The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1913-02-25
UPHOLDS CITY in
LOAN SHARK CASE
Sweeping Victory Won Over
Dealers in United States
Supreme Court.
MAY REGULATE BUSINESS
Money Lenders Forced Now to
Pay Heavy License De-
Inanded by Council.
MAY REGULATE BUSINESS

license tax was upheld III the United
| states Supreme Court ut Washington
| yesterday, the city winning q complete
! victory in what has been known in the
| courts as tho loan shark case" Incl
dentally. several legal points are set at
! rest. tho right Of appeal from n Coun-
| Gil committee to the Council being held
| to be due process of law" within the
meaning OF the Federal Constitution.
giving every man his day In court
without further procedure, and the
police power of cities to regulate loan
Offices charging in excess of the legal
rate of interest is fully sustained. The
case was argued some weeks ago before
tho Supreme Court by City Attorney
Pollard and submitted.
| Ten Per Cent Per Month.
AS far back 1906 the city at
tempted to regulate the loan shark
evil, which at that time was shown by
| investigation to be enormous, people
of small means and day laborcrs being
charged ms much as 10 to % per cent
! per month on small loans. with an ini-
/ tial fee for investigation in addition
AS many of these loans were for three
/ or four months, the loan sharks
made additional money by charging n
/ new fee for Investigation" at each
renewal period, and the practice has
not been entirely abolished. some re-
cent cases having come to light where
working people of small means have
paid In interest charges i'm a single
I y
the initial loan.
II, 1906 the city assessed tax of
$500 each against the following prl-
| vate bankers. then doing business in
this city: l.. S. Bradley. trading as
Bradley & Co.; c. T. GuiIettc, Indus
trial Fond and Banking COMPANY.
Legion & Co, u. L. Pollard. Purvis &.
Co. w. Il. Matthews. Richmond Loan
and Guarantee Co. y. II. Tolman, Tide
water Trust Co. and Virginia Loan
90. some wcro local concerns and
some were mere agencies Of concerns
doing business throughout the coun-
| try.
Made Test Case.
All refused payment. were fined in
| the Police Court for operating with
out "A license, and judgments were OBJ
! tanned against each i'll tho Hastings
case OF Bradley d Co. was made the
| test. all of the others resting on the
outcome Of that litigation. and each
is now due the city for the license for
| each year since the ordinance wa.
adopted, together with the interest and
| fines.
AS many eight or ten decisions
| OF the state Supreme Court are said to
hinge on the decision of the United
/ States Supreme Court on the broad
constitutional points involved. The
| Finance Committee of the City Coun-
/ Gil, under the general ordinance, rcgu-
| lated the classes into which different
merchants and business mon fell for
purposes or taxation, each having the
right OF appeal to the City Council
/ The dealers complained that they
were charged a much larger annual
license tax than was assessed against
Legitimate banking houses, doing a
general loan and investment business.
within the legal rates OF interest. That
there was unjust discrimination in this
license and that it's amount was pro-
| hibitivc were tho grounds on which
| the appeal was made.
Within Police Power OF City.
! The decision shows II to be entirely
within the police powers of the city
| to use the taxing power for purposes
| of regulation OF an abuse Of this char
acter. Not only has the city the right
I TO impose 4 special license tax on this
! class OF business, but IT may make
| other regulations of IA police charac-
| ter governing the conduct Of the bust
| ness, as, for instance, In tho recent
case of pawnbrokers. where n memo
randum of each transaction is required
to be filed at police headquarters
daily.
! Fighting for their lives, not only
in Richmond, but in many States
where active steps have been taken to
secure prohibitivc legislation that
would drive out the loan sharks alto-
gether. the private bankers were rep
resented In the United States Supreme
| Court at Washington by Henry Har-
| ris, of Los Angeles, Cal, who has had
charge of their campaigns in several
| contests.
Stripped OF technical terms. the de-
cision of tho Supreme Court follow.
| closely the argument of City Attorney
! Pollard, and turns squarely on the
question of police power OF cities. the
decision in the mind of many attor-
neys having Il far-reaching effect in
strengthening that power and giving
the city the right to protect the UNI
fortunate.
Ample Right Of Appeal.
point OF law of more than local
interest lies In the courts construc-
tion of the term due process of law
In the fourteenth amendment TO the
Federal Constitution. In n recent de.
cision the city lost it's building line
contention because in that ordinance
there was no right Of appeal from the
action of the Street Committed Tho
action OF two-thirds OF the property
owners on a block fixed a building
line. and on proper petition the Street
Committee had no option but to re.
cord tho law made by portion OF the
property owners OF tho section. Tho
minority was given no day in cour,
mo 1iI/t OF appeal, and the nna
| court OF resort declared the. ordinance
invalid. But in this case, the cIassi
fication Of license was fixed by the
Finance Committee and all dissatis.
fed had the right OF appeal to the
City Council. which is hold to be under
tho meaning Of the Constitution "due
process OF law and an ample protec-
ton OF the rights of the minority.