Evening star., 1952-05-15

AAlo1CoN1AlS III oli1o NooC, WV AAAS
District does have paWnshops, but
they're not called pawnshops.
Only one describes itself forth
rightly as a paWnshop. More
about it later.
For readers unacquainted with
Washington's quaint hook laws,
let's go back to see what changed
the name of the places displaying
the three gilt globes.
In 1911 Congress had a noun
tain of complaints about usurers.
After considerable prodding the
lawmakers investigated. Senators
who looked into the matter re-
ported "a most remarkable con-
dition of affairs in the city of
Washington"
Usury was commonplace. Some
small-loan places operated de-
Gently. But others - including
many pawnshops-were run by as
vile a pack of Shylocks as ever
skinned a lamb. They were epic
knaves, preying on the timid and
the borrower who was unlettered
in things legal.
Medicine Loan at IA Pet.
One case involved a mother
whose daughter was grievously i'll.
The woman borrowed $100 of a
lender whose heart must have
been a bag of dirt. He charged
her IA per cent interest on the
medicine loan.
Other sharks were even greedier.
One hooked a young Government
clerk for 375 per cent interest.
Those examples were not ex-
traordinary, but routine. Congress
agreed there ought to be law "
1t took two years to pass one.
The 1918 loan shark law-its
true name-had teeth in it that
bit money-lenders in their bill
fold.
Interest rates were lowered so
much that lenders either got out
of business or got out of the Dis
trict. Some retreated across the
District line to resume operations
in Maryland and Virginia, where
the codes are more tolerant.
One enterprising pawnbroker
stayed here a while but the courts
caught up with him.
Trip Over the Line.
A customer would call at his
shop with, say, a diamond ring.
1t was illegal to take it at any sort
of profitable rate, but it wasn't
illegal to be paWnbroker in
Maryland or Virginia. The pawn
broker would hail a car from his
personal fleet and have an en-
ploye motor the client over the
District boundary. Once across,
the employe would bind the GUS
toner to a contract and then
bring him back into the District,
take his ring. give him the money
and send him on his way.
An indignant judge ruled that
this was a barefaced device to
cheat the law. The sharpie had
to stop it.
Brokers eventually found a ruse
to do business here, free Of the
Irritating interest ceilings. They
set up pawnbroker exchanges.
These exist today and are strictly
legal.
A visitor to one of the exchanges
will sell his radio or ring or what
ever it is. On paper, it is a final
sale. When the money changes
hands the item becomes the prop
erty of the broker. The visitor
signs a bill of sale instead of
himself receiving a receipt for
deposited property.
Both parties, however, under
stand that the customer may re-
turn and buy it back again-at a
higher sum, naturally.
Must Delay Sale.
Just as regular pawnshops are
required to do elsewhere, District
Exchanges must hold on to the
| item for specified times. That
provision helps not only the man
who wants to buy it back later,
but also helps the police pawn
squad. All firms dealing in Sec
ond-hand goods must furnish po-
lice with a record of their second
hand purchases. The lists have
put the finger on thieves who
Ipeddle loot in paWnshops.
The lists are submitted by all
the Districts holders of second
hand permits.
The one place in the District
that calls itself a regular pawn
shop is Livingston & Co., 1923 H
street NV.
It's license is not specifically
labeled as a pawnbroker permit
but the firm refers to its business
as pawnbroking and so do the
license people and the police.
Bernard Livingston. the owner
is licensed to deal in secondhand
merchandise. and as a money.
ilenoer. The latter permit costs
$500 year and allows him to leno
money at l per cent a month in
Iterest.
Twelve per cent a year sounds
Ipretty high. It isn't, though. Not
flor pawnbroking. Where pawn
|shops are permitted to operate il
1.-THE open, they are granted high
Ter rate than statutes allow or
other types of loans.
No Similar License.
| Authorities agree hockshop.
lneed these elevated rates. A bank
| Il