The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-01-03
RICH men TO OPEN
CHAIN OF LOAN BANKS
WOrkimgnen Can Borrow on
Character aud Keep Out
Of sharks Hands.
DIR. +. r. L. GOULD At HEAD
Carnegie, AstOr and ROsenwald
Said TO BE Backing 3d.
100000 Venture.
DIR. +. r. L. GOULD AT HEAD

\ system OF industrial loan banks on
a scale much larger than has ever before
! been attempted In this country will begin
operations in New York and elsewhere
the last OF this month or early In Feb
ruary.
Andrew Carnegie and Vincent Aston
are said to he interested in the project
which is under the direction OF Or. Elgin
II. l.. Gould. president Of the City and
Suburban Homes Company and associated
with many phianthropic enterprises.
! julius Rosenwaid. president Of Sears.
Roebuck & Co. Of Chicago. is among
those most actively interested In the move
mcnt which has for Its purpose the
| elimination OF the loan shark ny enabling
workingmen to get small loans without
security other tnan good character.
While the scheme Is philanthropic IN
! its nature DIR. Gould said yesterday that
! II was to h. undertaken only after ex
! perimcnts had convinced the organizers
that II would pay it's own way and be in
no sense u charity.
Silent on Details.
DIR. Gould refused yesterday to give
many details of the plan for the chain Of
banks. saying that full, information would
be made public in the latter part Of the
month. when the system was ready TO
begin work. He said that many OF the
statements contained IN n cablcd inter-
view with Mr.. Rosenwsld In Berlin were
! Inaccurate. but he refused to correct them
in detail at present
| According to the Interview with Mr..
Rosenwald the Inspiration for the idea
came from tn. Italian Minister OF Fl
| nance. Luzzattt. who founded In Italy
successful chain OF banks which lend
money to workingmcn in sums as small
as SIC on character security.
br. Gould said. however. that the
system which IN to Ice used here II not
that in use in any foreign country. AL
though the systems OF credit on character
collateral have been studied and certain
details chosen for adaptation to local con
ditions.
MIR Rosenwald is quoted as saying that
the first of the chain Of banks will he
opened in Chicago with n capital Of
several hundred thousand dollars and that
the aggregate capital will be In the neigh
bOrhOod of 100000
small Loans n Feature.
He explained that the industrial loan
banks would lend small amounts with
which none of the ordianry banks would
bother and to work,ngmen and small
tradesnen whose means were too small
to give then standing as borrowers. The
only collateral IN to be good character
) and the Endorsement of II fellow worker.
a feature OF the business. IL Is said,
will be- the issuing OF certificates in small
denominations purchasable ON weekly or
monthly payments and bearing per cent
interest. The certificates will he redeem-
able on demand and are planned to EN-
courage saving
II is understood, and Dr. could partly
confirmed this, that stockholders IN the
enterprise will be limited to "a per
cent. on their investment and that the
rate OF interest charged to borrowers will
be reduced In proportion as the profits
exceed per cent. on the invested capital
! DR.. Gould would not reveal the names
OF his associates. The plan he said WAS
, intended not only as IL death blow to
the loan shark but as n rcturdant to
socialism.
| BLOW 10 Socialism.
by uniting business and philanthropy"
he said, I'VE will create an agent to
fight socialism. This is not in any sense
IL charity. We merely ask that the
speculative pront be disregarded for the
purposes of our project. There Is any
amount Of right feeling among the
wealthy people of New York when the
idea Ii sound,
In that too much In done in the name
OF charity and that we are In danger OF
becoming bankrupt in self-rcspect"
In illustrating the working of the sys-
tenn Dr. Gould supposed the case of a
laboring man, of steady habits. Eho had
a death In his family after the Expenses
incident to a long Illness had exhausted
his savings. Such n man, he said could
on the recommendation of his fellows
obtain a loan which he would repay In
small instalments
AT present" he said. "such a man
with no collateral to offer falls into the
hands of the loan shark or Is forced to
pawn his personal belongings and those
Of his family with the resulting hardship
and loss of self-respcct."
Not an Experiment.
Il Dr. Gould would not discuss the
amount of capital promised for the en-
terprise, but he did say that the plan
had already been tried out on small
scale, 10 that the inauguration OF the
chain would not be experimental and that
the backing WAS practically unlimited.
"Well, they are men II would be natural
to suppose would be interested. When the
names Of those associated with the en-
terprise arc made public. you will recog
MAE that they are all OF the right sort"
The experiments on which the larger
| vvI1s ts.i Ast