They gave the working classes facilities for running into
debt, and for mortgaging their future industry. A few men, desirous of
making money, would form themselves into a Loan Club, and offer sums of
money ostensibly at five per cent, interest, repayable in weekly
instalments. The labouring people eagerly availed themselves of the
facility for getting into debt. One wanted money for a "spree," another
wanted money for a suit of clothes, a third for an eight-day clock, and
so on; and instead of saving the money beforehand, they preferred
getting the money from the Club, keeping themselves in difficulties and
poverty until the debt was paid off. Such a practice is worse than
living from hand to mouth: it is living upon one's own vitals.
It is easy to understand how the partners in the Loan Club made money.
Suppose that they advanced ten pounds for three months at five per cent.
It is repayable in weekly instalments at ten shillings a week,--the
repayments commencing the very first week after the advance has been
made. But though ten shillings are repaid weekly until the debt is wiped
off, interest at five per cent, is charged upon the whole amount until
the last instalment is paid off. So that, though the nominal interest is
five per cent., it goes on increasing until, during the last week, it
reaches the enormous rate of one hundred per cent.
Pages:
339
340
341
342
343
344
345
346
347
348
349
350
351
352
353
354
355
356
357
358
359
360
361
362
363