The Washington herald., 1914-03-19
Way Of GETTING
Loans IS ASKED
Substitute for Sharks De-
clared Necessary to Aid
the Poor.
COL. BACHELORS VIEWS
Says Two Concerns that Lend Money
at 6 Per Cent Afford Little
Relief. ...

for people temporarily embarrassed To
obtain loans OF money at per cent.
when the security they have to offer is
no better than that which has been &C
cepted by the sc-caIled loan sharks"
The mischief in this erroneous view
is in that it is preventing such public
action as would otherwise take place TO
afford that relief which is a question Of
life and death to these temporarily suf-
fering the pangs Of poverty through
misfortune.
Congress passed the loan shark bill
without making any provision for the
unfortunates who have been compelled
10 resort to the loan sharks in order
that they could live at all. That loan
shark law has also. by indirection, pro-
hibited class of loans by regular banks
and trust companies, which newly and
additionally forces many honorable bor-
rowers today to loan sharks or starve.
Congress passed a drinking-cup law,
forbidding the use of regular and free
of-cost means OF drinking ice water,
without making any provision to meet
what it abolished. The consequence in
many cases has been TO drive men and
others into the cafes and barrooms as
the only place where they can get ice
water free. Frequent use of barrooms FOR
such purpose entails the purchase OF
liquors sooner or later by way of COM
pensation. The purchasable drinking
cups for one cent in places tends TO the
same end. particularly in hotels where
guests frequently feel that such cup
charge is a sort Of graft.
Congress passed a red light" law
without making any provision for the
victims il turned out into the street.
Alley Bill in Same Class.
Congress is threatening to pass an alley
bill. which likewise makes no provision
for housing the thousands OF tenants
now ia the allevs. which fact was spIen-
didiy shown at length by an extraordin-
ITilY well presented article in SUNDAYS
Herald. by Edith Elmer Wood: an ar
ticie the whole country should read and
ponder over.
There is an old adage which Congress
might profit by in its legislations to get
rid Gf admitted evils. which says: DO
not throw away dirty water until you
get clean
II is all right TO make evils unlawful.
LIT If the remedy is worse than the
disease. the subject from a common
sense standpoint requires greater con-
siIcrstiOr.
In the case OF the loan shark law.
inc su1j,"t IS the most serious in its
'.ir--sachinS effects of all above men
toned
Without money people cannot live in
tn!S climate Or District. To forbid its
obtaiGIl'ent in one way without proyid-
ing a better. Is a literal form Of COM
puisory starvation.
Concerning the enormously supposed
OUTSIDE methods of relief. in the vast
majority Of cases those outside methods
regularly incorporated. form no relief
at all. They, in such cases. force people
1" the loan sharks for which the re-
rus" themselves. for business reasons, to
undertake.
Conditions Are Rigid.
In this city there are two small con,-
rarativeiy speaking. concerns which ad-
Ncrtise 10 loan in small sums at Der
cent per annum under very rigid condi-
ll"nS. Those two concerns are the only
outside relief from the effects of the loan
shark law today in existence Both OF
Them are doing legitimate business for
me proht there is to them in it. As one
of them said to the writer: I'VE are not
phllanthropists but in business TO make
money. which. of course, is all right in
RSelt. but harmful in its effects when the
Peoplc-at-large are led to suppose IL fully
eets the necessities OF those who have
zen compelled 10 resort 10 the loan
IaTks.''
Both concerns. in instances have con-
;rrcd marked benefits upon fayorabIx
tuated borrowers. but those who happen
be thus favorably situated are less
man i per cent, it is safe to say, of the
Total number constantly forced to rely |
upon the loan sharks or starve.
Both concerns require two responsible
indorses on a borrowers note That
means three names on commercial paper
or promissory note. Any regular bank
viii discount at per cent, paper so in |
dorsed, TWO name paper is usually good |
enough for them, and it is said the two |
mentioned concerns take their three
name paper 10 a regular bank and dis |
count it for cash. before they give tn.
borrower his money as both REQUIRE four
or five days or so between the applica- |
tion for loan and the getting of it by /
the borrower.
Ono of these concerns said that mo
loans were made to anybody not having
Il regular income"
Cuts Out Ninety Per Cent.
That decision cuts out over 30 per cent,
at least. of loan shark borrowers. Be-
cause the vast majority of those forced
to resort TO loan sharks" are out of |
work, have no income, that being the
occasion of their need for money.
We are not saying a word against the
benefits those two concerns confer on the
small percentage they help among those
in SERIOUS need.
But when it comes to an iron-clad
regulation that two responsible names
shall be affixed TO a borrowers note in
order TO get any loan at all, then, of
course. the loan shark becomes the
only available last resort for rslief
Very lew, indeed. among the thousands
in this city today in serious need of
money in order 10 live at all, are situated /
To hnd two responsible indorsers to meet 4
the requirements OF these two concerns
Responsible people are not yet running
around loose TO inGcrse for some starving
MIN or woman.
All Of which state of affairs is utterly
heedtcss. The fact Of the matter is l.
mat but few Americans understand the
fist principles of banking.
SO Tar as the masses of the people Are
concerned this whole question was solved
IN Germany so long ago as ls49, by the
greatest fnancier that country ever pro-
uuced, Rafeisen. He taught the toiler
IL the cities having no surplus means.
and the toilers on the farm in similar
how by building and loan
societies, without any capital at all they
could become prosperous and self-sus-
tanning. And all that was necessary to
such END was. Irresponsible Endorsements
OF promlssory notes made payable to an
irresponsible borrower having honest in
tentions. No collateral security of any
kind, form. or shape. was required. &;
Raifeisen's banks" as they were
called. grew like wildfre, multiplied with 1
cut number. as they were costiess mu-