The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1911-09-19

| and the law must presume that ii wa.
OF the value OF ssS, at least in the
eyes OF the contracting person.
But the borrower got only $25. For
keeping s26 twenty weeks he pays $1s
clearly .il.erest or penalty, or COM
mission, or bride, or blood money, on
whatever other euphemism or evasion
you like. The rate OF $I3 for twenty
weeks is at the rate Of $3.50 a year.
or 1852 per cent. This is slightly in
excess OF Ill per cent a month.
yet there are loan sharks who charge
higher rates. Think of 1T!
II the borrower had kept the money
only three months, which is generally
the shortest period for which notes
arc made, he would have paid $50.
Most Of the companies charge more
than this. In other words. the bor-
rover paid not less than 81 for using
$25 three months.
But stop a moment. Do you keep
the $25 for three months or for TWEEN
ty weeks? Certainly not. The week
after you get the money you must re-
turn $3.50. Each week you decrease
the amount of money on which you
can by any quirk OF reason be paying
Interest, and thus raise the interest
rat
TO Illustrate: The first week YOU
have the whole SIS and are thus pay
Ing interest at the rate Of only 1925
per cent year. But the second week
you retain only $3.50. AT the end Of
ten weeks you have only So Of the
lenders money In your hands. At
the end Of thirteen weeks you have
practically paid him the full amount
given you to begin with and are then
paying interest for money which you
have repaid, and interest based on a
period Of time which win not elapse
until you have taken up all payments. |
Rather complicated, but true.
To get the correct angle for inter-
est computation In q case of the kind |
Is perhaps difficult. II is not correct
to say you did keep the money thir- |
teen or fourteen weeks and thus find
that YOU paid obtu 81 a week |
interest or about 200 per cent. Strict
" computed you have paid much
more.
The first week you had SIS; the
fourteenth week nothing. In other
words you had an average of about
1880 In your hands for fourteen
weeks. For this you paid $13 in in
-erest. For the actual time you had
he use Of the money remember YOU
lid not have the original $25 for use
except the first week and the sum you
'eally were using was decreased at
very installment) you paid interest
1t the rate Of little more than s4S
year. You had In your possession
or less than fourteen weeks an aver
lge Of about $3.50. In other words
Fou were actually paying interest al
he rate Of about 400 per cent per
'ear.
This would. Of course, not be true
we're the loan shark to allow Won TO
'eep your $25 until the time Of the
tote mad elapsed. But he does moth
ng Of the kind. You are constantly
laying interest at his rates on money
which he is at the moment using
'etting more interest from some other
Unfortunate. Thus is the endless
hahn linked.
Here Is typical case OF the routine |
I getting loan. This is what you ,
aust go through for the high and !
onorable privilege Of paying some !
eech 400 per cent year.
girl manager meets you in the !
fflce Of the loan shark. You com /,
to her your desires. She | 7
axes out blank and begins with a =,
tring OF questions, among which the
are the essentials:
Your name, salary place OF employ
lent kind OF work, name of employ
T, your place Of residence, whether
larried or not, how long you have
eld your present place, where YOU
worked before, how long you worked
here, what your salary was there.
whether you owe any bills. whether
ou pay your rent the name Of your
andlord, his address, telephone num- :
er, names Of your parents and other
your age, your wffe's name .
you have wife, what you mean to
o with the money, and probably ..
wenty other insane questions. among
hem whether you expect to be dis
harged from your position.
Having supplied this encyclopaedia
mount OF personal information YOU .
re told to call late the next afternoon
r ask by telephone the outcome OF
our case.
Meanwhile your application goes to ,
ne clearing house. If all is well there
reporter for the loan shark looks
ou up. The reporter is always q
Dung woman for the good and suffic-
ent reason that some employers have
habit Of being rough with imper-
Inent male. The young woman asks
here, what your pay Is, and whether
on are good for so much ain merchan-
ise." Having compromised you with
ne employer she proceeds to the land
'rd and determines whether You nav
our rent. The same compromises il
there.
III all goes exceptionally well vou !
ct the money within a couple of !
avs If there is the least hitch Won 2
aust have an endorser for your note. Z
he rule with most companies Is that 6
ne borrower must have been EMPLOY ?
d In his position at least one wear.
On the other hand, however many g
iembers OF the leaders clearing house $
isregard the reports II they think a 7
IAN can pay they will lend him mon
despite the fact that he may al
eady be entoiled with another lender. Y
nus they conspire q sin upon a sin Ia 9
ct the hopelessIy lost borrower 10 2
eeply In the nets that he win not es- I
ape for years-that he probably win y
AIRY upon him To the horizon Of life Il
le burden OF the usurer. IA
&
The greatest sale ever held In the I
orthwest 10 now In full swing at y
[uus Bros store In Moorhead. t
IL
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