The Washington herald., 1911-09-17
NATION MAY HANG
OUT THREE BALLS
Uncle Sam Studies Pawn
shop Business.
MOST SUCCESSFUL IN EUROPE
Officials of Commerce md Labor
Department Probing Method Em-
ployed in stnrtIne> and Conduct
ing n National "Hock" shop for
Convenience of the People.

Shall Uncle Sam turn pawnbroker?
Shall he become uncle to any part
of his ninety-odd million nephews and
nieces who may care to put anything
from bedclothes to diamond tiaras in
soak" at reasonable interest rates?
Shall he follow the example Of France,
Germany, Holland, and other foreign
countries and make 1t possible for the
temporarily embarrassed to obtain mon
ev on personal collateral without paying
from Sc to lC0 per cent interest per
annum?
This question is one that will be called
I'D for serious consideration through a
series Of consular reports being prepared
by the Department Of Commerce and
Labor on 'Pawnbroking in foreign
countries"
A number Of the reports have already
appeared, and bear. apparently, the
strongest sort of evidence in favor of
governmental and municipal pawnshopS
They show how in other countries a
Maternal. national or city government
makes il possible for citizens to avoid
the clutches of greedy. private concerns
and the exorbitant rates Of interest
charged by these concerns.
Long n Success.
In the countries where the plan has
been tried longest its success has been
most marked. The citizen is furnished
with what money he needs up to a rea
sonable amount on personal collateral.
his interests are protected far beyond
the point TO be expected from q private
concern, every possible incentive to re-
deem his property is furnished and the
average rate of interest charged is less
than u per cent per annum Moreover,
with the possible exception of France.
where the government exercises a COM
plete monopoly of the pawnbroking
business, the national and municipal in
stitutions have succeeded in the face
Of strong competition from private con-
Germs that have been permitted to
charge much higher rates of interest.
and to take greater chances. at the ex-
pense of the public.
Amsterdnm's PnwnshOp.
The pawnshop of Amsterdam. the
oldest. and. probably. the most success
full public pawnshop in the world, is
known as the Bank van Leening. 1t
has been under the control of the mu-
nicipalty since 1914 and has fifteen
I branches throughout the city. The aver
age rate of interest is less than 10 per
cent per annum. Surpluses over
amounts loaned. minus interest and per
cent for administration. is returned to
the owners of unredeemed pledges after
sale whenever possible, and still the
bank is able to show profits OF nearly
! 81. 100000 annually, besides providing
handsome pensions for old employees.
The bank consists of n manager and
five directors. appointed by the city
council, three of whom must be mem
bers of that body. The manager has
ha 20 oil adj
tions of loans. The revenue of the bank
is derived from the following sources:
Interest on pledges; amount of S00O4 to
500 charged on each loan for admins
tering expenses in addition to the in
terest; amounts received from the sale
Of pledges; percentage paid by the
buyers of pledges in addition TO the auc-
| ton price. and rent for parts of the
building owned by the pawnshop but
not required for its service.
No Church Property.
The minimum amount loaned is Is
cents and the maximum S2O1. No loans
are made on ornaments or other articles
belonging to a religious society or which
are used in religious services, nor are
! loans made on goods which are suspected
as coming from a charitable institution
| The scale of interest rates begins at s
! per cent per annum, and stops at 13 per
cent.
The pawnbroking business in France is
strictly a government monopoly, which
| for any loss on the sale of unredeemed
pledges. they seldom err against them
| selves.
Incentive to Redeem.
This policy, by the way Of advancing
only a small percentage of the actual
worth Of the pledge. "a followed IN most
European countries where there are ma
| tional or municipal pawnshoPs. and fur
nishes the owner with further incentive
| to redeem his pledge.
In France, nominally the contract is
| for a year, but every effort is made to
give the pledger a chance to redeem