The Washington herald., 1911-07-26

!. The Senate listened with interest and
astonishment yesterday afternoon during
the reading of a letter which unfolded
conditions which accompany the lending
and borrowing Of money by individuals
In the District Of Columbia. Senator
Pomerene, who presented the letter, in
timated that money lenders were break
ing the law and brazenly confessing to
1t.
A league Of five loan companies in the
District OF Columbia possesses an ag-
gregate capital of $23000O which Is risked
on indorsed notes at rates as high as
8 per cent month, according to the
communication which was sent to Sem
ator Pomerene, of Ohio. by ]. D. Leonard.
president of the League of Remedial
Loan Companies Of the District Of CO.
lumbia. The missive asserted that the
borrowing classes" of Washington pay
as high as 100 per cent q. year for loans.
The patrons Of the institutions which
charges a maximum rate of 8 per
cent per month for loans, the writer set
forth. We're Intelligent clerks and bust
ness men who know exactly what they
are paying and pay IT willingly" 1t
was asserted that for Congress to at
tempt to legislate for the benefit of this
class of citizens would be simply a case
Of loves labor lost"
Want Per Cent Monthly.
A bit OF advice to Congress in regard
to regulating the money lending evil,
which several Senators characterized as
astounding in the extreme, was set forth
in q passage of the letter which recon-
mended that the borrower Of money at
usurious rates be prosecuted as a felon.
1t was recommended that the loan COM
panies be permitted to continue their
per cent per month rates.
In scathing terms. Senator Pomerene,
at the conclusion of the reading Of
Of the loan companies and charged that
they had plainly confessed to breaking
the law of the District which fixes the
legal rate Of interest at 6 per cent, and
10 per cent interest by contract.
The Gallinger bill, commonly known
as the loan shark measure, to regu-
late the business OF loaning money in
tie District by persons or corporations
other than banks. trust companies, and
building and loan associations, came up
IN regular order on the Senate calendar
and was the subject Of a. lengthy de-
bate, in which Senator Curtis cham
pioned the committees stand for q de-
creed interest of 1-2 per cent a month.
Senators Hepburn, Burton, McCumber,
Davis, and others protested against the
passage of the measure as not corrective
OF the loan-shark evil The Idaho Sena-
tor finally talked II to a point where II
was displaced by the wool tariff bill. the
unfinished business.
Senator Pomerene's Amendment.
In lieu OF debate on the last-named
bill, Senator Pomerene addressed himself
to his amendment to the loan-shark bill,
which places the interest charge at s
per cent a year. After asserting that
Congress was being asked to permit the
loan sharks to charge their usurious
rates when in justice to the spend
thrifts and persons who yielded to needy
conditions, It should drive them out of
the District.
I'VE believe that such a drastic law
as you suggest-a rate Of per cent
per annum-would not stop usury," wrote
Mr. Leonard. but would simply drive
all the money lenders into hiding, and
the added cost and risks Of operating
in the face Of such a law and in viola
ton Of it would have to be paid as in
every other case Of bargain and sale by
the purchaser, or IN this case by the
borrower. This Is inevitable"