Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-03-16
Brokers Not a Unit as to What
Is Fair Profit.
HEARING IN subcommittee
Advocates of Bill Urge 2 Per Cent
Monthly Interest.
LABOR OPPOSES LEGISLATION
Objection to Supervision by Com
missioners Set Forth by Counsel
for Loan Companies.

subject of a public hearing before the
subcommittee on judiciary of the Sen
ate District committee this morning in
Senator Dillinghams office.
Representatives of the citizens commit
tee, which is urging the passage of such
q bill, of local loan companies and of
civic organizations Locked horns over the
question of what is a reasonable rate of
interest to be charged. There was a
wide divergence of opinion.
A representative of the American Fed
Grafton of Labor declared that the pro-
posed legislation was all wrong because
no higher rate than per cent per year
should be allowed in the District. One
operator Of a loan company declared he
had been doing business for several
years at 212 per cent per month, but
thought the bill should allow 5 per cent
per month.
The representative of another company
declared that he had found per cent
per month fiat rate. without extra
charges, sufficient to do profitable bust
ness. Still another money lender de-
clared that all usury laws in the Dis
trict should be cut out of the statute
books and no more put in.
The bill as it now stands provides for
an interest charge of per cent per
month on loans up to SIS and of 1 per
cent per month on loans between S25 and
$500. 1t was to the interest rate that
speakers directed special attention.
Citizens Committees Opinion.
w. H. Baldwin, chairman of the citi-
zens' committee formed as the result of
the activity of the Monday Evening Club
TO work for the passage of loan shark
BILL was the first speaker. He advocated
per cent per month interest rate, with
a prohibitions against other charges
At the beginning of his statement he
said 1t was recognized that there were
some people that money could not be
safely loaned to at g per cent. They need
money, however, he said. and the ques-
ton is to determine what is fair inter-
est charge.
He told Of the experts who have been
consulted In the preparation of the orig
inal bill and said the sum total of their
advice was that per cent fat interest
rate was necessary and reasonable.
AS | understand it, you do not desire
any lower rate?" Senator Dillingham;
asked him.
No. we think that is as low as is nee
essary." He also desired it no higher.
01uc OIL Loan agencies.
Local loan agencies were represented at
the hearing by o. P. NJ. Brown, a WASH
ington attorney He told the committee
that the loan agencies were not opposed
to legislation that would put the business
on a firm basis, providing the law is fair
to both lender and borrower and does not
put the business in the hands of one COM
pany run as a charity, with no idea of
profit.
The provisions OF the proposed bill re-
lating to the licensing and bonding of
loan companies, he said, were not opposed
by the companies. Strong opposition was
expressed, however, to the provisions re-
curing the registering Of the transactions
OF the loan companies and the placing of
these registers open to the inspection "by
petty inspector from the District build
ing"
He pointed out that the leakage of in
formation gathered by an inspector might
do great damage to the credit of a bor-
rover. AS substitute he advocated a
provision that will require the lender to
furnish the borrower with a typewriter
statement of the entire transaction. show
ing the interest charge and the date of
payment.
Discrimination Objected To.
AS to the rate. Attorney Brown point
charge per cent per month.
THAT may be wrong rate" suggested
Senator Johnston.
to discriminate.
What Is a reasonable rate?" Senator
Dillingham; asked.
IF all charges are to be eliminated eX-
cept those for notarial and recording,
per cent per month is the least rate at
which these companies can operate"
The attorney for the loan companies
was willing that the amount of money
to be loaned should be limited to $40.
instead of $500 as provided in the bill, if
the committee will allow per cent
rate.
He also opposed the provision of the
bill giving the Commissioners power to
make regulations for the government of
the loan companies. The law should be
complete, he said, and the companies
tons which might be extended without
end.
Never Had a Complaint.
J. S. Leonard of the Mercantile Loan
Company told the committee he had been
In business for eighteen years and had
never charged more than 21a per cent.
lie has increased his capitalization from
81, 600 to $4,000. he said. and has never
heard a complaint against his company.
His net profits. after paying losses.
were 10 per cent last year on his
capitalization. He favored 3 per cent
rate, however, saying the rate allowed
the loan companies should be the same
as that allowed pawnbrokers
If the 3 per cent rate were authorized.
l would not charge more than 2h per
cent" he told the committee.
AS compromise, he suggested that a
per cent rate be allowed on loans up
to 500, per cent on loans from 500 to
$500 and j per cent on loans from $500 to
$500.
Two Per Cent Rate Charged.
j. T. Exnicios OF the Society for Saw
ings described the operations of that or
ganzation. 1t began by charging 3 per
cent and n fee on all loans. and now