LOAN SOCIETIES OF LONDON.

IF it be true that "he that goes a-borrowing goes a-sorrowing," there is a good deal of sorrowing in London ; for, in addition to private lending and to charitable funds, there are about seventy so- cieties in the Metropolis, which by loans to the necessitous main- tain the expenses of their officers and offices, besides yielding a profit on the capital advanced. It may be assumed too, without much fear of incorrectness, that these necessitous are generally of the humblest class, from the regulations of the societies and the limited sums the majority advance to their customers. The person who wishes to gain by a short cut an idea of the working of this system in its fullest extent, may procure the Guide to nearly One Hundred Loan Societies, containing the prospectuses or ad- vertisements of each ; but as the majority of our readers may be satisfied with a glimpse of the curious and not over-solvent state of things which these societies open up, we will give a general notion of their regulations, their business, and their modes of conduct-

ing it.

These Loan Societies increased considerably, if they did not al- together originate, with the modification of the Usury-laws as ap- plied to bills of exchange, and the Loan Act of WILLIAM the Fourth, receiving a stimulus from the 1st VICTORIA, which gave them a still more regular existence. The greater part of the societies thus called into being are anonymous as regards the pub- lic, no names of the proprietors and managers appearing ; and in the few cases where names are appended, they are only those of the Secretary or other officer. Their transactions are confined between Si. and 15/.; and the nominal interest which they de- mand varies from 5 to 10 per cent. : but as this interest, what- ever it be, is stopped out of the loan, and as this loan is repaid by weekly instalments, the real rate of interest is increased by at least another 5 per cent. All the societies make certain charges of mileage, being a fee for inquiring into the responsibility of the securities, and, as the lawyers' bills have it, " attending to sign": most of them charge for books of the rules of the institution, which charge varies from 6d. to is. 4d. or upwards, as well as some pence for the printed form on which the borrower makes his application : some societies charge a fee for receiving the instalments, and a fee for writing a letter to say that the instal- ments are not paid, and a fine for not paying them. These expenses are said, by those offices that do not charge them, to amount to a further addition of 15 or 20 per cent.; which seems exaggerated, or drawn from some peculiar case : however, there is little doubt that the poor devil who "goes a-sorrowing " to these offices. pays .20 per cent, upon his loan, putting out of view legal expenses should such become necessary.

It may be supposed that this is only a necessary profit to cover losses from such a necessitous and irregular class of borrowers : and losses no doubt take place, but we have understood not nearly so often as might be supposed. Indeed, the precautions are such that eventual loss is not probable. Every borrower must be re- commended by two persons, and find two more, housekeepers of a twelvemonth's standing, to become security for him ; upon whom both debt and costs will fall if the borrower do not pay. Under these circumstances, with a sharp practitioner at band, it is not likely that the office will suffer often. The compiler of the publi- cation under notice intimates in his introduction, that they rather like want of punctuality, as being the most profitable.

" There is among them a standing joke (applicable to nearly all) of a man havipg applied for the discount of a second bill, being kicked out of the office ; and upon his friends having asked him with indignant surprise if he had not paid his former loan, coolly replying, ' Yes! that is the very reason.'"

Little circumstances indicate the class of persons who re- sort to these larger kind of pawn-shops. Some societies reserve a power of calling upon the sureties to produce their receipts for rent and taxes, in a few instances avowedly to identify the person ; most of them require the references to be written legibly, and sometimes to specify the name of a public building in the vicinity ; a good many of the meaner sort are held at public-houses, (involving both a direct and an indirect increase of expenditure); and it is curious to compare their high-sounding titles with their actual domicile— the "City of London Loan Society" is to be met with at the Axe Tavern, Milton Street, Fore Street, Cripplegate ; and the "City of Westminster Loan Company," at the Bull, Wood Street. One or two societies seem to be a sort of Stock Exchange upon a small scale, for gambling in little, without giving sagacity or priority of information a chance. In the Money Club at the Queen's Head, for example, a junior member seems to have two rocks ahead—he must wait till the prize subscription-list is full, and then wait for his turn.

"MONEY CLUB.

"QUEEN'S BEAD, LITTLE PULTENEY STREET, GOLDEN SQUARE.

" For accommodating members with loans of 5/. and 101., without interest, spending money, or balloting, by the payment of 2a. weekly for 5/. and 4s. ditto for 10/. Meeting-nights every Thursday, from eight till ten o'clock.

"Rule 1. The society to consist of an unlimited number of members ; and each member to take as many shares as he thinks proper, and to pay for each share the sum of 4s. 2d. per week, 4s. to be placed to the member's account, id. for the secretary's salary, and ld. to go towards a fund to snake good any losses that may be occasiontd by defaulters.

"Rule 2. That the hours of business be from eight o'clock to ten every Thursday evening ; and that the Secretary do then and there announce how much money is in hand, and declare a prize whenever there is sufficient for that

purpose.

"Rule 3. That each prize be of the value of 10/. 10s., and that seniority of membership take precedence for each prize ; but should the person obtaining the same not require it, the same shall be sold to the best bidder, the sum not to exceed 10s.; such sum to go to the person who sells, the Secretary deducting Is. 6d to go to the guarantee-fund to meet the losses.

"Rule 4. That all persons receiving monies find securities for the repay- ment of the same, viz, two respectable housekeepers for each 10/. 10s. drawn from the funds of the society ; and that the Secretary with one other of the members do make inquiries respecting the solvency of the parties offered as security, and take their signatures on the proper stamp; for which duty the borrower shall pay to each person the sum of is. 6d. fee to the Secretary, as also Is. to the Fuarantce-fund.

"Rule 5. 1 hat the Secretary do appoint two persons to assist him in making the inquiries; each to receive Is., to be paid out of the fines.

"Rule 6. That should any member fail to obtain satisfactory securities, he shall be at liberty to resell the chance to another member, with all the ad- vantages attending each sale, or draw out all he has paid in by giving one month's notice in writing and paying Is. to the guarantee-fund. "Rule 7. That all persons after receiving their advances and neglecting to pay their instalments regularly, shall pay a forfeit of id. for every neglect."

Strange, the hocus-pocus tricks men practise upon themselves and one another in hopes to lessen difficulties by varying their forms or their names ! There are, no doubt, hundreds and thousands of persons who, if the workings of these Loan Societies could be brought before them, or even upon the prima facie evidence of their rules and regulations, would denounce them as a tremendous evil, and rail at the mitigation of the Usury-laws as the cause of it. That any good effected by these societies is the exception, we have no doubt. The only two legitimate causes of borrowing are—to reap a benefit from the loan over and above the interest, (which, at the rates we have indicated and with the present state of profit, can never be the case,) or to meet a sudden demand that must be repaid by economy or a future receipt ; neither of which are likely, we fear, to take place with the majority of borrowers of this class— clerks, journeymen, and petty tradesmen. At the same time, these societies rather change the form of the evil than produce it. If they were all put down by act of Parliament, or the Usury-laws re- stored in their rigour, the necessity of the borrowers would remain, and they would be driven to sell their stock (where they have any) at a sacrifice, or to run to the pawnbroker, or to go without the money altogether. That the direction of the mischief is changed in many cases, we admit : the Loan Societies and their agents eat up the money which might have gone to creditors; or, most pro- bably, to maintain the borrower's family a little while longer, before he was compelled to descend somewhat in caste, or face ruin, or run away ; or the sureties have to pay for their good-nature. That the working of the Loan Societies is mischievous to a certain ex- tent, we do not deny : but, like pawnbrokers, they rather offer temptation to poverty and improvidence, than cause them. Those two things are the causes of the evil, and those things are beyond the direct power of acts of Parliament. The law, however, might impose some further regulations, and perhaps compel all Loan So- cieties to comply with them.