Evening star., 1915-05-22
Those Coming Under Release
Agreement" to Be Sifted by
Corporation Counsel.
BORROWERS AGREE TO PAY
BACK USURIOUs INTEREST
Suspended Sentences Under Agree
ment Of March 80, 1914, May Be
Put Into Execution.

A report on each individual loan
made by loan companies since the
loan shark' law became effective in
the District Of Columbia is to be made
to Corporation Counsel Syme by the
police. Although tho report has not
been completed. it is understood that
there have been made about 2,100 loans.
and that of this number seventy-four
have been made with a release agree
ment." That means that seventy-four
persons are known to have borrowed
money from loan companies at s per
cent year. and at the same time
signed notes to pay back to the loan
companies usurious interest which had
oeen previously Cancelled by the
operation of the '1oan shark" law.
The seventy-four loans with this re.
lease agreement will be Investigated
me situation concerning them Is a.
March 80. 1914. the corporation coun.
sefs office held conference with ff.
teen loan companies then doing bust.
ness IN washington. Tho result of the
conference was the signing of a pape,
now known as "the stipulation" The
loan companies all agreed to plead
guilty to two charges Of exceeding the
lawful rate of interest On ono charge
tney were to accept, each, a fine Of
$l00; on the second charge they were
70 accept thirty day sentence and q
hne: Then the stipulation provides:
The execution of which said sen.
tence passed in the cause last above
mentioned having been by tho cour'
then and there suspended"
Jail Sentence Pending.
The loan companies. therefore, PAID
hne Of 500 each and have hanging
over their managers a thirty day jail
sentence in case any further violations
OF the loan shark" law shall be shown
Now, the stipulation under which tn.
loan companies were allowed to es.
! cape further punishment at the time
was:
That the defendant loan companie.
VIII return to all borrowers making
application therefor through the ONCE
of the corporation counsel of the Dis.
trict of Columbia all interest charged
and paid by the borrowers on all loan.
made and paid since March 6, 1913"
There was a further proviso thai
nothing tn the stipulation should pre-.
vent any loan company from receiv.
ing from any borrower such interest,"
as said borrower may be willing to al
low the said company for the use of tn.
money which was loaned to him by
said company"
To Settle for Three-Fourths.
Further. the stipulation provided thai
on all loans made since March s, 1913
which had not been paid in full by the
borrower. the companies agreed to set.
tie by accepting an amount equal tt
three-fourths OF the actual amour,
loaned to the borrower.
The seventy-four cases, which will
be examined thoroughly. owe their ex-
istence solely to the clause in the stip-
ulation which allows the loan compa-
MES to get all the borrower Is willing
to give. After that stipulation was
signed many companies stayed in bus
mess for the sole purpose OF doing
business at 6 per cent. without q IL
cense, in order to get as much of that
old usury back as possible. AS has
been explained. a borrower who had
profited under the repayment to him on
the three-fourths plan, would ask for a
new loan. He would get 1t at per
cent, but had to sign also notes for the
money which the company had refund
ed under the agreement.
If it has been found that any OF these
seventy-four loans have been made
under compulsion to sign notes for the
old usury. it is possible the corporation
counsel will exercise his power to put
into execution the suspended sentences.
There is no promise, however. on this
point.