Democratic Sentinel, Volume 19, Number 36, Rensselaer, Jasper County, 13 September 1895 — High Rates of Interest. [ARTICLE]

High Rates of Interest.

Many governments in good credit can borrow money at 3 per cent, or even less. When security cannot be given, or when credit is not good, the rate exacted of private borrowers is much higher. A case has been found in London where interest was paid on short loans at a rate which would amount to five"thousand two hundred per cent a year. A Mr. Moon, who has contributed an article on the subject to an English review, has made a personal investigation* of the matter among the pawnbrokers of Whitechapel, London. These men and women are regarded by the wretchedly poor people about them as philanthropists rather than usurers. An act of Parliament permits these pawnbrokers to collect on all loans of two shillings or less an interest of at least half-penny a month. This appears very reasonable to the poor people of Whitechapel; but many loans of sixpence are made, and as in the case of sixpence loans no time longer than a wA>k is ever given for payment, and as the half-penny is always collected the same as for a month, the rate on these little loans amounts to what would be equal to four hundred per cent, a year. But the way in which this sort of usury may be carried- very much fur-, ther is described in Mr. Moon’s narration. A pawnbroker-said to him: “There’s things here, sir, that don’t stay here not a day. Last winter a woman brought me In one evening a child’s pair of shoes, and I lent her a sixpence on them. “Next morning very early in she comes, sir, with a bed coverlet. It must have just come off the bed, for it was as warm as could be to the hands. I lent her sixpence on it, and with that sixpence and a half-penny That she brought with her, she took the child's shoes out of pawn and went away with them. “ ‘Now then,’ says she, 'un can go to school.’ “And in the evening back she comes again with the child’s shoes once more, and puts ’em up for sixpence, and gets the coverlet and pays her half-penny on that, and goes away with that to sleep under for the night. “And that she kept up, sir, day after day and night after night, until the mild weather came again, and a coverlet on a bed wasn’t no longer necessary.” This woman was really paying interest, therefore, at the rate of a hundred per cent, a week, or fifty-two hundred per cent, a year.