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THE MONEY-LENDING INQUIRY.…

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THE MONEY-LENDING INQUIRY. ♦ MR. FARROW INTERVIEWED. NEW FORMS OF USURY. Mr. Thomas Farrow, private secretary to Mr. Yerburgh, M.P. for Chester, editor of The Councillor, and author of 'The Money-lender Unmasked,' to whose writings on usury, and activity in exposing the abuses of the money- lending system, is entirely due the appointment of the Select Committee presided over by Mr. T. W. Russell, in an interview with the repre- sentative of a News Agency, on Thursday, communicated some interesting information as to certain phases of the money-lending evil still to be investigated by the House of Commons Committee. Dealing first with the resolutions submitted by the Association of Oldham Money-lenders to Mr. Ascroft, M.P. for Oldham-the member of the Committee whose rough handling of the witness Kirkwood, it will be remembered, led to exciting scenes during the recent inquiry-Mr. Farrow said The proposals are, first, that bills of sale shall be entirely abolished, or attested before the registrar of the local County Court; secondly, that all money-lenders trade in their own names thirdly, that all promissory notes bear on the face of them the amount of money advanced, the interest charged, and the mode of repayment; fourthly, that all loan offices be registered; and, fifthly, that the renewal of loans for short periods be discouraged. These are merely a re-draft of some of the recommendations which I myself placed before the House of Commons Com- mittee at the conclusion of my six days' evidence. In my opinion the reforms there suggested, though excellent in themselves, would be of little value, unless accompanied by the other stringent regulations I sketched out such as the licensing of money-lenders, the pay- ment by them of an annual tax, and something in the nature of a limitation of the rate of interest. The proposals of the Oldham Loan Offices only touch the fringe of the subject, and though I should be sorry to impute motives, it seems to me strange that these money-lenders should have left out of considera- tion reforms which would touch their own pockets. Asked as to the progress made by the money- lending inquiry, Mr. Farrow replied: It was plain to me that at the outset Mr. T. W. Russell and his colleagues could hardly credit the reality of my representations. They seemed to think that I was trying to entertain them with goblin stories, and they rigorously cross-examined me. But as the case developed, and my proofs were submitted, the demeanour of the Committee entirely changed. Without relaxing the rigour of their demand for proofs, many of them have assured me that I have satisfied them on all the points of my indictment. I was at first limited in illustrating my charges against the money- lenders to one individual case on each point. They gave me greater latitude subsequently, but I was still limited-and, perhaps, wisely so, for if I had been allowed perfect freedom I am certain that my evidence would have lasted all the session. I practically only put before the Committee a fiftieth part of my case; but the Committee are satisfied as to the evils, and the only difficulty now is as to how these evils are to be dealt with. The Committee reported progress, and asked to be reappointed. Why do they desire to continue the investigation ?—They consider it necessary to take note of other samples of the money-lender. If you remember, I was asked, I think by Mr. Loyd, to classify the money-lenders. Some of the usurers deal only with clergymen—or make a speciality of the clerical borrower, others deal almost exclusively with workingmen, others with farmers, and so on. I have a list of upwards of 500 usurers, against everyone of whom I have cases-sometimes scores of cases- and I shall, perhaps, best answer your question by taking out one of these at random. Here is a man who has had many victims (pointing out a name on the list). He deals exclusively with professional men, such as clergymen and doctors. We have not touched his case yet, but he will doubtless be called early next session, when even more startling evidence than that elicited in the cross-examination of John Kirkwood may be looked for. Again, the committee will require to investigate the abuses of the money-lending system as they affect the working-classes. There are a large number of money-lenders who lend simply to working-people in amounts ranging from Is. to 5s., and they sometimes bring cruel pressure to bear on their victims. When the borrower is in arrear, and enormous interest has accumu- lated, they apply for payment at the address of the borrower's employer, and county court sum- monses are served at that address. This is a species of blackmailing, and often, of course, results in the dismissal of the borrower from his employment. Then the gombeen system has to be investigated-or what the Irish call the shopkeeper turned usurer.' In this case the gombeen man' makes loans in kind instead of in actual money. He supplies poor farmers with stock and seed and manure, and agricul- tural implements and machinery, and farmers and others he supplies with bags of meal and all household commodities. These things he gives out on credit, bargaining for an enormous interest. The result of this is to fasten a mill- stone round the neck of the borrower, and to enable the gombeen man' very frequently to step into possession of the farm or other property. These people amass large fortunes, and amass them very quickly. Mr. T. W. Russell declared during the proceedings of the committee that this iniquitous system requires investigating. Those who are familiar with its operation and effects—such men, for instance as Father Finlay, president of the Universitv College, Dublin-denounce it as a social danger and a grave public scandal You will have seen it announced that Mr. Ascroft is already engaged in investi- gating the system in the West of Ireland, his present resting-place being the Imperial Hotel, Ballina, co. Mayo, while, in accordance with the desire expressed to me by the chairman of the committee during my examination, I shall myself spend a month or two in Ireland making inquiries later on- that is to say, before the committee again meets. Another usurious and singularly demoral- ising system which is necessary should be inquired into is that carried on by some employers of labour, particularly in the Black Country. From inquiries I have recently set on foot, it appears that the proprietors of a large number of iron and tin-plate works and their foremen carry on a system of money- lending which equals, if it does not excel, in iniquity the practices adopted by the pro- fessional usurers which I have exposed. It is worse, in so far as these employers of labour practically compel employes to borrow money under pain of dismissal, whereas ordinary money-lenders merely induce people to avail themselves of their financial aid. This system of money-lending and oppression to which I refer may be thus generally described: The workman who is usually employed upon piece- work, is asked by the foreman (often a relative of the head of the firm) whether he wants to borrow 5s. or 10s. for a week or so at the ordinary rate of interest, namely, 5s. in the £ per week-or 1300 per cent. per annum If the workman replies that he does not require the money, he is plainly told that he must leave the firm upon the completion of his job, the formula used being somewhat after this fashion You do not encourage me, therefore, I shall not encourage you." If the workman happens to possess exceptional knowledge of his trade he receives 14 days' notice, during which time it is hoped that he will submit to the inevitable and place himself under the yoke. It frequently happens under this process that men having no need of money borrow it and pay ruinous interest in order to retain their employment. Some sturdy men, however, refuse to yield to the request-or rather, command-made to them and become workless workers. But they find it useless to complain; the system is general in the Black Country, and they have no remedy. It frequently 'happens' that the employers, and their managers and relatives, carry on the trade of publicans, grocers, bakers, -bootmakers, &c., in the vicinity of their | works-in some cases the entrance to the works is through the public-house or shop. The workmen are expected to buy the whole of their provisions, beer, boots, &c., at these establishments. The names of any delinquents are noted down, and dismissal from employment speedily ensues. On pay days employes—men and women-are expected to spend some hours in the public- house recognised by their particular firm, and woe betide those who may be caught drinking at the bar of any other tavern. On this occasion I refrain from giving names, but I am prepared at any time, if necessary, to give the addresses of at least 14 firms, with the names of the foremen, and other details of a more or less interesting character. I know of cases in which the son of the head of the firm is foreman and I money lender,' and other relatives are beer seller, tea dealer, and grocer, the employes are paid at sweating prices, and the evil of underpaid labour is increased by an enforced reduction (through the money lender) of 5s. in the R. It is further intensified by the unwritten but inexorable law that the balance of wages shall be spent at the public- house, or at the grocery, tea, clothing, or other establishments conducted by relations or friends of the manufacturers. I am familiar with cases in which workmen are shifted from one class of work to another, according to the amount of encouragement' given to the firm in the taking up of loans, or in the amount spent in the public-house-cases in which a premium is put upon drunkenness and improvidence. But, will the terms of the reference to the Select Committee enable Mr. T. W. Russell and his colleagues to investigate this form of usury ? I do not think they will. The reference says, to inquire into the alleged evils attending money-lending transactions at high rates of interest or under oppressive conditions as to repayment, between the poorer classes and the professional money-lenders,' and as these words do not cover loans in kind they hardy seem to include either the gombeen or the Black Country system. On this point, however, I may say that when the Committee is reappointed at the commencement of next session its scope will, in all likelihood, be enlarged. An effort will be made to secure such extension, and I have some reason to believe that it will not be un- succesful. There are several other subjects with which the Committee have not dealt, such as the evasion of the Bills of Sale Act, the abuse of hire and purchase agreements, of authority gives by clerks to draw their salaries, of garnishee orders, or the attachment of salaries by process of the Court, and so forth. What in your view is likely to be the result of the inquiry ?—Well, the Committee will have other money-lenders before it, in addition to those already called, and further investiga- tion will shew that these men are types of a system which is sufficiently general and fraught with such evil to the community as to justify drastic legislation. The difficulty in arriving at the facts has been that part of the essence of the transaction between the money-lender and his victim has been secrecy. Borrowers have been content to endure any amount of extortion rather than complain publicly not one case in a thousand comes into Court, and no one imagined the extent of the evil until I managed to get to the bottom of it. I am happy to think that one effect of the inquiry so far has been a large falling off in the business of the money-lenders. Peoples' eyes have been opened to the evils of the system, and now would-be borrowers look with suspicion upon almost every money lender. In evidence of the wariness of the public I may tell you that I receive an enormous number of letters daily from people who wish to be recom- mended to an honest money-lender. Many money-lenders to my certain knowledge have recently retired from business. I have observed, too, as another result of the late disclosures, that county court judges now shew less hesitancy in using the discretion with which they are doubtless endowed, so as to make exorbitant rates of interest payable over lengthened periods. They now seem to realise that they will be supported by public opinion, and by the legislature, in such a course. So far as any probable legislative effect of the inquiry is concerned, it is within my knowledge that several members of the Government have already expressed their surprise at the strength of my case, while, in particular, one right hon. gentleman, who may be described as an advanced member of the ministry, has in effect declared that the evils exposed are of so glaring a nature that the hands of the Govern- ment are not free-they will be compelled at an early date to introduce remedial measures.' I have always thought that the importance of the subject would have warranted an inquiry by a Royal Commission, when Assistant Commissioners could have been appointed to take evidence away from London-in Ireland, for instance-in which case money could have been expended in obtaining information as in the case of the Agricultural and Labour Com- mittees. I know of no question which more closely affects the interests of the farming and industrial working-classes of the country, and it is this kind of subject which the Government of the day do well to take up. There are other subjects somewhat akin to this, such as the abuse of the hire-furnishing system, the lending of money by building societies, and the abuses connected with the, so-called, Provi- dent Associations, but, so far as I am concerned, although I have gathered a considerable amount of data on all these matters, I have no desire to be regarded as a social meddler or emissary of Scotland Yard, and, therefore, I am concentrating my attention upon the abuses of the money-lending system, which I regard as the greatest social evil of all. At any rate, I wish to see the matter finally adjusted-as I hope it will be in the ensuing session of Parliament-before I move in con- nection with any other subject. I should point out in connection with the proposed extension of the reference to the Select Committee that a subject well worthy of investigation is the action taken in foreign countries in regard to this class of usury. Signor Vollenborg, in Italy, first investigated and exposed the evils of the system-as we are now doing it in this country, and owing to his initia- tive there have been established in Italy many Co-operative Credit Societies for rural districts, and People's Banks in towns. The result has been that the usurers have had to pack up their traps and clear away from the scenes of their operations. Districts formerly infested with usurers are now entirely free from them. The same may be said of Germany, where Father' Raiffeisen first established the system of credit societies which are known by his name, and which our own English society has closely fol- lowed. Further, in other parts of the Continent the State or the municipality becomes the money-lender. We have seen how safely money can be advanced to the industrial classes, in the success which has attended the granting of loans to individuals in the West of Ireland, for the supply of boats and fishing gear. Well, there is some X96,000,000 deposited in the Post Office Savings Bank, for which the Govern- ment pay 2 per cent. Why should not they advance some of that to such honest folk as are in need of temporary financial assistance, say at 5 per cent., 10 per cent., or some other per- centage that will pay? I had intended to deal with these questions in my evidence, but, after mature consideration, I elected to confine myself strictly to the terms of reference to the Committee. You make many enemies, Mr. Farrow; surely you must lead a sort of charmed life to escape their vengeance ?-Well, yes; mine is a some- what difficult position. I own I have had many threatening letters, and, in the early days, like Mr. Toots, I cultivated the com- panionship of a man of muscle. I wrote my first book on money-lending in the country, whither I was accompanied by this gentleman. I have been shadowed' by many queer-looking people, and I am ever on my guard. Mr. Kirkwood's attitude towards me in the witness chair is a good indication of the thoroughness with which I am hated in certain quarters.

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