Evening star. [volume] (Washington, D.C.) 1854-1972, 1912-12-21
Extract From Reports.

In one of the reports which the con-
ferees on the bill now have before them
examples for the need of a loan shark
law are cited. The report covers condi-
| tions in this city, and states
| evidence was presented to the commit
tee which disclosed a most remarkable
condition of affairs in the city of Wash
ingtOn. Many instances were cited in
which loanerS We're eXtorting from poor
and timid borrowers rates of inter est
upon small loans ranging from 80 per
cent up Among these instances are the
following, mentioned by w. III. Baldwin
of the citizens committee of the city of
| Washington, which he says occurred in
| this city and which fully indicate the ne
cessity of legislation regulating the prac-
tice of lOaning money in small amounts
to persons in needy circumstances:
"A woman whose daughter came down
| with tuberculosis Was told by the doctor
she must be sent away for this reason at
once. She borrowed S1OO from promi-
nent money lender in this city. and be-
| sides paying fee of $1.JO. gave twelve
monthly notes for $11.7O each, making
$40. 40 This is equivalent to paying back
the 500 in twelve payments of $S.33, a
month apart. The rest is interest. In
terest of $S.33 for one month"; at per
cent is $0.O4167; at l per cent is $0OO6945.
by $O.O06945 is $0.5417, at 1 per cent. In
terest charged. beside fee, $4O.4O. Divide
s4O.4O by $0.5417 and it equals 74+ per
cent per annum. actual rate charged. For
a woman with sick daughter. She made
eight payments. and then lawyer helped
her out by making settlement at per
| cent under threat of prosecution.
''B. young man in government bu-
| reau had to have $50. He got 1t from a
man who had started in the lending bust
! ness recently. and gave five monthly
notes of $S.9o each. or $A.75. This equals
| fifteen monthly periods OF One-f1fth of the
! amount borrowed, 81. and the rest is in
| terest. Interest for one month on 81. at
! e per cent, is SO.031: at l per cent is
$0.OO3S 1-3. Fifteen times $O.O05s 1-3 is
SO.OS75. which equals the interest at 1
per cent. Divide the $9.7o paid by $0.OS7J
and it equals I'LL per cent per annum,
rate charged and in this case actually
| collected.
Exceeds Amount Borrowed.
| &C. A man borrowed $40, giving a
mortgage and another name as surety
| and making twelve monthly notes of SIT
| each, which makes $2O4 This is equiva-
lent to paying back $14O at $11.66 2-3
per month. Remainder Of $64 is inter-
est. Equals seventy-eight monthly pc
| RODS. Interest on $11.66 2-3 for one
month. at per cent. is $0O5s3 1-3; at l
times sO.OO972 10 equals $O75S3 interest
at l per cent on al Divide $64 by
| SO.75S' and it equals ST. per cent, the
rate actually paid on well secured loan
| of this size.
ID. From another lender a man got
So paying ST fee and giving ten semi
monthly notes of $40 each, or $42, for
the $24 received This is equivalent to
paying back the amount at the rate OF
$40 each half month. and the remainder
of s1S is interest and fee. Interest on
s2.4O for one-half month. at per cent
is $OOO6: at per cent is SO.0O1. F'ifty-five
periods at S0.0G1 is DOJ5. Divide SIS
by 5000. and it equals 327 per cent. If
the 81 fee is left out. calling interest $l7
it still equals 200 per cent This is the
worst 1 have found yet, but there is nc
limit"
The report continues:
'.The committee are assured that in
| stances of this character can be multi
piled without number. and are satisfied
that the evil has reached such proper
tions that remedial legislation Is iinpera-
lively demanded.
Purposes of the Measure.
| '.One of the purposes Of this measure
is to place in the hands of the Commits
sioners of the District of Columbia in.
formation which will enable them to en-
force all it's provisions and to prevent the
exaction by Ioaners of extortionate rates
of interest from borrowers who happen