goods merchant and
himself active in many reform move
ulents; Nelson P. BigeIow, member of a
well known firm Of lumbermen; Rollins a.
Keyes, Edwin G. Foreman, bankers; Ed
ward B. Butler, prominent in the paper
Industry Of the West; John c. Shedd.
president of the largest ice concern in the
city, and largely interested in the firm of
Marshall, Field & Co., and Leslie Carter.
capitalist and president Of the South Side
Elevated Railroad company
MI barwell is the president of the So
Getty mr.. Bigelow its secretary, and Mr.
Foreman its treasurer
An idea of the extent Of the operations
of the society, of the number of persons