Evening star., 1914-04-11
PROBING SYSTEM
Of LOAN COMPANY
Local Organization Explains
Its Methods Before House
District Committee.

During the 'Toan shark" hearing before
the House District committee today ex-
plantations were made Of the methods OF
doing business Of the Society for Savings
and Loans, the one organization in Wash
ington for making small loans that has
taken out license under the loan shark
law, and which Is conducting business
under the low interest rate Of that leg1s-
lation. IN cooperation with the corpora
ton counsers office.
J. T. Exnicios, treasurer and admins
trative officer Of the concern, appeared
before the committee, and Chairman
johnson asked him IL he Is willing to fur
nish the names OF half a dozen borrow
ers under the societys combination loan
and savings scheme to appear as wit
nesses in q test case in court.
Declines to Supply Names.
Ar. Exnicios said he was certain that
the contract the society makes with Dor
rowers Is not in violation OF the law, as
officers Of the society have consulted
frequently with the corporation counsel
and its officers have been told that they
are within the law. He said he, there
fore, would not care to furnish names or
witnesses for the purpose of being ar
rested to test in court the value OF the
corporation counsels statements de
said privately that he would be willing
to have a civil suit as a test.
It was brought out that the society
enters, in its agreements with borrow
ers, into two agreements at once. 1t
lends sum of money at IL per cent
and sells the borrower a bond on time
payments. the bond bearing interest at
1 per cent
Explains Effect of Bonds.
Mr Exnicios said that the per cent
interest on the bond was in actualtty
helping to reduce the interest on the
loan, but Representative Caraway put
himself on record with those who be-
lieve that the society is getting too
much interest
William H. Baldwin, c. C. Tucker and
George Wilson, secretary of the board
of charities. were present, and par
win will make an extensive statement
Tuesday.
Statement Showing Cooperation.
In connection with today's hearing be-
fore the House District committee a
statement was given out showing the CO.
operation between the Society for Savings
and Loans and the corporation counsel
of the District.
To the corporation counsel was sub
mitted a letter giving in detail the meth
DDS of business of the loan company.
showing what interest it charged on loans
and paid on deposits and indicating other
features Of its operations. After giving
study to these details, the corporation
counsel, it is stated, pronounced the
methods to be in accordance with law.
This is shown by the concluding para
graph of the formal letter to the cor
poration counsel. made public today:
"On the 25th ultimo the question Of our
pan was raised by reason of information
submitted to your ONCE practically iden-
tical with the inc1osed. The matter was
thoroughly gone over with yourself and
Mr.. Whiteford. and after several con-
ferences it was the opinion of your Of
fee that we were not violating the law,
and we would still be complying with IT
If we reduced the rate of interest paid
on deposits from 6 per cent to per cent
per annum. This We have accordingly
done, and having gone over the subject
80 thoroughly and repeatedly with you,
we understand that we are now. as we
have always been since taking out the
license, complying with the law. in ac-
cordance with the instructions of your
Office