The Washington times., 1906-05-08
Dragnet on Loans With
out a Friend Before
the Hearing.
DECISION IS UNANIMOUS
Arguments Showed That
Trouble Instead of Bene-
fit Would Result.

A subcommittee Of the House District
Committee. after hearing arguments by
representatives, of the Business Mems
Association and by former Senator
Thurston. announced that il viii vote
unanimously against the pending bill 10
make usury in the District a penal Of
fense. punishable by a 500 fine, or six
months Imprisonment.
Nobody appeared TO speak IN favor OF
the measure.
Those representing the Business Mems
Association were Wilton J. Lambert.
Charles Linkins. Chaplin Brown. and
Fred G. Coldren. Mr. Thurston repre-
sented several brokers.
All the speakers opposed the clause
making il a penal ofrense for anybody
verbally contracting to lend money for
more than per cent or contracting in
writing to lend II for more than 10 per
cent The bill was introduced 70 relieve
department clerks OF ''tea-percentcrs.
Those opposing the bill and its enact
ment said it would make the lot Of
small borrowers worse instead OF better
Present Code Provisions.
Chaplin Brown pointed out that the
code now provides for a verbal contract
Of not more than g per cent or for a
written contract Of not more than 10
per cent, the only penalty for violating
the law being forfeiture of all the in
terest by the party receiving it.
He objected TO putting usury In the
penal code. saying it Is always posi-
bic to evade usury laws. however they
are framed He pointed out that the
only legislation to help the poor people
is 10 pass law specifying that banks
make loans more accessible to the poor.
Wilton J. Lambert argued that the
present law on usury Is ample to pro-
tect all people. Asked who favored the
pending bill, he said he understood there
we're some who wanted to prevent
certain Government employees from
trading on their feilow-clerks.
He said the effect Of the bill. II pass
ed. would be TO put legitimate lenders
out of business and leave in IL only
''scalawags." who have money TO lend
and who are Of such a character that
they viii run the risk of being sent TO
prison.
Again said NIr Lambert, 'in con-
sidering this bin you must remember
that there is not a single financial in
stitutinn in Washington which will lend
a man money unless he can put up ex-
cellent collateral Orreal estate. Therefore,
poor man. If. for instance. his wife was
sick. would have no place TO raise
little money save with these men who
VIII lend him money at a rather high
rate on his household furniture"
Mr. Lambert thought. therefore. such
A bill as the one under consideration
would be a hardship on the poor people
rather than a relief for them
Charles Linken spoke briefly, uphold
ing Mr.. Lambert's contentious.
Brokers Not Money Sharks.
Former Senator John p. Thurston said
he represented several brokers who are
not money sharks" but who do an
open business in lending money He de
Clared that he know OF none of them
growing rapidly or enormously rich
from the business. He pointed out. how
ever, that somebody has 10 pay their
commission and some profit"
Mr.. Thurston said he is convinced the
present law, providing forfeiture Of the
usurious interest, IS enough punishment
for the Offense. He thought a lack of
all usury laws would be beneficial 70 the
poor classes and obtain for them better
rates on which to borrow money.
He also contended that the enactment
of the bin would degrade the money
lenders of the District. putting into the
business men of a character so low as
~ - "ii4ii1S ~ run the ilSh OF I'M
pro~ement and the consequent disgrace.
What little agitation there has been
20 make uSUry penal offense.' he said
has come from Government emnloves
who live on salaries and are at times
compelled 10 borrow money somewhere
on short notice. AS n matter OF fact
the passage OF this bin would not holm
this class. The lenders. Obliged To r,ib
great risk. would charge higher rates
That would harm, instead Of benefit tie
borrowers.
Mr.. Thurston was then told by the
subcommittee that 1t was not in favor
Of making usury penal Offense.