Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1915-05-14
GOVERNOR FINALLY APPROVES
RECENT ACT OF LEGIs.
LAruRE.
AT FIRST DISPOSED
TO VETO MEASURE
Says eilI Can Not Be Considered az
Lesalixins Exaetion Of 2 Per Cent
Per Meneh-Goeernor Admits Chat
tel Loans Are Risky and Attended
With Freqeunt Losses to Lenders.
Special to Times-Rapublican.

Special to Times-Rapublican.
Des Moines, May 14-Governor Clarke
in signing the loan shark bill which
had been in his hands since the legisla-
ture closed made the following ex-
PLANTATION:
1T was my first impression that the
bill known as the loan shark bill
should be vetoed. After studying the
bill and considering some legal ques-
tions raised by it, l reached the con-
clusion that it should be approved.
The law OF this state provides a
legal rate of interest, per cent, and
that contracts may be made for
greater rate. per cent, and it has al
ways provided for certain penalties to
follow the taking of usurious interest.
The taking OF interest beyond these
rates is not permitted to any persons.
This bill provides that this shall con-
tinue to be the law, because it says
E nothing herein contained shall be con-
lstrued as authorizing a higher rate Of
S.interest than Is now provided by law"
The forfeiture provided for taking
more is to continue as heretofore.
THE bill can not be taken to mean
the authorization or the legalizing of
2. per cent month. Whoever eXacts
it is still liable to the forfeiture that
attends usury. The bill is aimed at
great evil. Many loan sharks exact
{: very great deal more than 2 per cent
month. The bill in order to stop 1T
makes the exaction Of more than per
cent month a crime punishable by
fine or imprisonment. 1 find that the
=. IL - 1A to- $,,~r11
petent to do this. Whoever takes more
than 2 per cent month, directly or
indirectly, by means Of commissions or
Z brokerage charges, or otherwise" falls
under the condemnation of this bill.
The supreme court Of Missouri con-
STRUNG an exactly similar statute held
that these words mean that the statute
should apply to every person who ex-
acts usurious interest of more than 2
per cent month directly and also by
means Of commissions, brokerage or
otherwise, whether by methods similar
{ to those enumerated or not Those who
exact less than the per cent month
. but more than the contract rate Of 8
per cent, permitted by the law, are still
condemned as Insurers and subject to
the forfeiture provided by the law.
chatteI Loans Risky.
Literature upon the subject which I
have examined shows that a short time
small loan business on chattel mortgage
security, when losses and the usual ac-
companying features OF the business
are taken into consid GRAFTON, can not
be conducted upon less than 2 per
cent per month basis. In 1910 bill
was brought before congress which pro-
vided that licensed money-lenders in
the District Of Columbia, under GER
tain restrictions might charge per
cent q month on a loan Of less than
$780, This bill was afterward amend
ed, passed and signed by President
Taft, the rate reduced to l per cent a
month. Those sincerely interested In
establishing remedial loan societies to
meet the demand for small loans to de-
serving people, give it as settled con-
viction, having this bill in mind, that
no loan concern can operate on that
basis and this, therefore. I take 1t, is
the reason why the bill under consider
alton fixes the limit at per cent. The
establishing Of societies for making
such loans as fair and reasonable rates
is the only remedy for the relief Of
those who are made the victims Of the
sharks. With the approval Of this bill
no moro than 2 per cent a month can
be taken in Iowa without danger of fine
or Imprisonment and that such can
not be taken without danger OF the