The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1914-01-21
Wednesday, Jan. FL. 1914.
THE LOAN
SHARK.

People in small towns and rura
sections know little Of the ravages o
the loan-shark in larger cities. The
ordinary pawn broker that some few
are familiar with, is the nearest ap
proach to the loan-shark perhaps o.
this State.
1t is a pretty we'll established prin
ciple that if a man owes for fifty pei
cent. of his gross holdings he is or
dangerous ground. To pay eigh'
per cent. on such sum and reduce hi:
debt annually will tax the strength
and endurance of a man in full pos
session of all his mental facilities ant
physical powers.
Again, it is a we'll established prin
ciple that the man who needs credi'
most finds it most difficult to secure
loans and is charged the highest rate
of interest.
When these conditions prevail ir
ordinary banking, imagine how they
are multiplied fourfold as the scale
descends to the really poor, in large
cities. Ten per cent. per month j:
considered a low rate of interest by
the loan-shark, and people in the ex'
tremity of their poverty not infre
quently pawn the very clothes from
their bodies to get bread. Wage
! earners on small wages, falling be
hind each month frequently hypoth
ecate their months wages with per
sonal articles to secure their daily
bread.
The loan-shark preys on the mos
helpless and wretched of the human
family, and heretofore there seems tt
have been no lawful way to check
his ravages.
A movement is now on foot, engi'
neered by. one Rosenwald, head OF
the firm of Sears, Roebuck and Com.
pany that will eventually pull thu
loan-shark's teeth. y
Mr.. Rosenwald proposes to estab-
lish a bank in Chicago with a capita
of several hundred thousand dollars.
having the express purpose of max
ing loans so trifing as not to appea
to the. regular banker. For security
for such loans it is intended to take
the endorsement Of fellow laborers.
and the rate of interest is to be eX-
.ceedingly low. This Chicago bank il
to be only one of a complete chain OF
banks contemplated, that will have
an aggregate capital of more thar.
five million dollars. 1t is the pur
pose of the promoters to extend the
workings Of these banks to take il
even the small tradesman and the
small farmer.
1t would seem on its face that such ;
bank could notlong exist; and unques.
tionably philanthropy is the moving
spirit; but the "New York Com,
mercial," "a paper competent to speak
in such matters says: "The men who
are promulgating the small loan idts
are graduates and post graduates Of
the school of finance" In the same
vein of confidence do other promi'
nent commercial journals. speak OF
the enterprise. And then, too, il
may not be expected that because
the purpose of this movement is phi
l%anthropic the working of the sys.
tenn will be without business method
The entire financial system rests on
confidence, in large measure, and the
personnel of the man boz rowing doe
or should play a part in every loan.
The proportion of honest men in
small things and of little financial ca,
pacity is as large as in big business
and dead beats will find no warmel
reception in the small loan bank than
in existing establishments.
In any event, the spifit actuating
the small loan bank promoters is in.
dicative of a broader philanthropy
than has heretofore characterized
capital. 1t is seen again in the divis'
ion of profits with employees by
the Ford machine manufacturers
Perhaps after all the war between la
Dor and capital will be discontinued
by a more thorough understanding
of conditions affecting each.