10 JULY 1897, Page 16


SIR,—I am glad to see in your last issue a much-needed suggestion that free-trade in money-lending would be a benefit to borrowers. In 1854, under the reign of the £10 householder, bills of sale were first brought under statutory regulation and required to be filed. This was done primarily in the interest of the lender, enabling him to see that no prior advance had been made on the goods, and of the trading classes, that they might not be misled into giving credit on the strength of a customer owning furniture, &c. From 1854, for some twenty years, my recollection, which, I believe, would be borne out by inquiring of other solicitors and by inspection of registered bills of sale, is that money was in the habit of being lent on these securities at moderate rates of interest', say, 6 to 10 per cent., when the rate of interest on mort- gages of land and houses was 4 to 5 per cent. Moreover,, solicitors and other persons of good position were willing to help friends and clients when in need by loans upon bills of sale. From 1878 onwards Acts of Parliament have been passed fall of well-meant provisions for the intended protec=. tion of borrowers fortified by avoidance of bills of sale in. which any one of these provisions has been neglected.

The result has been most unfortunate to the borrowers; No solicitor of good position will now venture to lend his, own or his clients' money on such risky securities; when a solicitor is appealed to by some person in dire need of temporary aid, and possessed of furniture of ample value, he can only regretfully refer him or her to those who make business of such loans, and indemnify themselves against legal risks by charging a high rate of interest. The minimum interest charged by the most respectable of such persons is, I believe, about 15 per cent. per annum, besides expenses of valuation. We have, then, the anomaly that notwithstanding the present plethora of money and fall in the rate of interest, borrowers upon security of furniture, &c., have to pay a higher rate than before, and I venture to think that our recent well-meant, but ill-considered, legislation is alone answerable for this result. Besides abandoning the present stringent provisions, I would, on behalf of borrowers, suggest that the publication of their names, extracted from the "Register of Bills of Sale," is a hardship to which they should not be exposed; it causes immediate loss of credit, and often bank- ruptcy. Why should more publicity be attached to a mort- gage of chattels than to a mortgage of land am, Sir, &c.,

-K. C.