Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-05-17
The Loan Shark Bill.

Loan shark legislation hangs fire in
the House committee on the District,
but that committee. having now been
relieved of its work in connection with
bills affecting local taxation. will have
more time for legislative matters of a
constructive character The loan shark
situation has been in tangie to the
profit of the sharks. and to the loss of
needy borrowers. Conditions should be
so shaped at this session Of Congress that
that the loan shark industry will be de-
stroyed and yet provision made for
meeting the requirements of wage
earning people temporarily embarrassed.
who, without that kind of security re-
quired by banks or pawnbrokers, must
borrow money
The present law forbids the taking of
a higher rate Of interest than per cent
a month This interest rate has deferred
law-abding men from advancing money
in the loan business because the opinion
and experience of all those persons who
have examined into the matter demon
strate that the rate is too low for I'M
secured loans. The low rate has not.
however. deferred lawless men from lend
ing money at rates from rs to $50 per
cent per annum. When. after much ag1-
tation and investigation. opposition to
the loan shark business in the District
of Columbia crystallized. bill was pro-
posed allowing 2 per cent month to
be charged. which did not include the
pawnbrokerage business, which was I'M
der strict police supervision. The bill
in Congress was amended out of shape
and Internationally in the interest of
the loan sharks The maximum In
terest was cut down to 1 per cent
month. pawnbrokers included in the
terms of the bill. and a prohibitive license
fee charged loan companies. The loan
sharks opened offices across the bound
aries of the District and continued to
solicit and obtain business of the Dis
trict. Violations of the law were shown
to be so numerous that the corporation
councils office WAS swamped with COM
plants, and . compromise agreement
was entered into by the corporation
counsers office and the loan companies.
which agreement is still on trial, and
about the effectiveness of which opinion
widely differs. The corporation counsel's
office was justified in attempting a solu-
ton of the question by making an agree
but the question now Is whether those
companies are abiding by the spirit and
intent of the agreement.
The citizens committee which had con-
cerned itself with the question of loan
shark extortion methods prepared bill
which the District Commissioners APP
proved and sent to the House District
committee. That bill proposed to amend
the loan shark law that Ia per cent
month might be charged. and which also
would reduce the annual license fee from
sj00-which is not paid-to 500. which
probably would be paid. The House
District committee, after exhaustive
hearings on this bill. voted to amend
the Law by allowing an interest charge
not of Il. per cent but of per cent
month. and referred the matter to sub
committee with instructions to prepare
the amendatory legislation. There the
matter rests. The per cent proposal
should prevail. The proposition to amend
the law by increasing the lawful interest
to IL per cent originated not with
friends of the loan shark, but with those
persons who would put an end 10 loan
sharking Under conditions as they are
il is deemed necessary to provide loans
TO the poor in cases of emergency, and
at a profitable rate of interest. the loans
being unsecured. money would be lesiti-
mately invested in the business and the
rate honestly observed. This COMPETE
ton would put out OF question loan
sharks inslstent on exorbitant and eS-
tortionate interest In spite of inhibition
of the law. The matter Is very plain
To every student OF the loan shark
problem