Shiner gazette. [volume] (Shiner, Tex.) 1893-current, 1909-01-07
Enormous Profits.

Women are largely employed by
the loan companies. They work for
lower wages and then, too, there
would be constant danger OF physi-
cal violence eff the borrowers were
treated by a man as they often are
by the women managers"
A long series of interviews with
men in tho loan business, some of
whom talked frankly, led Mr.. Was
sam to conclude that the 80 loan
Offices of which he knows personally
have an average of $4,000 which
brings in yearly an average return
of not less than $4,000. In all, the
investment is about 100000,
with which is done an annual bus
mess of about $1,2OO.O0O. There is
comparatively little legislation on
the subject, but those states wnich
have attempted to regulate 1t nave
fixed the maximum interest at from
1 1-2 to 3 per cent month. The
legal rate of interest in New York
state is six per cent a year. In the
few cases which have been taken be-
fore a court the loan companies
have commended that this rate did
not apply to them; that they wNre
not loaning man money, but 'e
buying his salary in advance, ., t
as they might buy a farmers grow
ing crop. But very few cases are
ever taken into court. IL the COM
pany suspects that a man has even
consulted lawyer, it demands i'm
mediate payment with a threat of
notifying his employer. linen, too,
the men who borrow on salaries are
not often the kind given to litigation
That they are wage earners is clear
ly shown by the fact that 80 per
cent of the payments are made
weekly and the most frequent
amounts are under SIS. 1t is the
workman with the Saturday pay en-
velope and most often the employe
of large transportation company
or manufacturing establishment, VINO
is the usual customer. In some
cases he is even led into the trouble
by his superiors. Mr.. Wassam has
records of foremen, timekeepers, and
even of a private secretary, VINO
were paid commissions on all loans
made to the employees of their house.
Loans Are Necessary.
The salary loan, Mr.. Wassam
points out, is necessity in large
/ city to the man on small salary.
/ If his WI ees just about equal the
J cost of living for himself and his
} family, he must borrow somewhere
in case of sickness, to meet insu-
rance premiums, and in many fami-
/ lies emergencies. Salary loans are
not intrinsically bad, but at present
) the business methods in vogue are
: frequently open to severe criticism
| This is especially true where the
E loan is made from outside the state
Y as in the story which opens this ar
: ticle. A company in Providence. r
: l., loans all the money. The loans
= are made through agents in New
York, whose sole interest is in theil
y commissions. The collections or
g overdue payments are made by
S large collection agency an offer o.
: which told Mr.. Wassam that it!
lcharges were based on what the,
r thought they could get out of man
/ The collections on overdue payments
r Head often to the making of a new
S loan to repay an old one, thus
d enmeshing the borrower in an end
less chain of debt.
e The chapter on Proposed Rene
n dies" has for its keynote this sen
: tence: THE salary loan business
n thrives upon secrecy and any effor
y which tends to destroy this secrec,
r Twill aid in regulating the business.
s A woman who manages loan OF
e flee told Mr.. Wassam that 1.-THE sal
a airy loan business depended upol
II their ability to keep the general pub
r lie uniformed as to their methods.
l. Another manager said that IL cam
l. paign of publicity commenced som
II time ago by the Now York Heral
y had been continued, it would hav
1t been necessary for him to close hi
d two offices.
D, Mr.. Wassam's suggestions are
Complete publicity; cooperation b
employers in guarding their me
te against extortion; consulting tn
er wife and family; legislation cover
is ing rates, conditions, regulation {
IN deceptive advertising and prohibi
n ing the use of the mails to misrel
n resentative circulars; and possibl
10 the establishing of a loan associi
at ton to be run like the one col
Id nected with st. Bartholomew
es church. This is a business philal
q. thropy,' paying fair returns on tt
"a small capital which the church coul
to furnish, but run in the interest {
II the borrowers. 1t has been col
a spicuously successful, and in mir
he years operations its losses hay
ne been less than five-eights of or
per cent.