MONEYLENDERS

Greymouth Evening Star, 26 March 1925, Page 8

MONEYLENDERS

HOW VICTIMS ARE ENMESHED. It is announced (says a “Sunday Chronicle” writer) that Lord Carson is to draft and introduce, early next session, a Bill dealing with the practice of money-lending. The public should wish it well, for in spite of the legislation of 1900 and 1911, the manner in which the business is carried on remains a noxious scandal, with more than a flavour of blackmail about it, as well as a pungent odour of corruption. Tire matter , will be in good hands. In the course of L 01& Cdrson’s enormous practice at' the Bar, which was largely concerned' with cases of a “business” character, he must have gained a rich experience of shady financial dealings. Any moneylender will assure you that

his ow nbusiness is a perfectly honourable and decent one. This article is written about those whose business could not be so described. The two main counts in the indictment against these pests refer,. to — (1) Their methods of 'securing business; and (2) The cruel and cowardly extortion which is practised upon those who find as do thousands of borrowers every year, that to get out of a money difficulty they have landed themselves in another immeasurably worse. There can be few of us nowadays who have never seen a moneylender’s touting letter. If you do not receive them occasionally, you know people who do. Those- who belong to certain large the community are pestered with them continually. There are people in such -a position, professionally> or socially, who know that the law, if apealed to by a moneylender, will not uphold a really extortionate claim ; but they will usually pay through the nose, and often go on so paying for life, rather than allow the transaction

to be brought into court. . Apart from these classes, there is the great mass of persons of all classes to whom it happens that they are temporarily in need of money. Somehow—it is often impossible for the victim to imagine how—a moneylender of whom he has never heard gets wind of his difficulty. He receives the usual.plausiblqjnvitation to borrow at “a'fair rate of interest.” How do a man’s private circumstances come to the knowledge of the moneylenders? Here, we touch one of the central difficulties. There is no doubt at all that; a system of secret information exists. It is more than' suspected that it is based on the bribery of persons in the positions of trust. • A man known to myself, for instance, borrowed a sum of money, not at interest, from a relative. He had never received a moneylender’s letter up to that time. He has received moneylenders’ letters at short intervals ever since. The only reasonable explanation is that-, either in his own bank or in .his relative’s, the passage at the cheque . was noted, the nature of the payment guessed and information conveyed to a moneylender. There are others' besides those em-ployed-in banks wlio arp privy to facts such as moneylenders would find use-

ful —income tax officials, lawyers’ clerks, tradesmen whose bills have not been paid, and so forth. - Nor need it be assumed that actual money changes hands when information is on. Any of these people may be, and frequently are, themselves in the hands of moneylenders, and may be tempted by a remission of payments due from them. . The problem of breaking up such a secret system as this is perhaps insoluble. What, then, of the prevention of extortionate treatment The law as it stands has a sound appearance. All moneylenders must be registered; and though .they may, and usually do, trade under names which look 'better than their real ones, the real names must be printed on their letter paper. t But the great security for the bor- * rower is that, if he is sued for the recovery of a moneylender’s debt, the courts have power to consider whether there has (been harshness, to reopen the transaction, and to award no more than what is thought reasonable—which may be nothing at all. But there are two classes of people to whom this class of protection is of little value. There are those who are ignorant of the law; and there are those, already mentioned, who cannot afford to be brought into court, even though it should result in a drastic reduction of their indebtedness. The ignorant are very many. Not long ago a poor man, being at his wits’ end, sought advice from*"one of the Metropolitan magistrates. Jle had origirially borrowed 30s. He had failed to- pay regularity. In the course of years he had paid nearly £2O, and he still owede the moneylender aobut £l2. The magistrate advised him to refuse to pay another farthing, and let the moneylender sue him if he dared.

But suppose that he is one of those ■ who cannot face the exposure of legal proceedings. How many of them at this moment are living in misery and hopelessness, weighed down with growing debt, after having paid in interest more, perhaps much more, than the amount of the original loan! How many have been driven to dishonesty, to drink, to suicide; how many have left their families penniless ! Most of such victims have shown imprudence and weakness, no doubt. But it is against public policy that such weakness should be exploited by those who are sufficiently greedy, heartless, and unscrupulous so to put the screw upon' their fellow-creatures. It has been proposed that moneylenders’ touting letters and advertisements should be prohibited, that the people who really desire to get into the hands of a moneylender should be left to find their own way thither, and that those who are weak enough to be persuaded into borrowing on moneylenders’ terms should be*protected. It has been proposed that personal tout-

ing on commission for moneylenders (which is said to be especially rife in the Civil Service) should be made illegal. As for the prevention of extortionate treatment, the difficulty is great, because of the secrecy’’which, for so many borrowers, is vital. It might be possible to frame a standard contract which would rule out the worst features of money-lending practice, and forbid lenders and borrowers, under legal penalties, to enter into any other. Wo may take it, at any rate, that Lord Carson sees his way to the drafting of practical and effective measures for the control of the money-lending business. Should he secure their passage into law, he will take rank among the greatest social benefactors of his time.