The Washington herald., 1913-09-17
"LOAN' letters
sent CHILDREN
Companies Soliciting Business
from Boys and Girls Of
the City.
MADE BOLD BY RULING
Concerns Show Greater Activity Since
Decision by Justice Clabaugh.
Exorbitant Rates of Interest.

fidentiaI transaction of business"
These letters have been in use for
years. Since the decision Of Justice Cla-
baugh, however, the loan" men have
been sending the letters not only to men
and women. but to girls and boys far
too young to realize the true import OF
the letters.
In the campaign of the loan COM
panies no section Of the city, however eX-
elusive, has been neglected. In fashion
able Columbia Heights and Connecticut
Avenue Heights letters have been sent
10 young people whose names are not
in the city directory. Children of many
wealthy and prominent Washingtonians
have received the letters.
Where the names for the campaign
were obtained is something of a myS-
tery. Reformers in this city who have
been fighting the loan shark evil say
the names are obtained by means OF
sucker lists" often bought. used. and
resold by loan" men. II is charged fur
ther that the "loan' companies have
sent the letters in the hope that girls
whose parents will not allow them all
the spending money they want, may be
lured into borrowing money, usually at
eXtortiOnatc rates of interest. This
by parents who fear the publicity which
the rates Of interest.
sample of Letter.
A sample of the letters sent by The
Potomac Financial Company" of 1879 6
Street Northwest, is reprinted below. This
letter was sent TO the daughter Of
prominent Washington business man.
Her name is not in any Washington di-
rectory. The letter. headed with the
modest title, Bankers TO the People"
follows:
Dear Friend:
Many years of experience in catering
to the better class OF people Of this city
has taught US that an Office which would
bring about the least embarra ssment 10
the customer and with a minimum charge
for our services. would be appreciated.
1T is with pleasure that we inform you
that we have provided facilities for the
confidential transaction Of business, and
our offices are so arranged that you may
talk with us without embarrassment.
our policy is TO conduct our business
along conservative lines; you need have
no more hesitancy in dealing with US
than with a national bank or trust COM
pany. Privacy and dispatch, together
with courteous and fair dealing, has
won us many friends.
From $40 Up.
I'VE make loans from SO up on your
promise to pay. Any transaction with
us is arranged privately and quickly. We
hand you the money while others are
making arrangements Everything Is
done in an honest, straightforward man
ner, and we guarantee you satisfac-
tory transaction throughout
Hoping that should the time come
when YOU would seek accommodation
that you will at least call on up and let
us explain our methods: better still.
call on us today and make inquiry, then
when the times comes that a loan will
be OF assistance TO you, you will know
just where to go.
Yours respectfully.
POTOMAC FINANCIAL COMPANY"
The only clew to the identity OF the
writer is in the initials "KA LBA." In
order that there might be no complaint
of Misrepresentation. the original letter
is followed in reprinting as to grammar,
spelling. and punctuation.
Application 6as made yesterday at the
offices of this company for a loan of
ST..
Great caution was exercised by en-
ployes of the company TO prevent litera-
ture which might be compromising leav-
ing the office.
The application blank furnished was
not permitted in the hands of the ap-
pllcant Regarding the confidential"
reference of the letter. here are some Of
the questions:
Are you married and keeping house?
Have you any household furniture?"
Are you SINGLE" COn receiving a mega
tive answer
What is your present address
How long have you lived there?
What was last place OF residence?
Where do you work.
How long have you worked there?"
What is your salary?''
There was no question as to age. The
applicant is under legal age.
The emplOye who asked the foregoing
questions told the applicant that I'VE will
tell you tomorrow night whether We will
make the loan"
Rates Are Exor5itnnt.
The rates of interest quoted in no case
are less than ten times those permitted
under the loan shark law. For the use
of Sl5 for three months. the borrower
would have to pay a total of sos. At
this rate, the interest roughly, is Il per
cent a month. For a loan of SIS for four
months. the borrower would pay Se2.eo
This also is at the rate of L per cent a
month, approximately. In both cases,
there are monthly payments. Charges"
ably would permit a claim that the rates
of interest are not more than 10 per cent
a month.
Commissioner F. 1. Siddons, who re-
signed the presidency Of the Monday
Evening Club "a leader in the fight
against loan sharks'D TO accept a Com
missionership, made the following state
ment last night in regard to the practice
of the loan companies:
Commissioners POwerless.
The District Commissioners have been
made powerless by the decision of JUS
tice Clabaugh rendering null and void
the loan shark bill. 1t is a question
whether we should attempt to prosecute
the many cases pending in Police Court
again loan sharks Police Court judges
might feel bound to dismiss the cases
because of the decision Of a higher tri-
bunal. 1t Is very difficult to make head
way under present circumstances. At
present We are seriously embarrassed, If
not powerless.
Personally, I had the greatest hopes