SOCIAL ECONOMICS OF THE INDUSTRIAL ORDERS. 



loan-societies is in the hands of the leading trades- 

 men, but the principle adopted is the same as in 

 the working-men's associations. Some idea of the 

 extent to which the money-lending system prevails 

 in this country may be formed from the fact, that 

 during 1873, no less than 124,664 loans were 

 granted by 464 loan-societies, representing a total 

 sum of ^613,963 in England and Wales alone. 

 The amount paid for inquiry fees and forms 

 was ^7891 ; and for interest, ,30,568. During the 

 same time, 8021 summonses and 1614 warrants of 

 distress were issued. The ample manner in 

 which the loan-societies secure themselves against 

 loss, is shewn by their recovering .12,772 out of 

 ^15,896 owing to them by defaulters. The largest 

 number of these societies is to be found in Middle- 

 sex ; and the largest individual societies in the 

 northern English counties Bolton, in Lancashire, 

 having eight associations, one of which possesses 

 232 members, and a floating capital of about 

 ;i4,6oo; and Birmingham having another associa- 

 tion, the Loan-society, with 390 members, and 

 a capital of .5624. The great number of loans 

 are for sums under 205. A very large amount of 

 business is also transacted by individual money- 

 lenders, especially in rural districts, where thou- 

 sands of loans for sums under IDS. are annually 

 granted at exorbitant rates of interest. The com- 

 parative ease with which loans are now obtainable 

 by respectable tradesmen and working-men, has 

 tended to check the amount of pawnbroking busi- 

 ness done in this country ; but the difficulties and 

 extortions which formerly appeared inseparable 

 from the loan and pawnbroking systems, led to 

 attempts at replacing them by two other institu- 

 tions, the Loan-fund and the Mont de Piete", both 

 of which were conducted on charitable principles. 



The Loan-fund. 



The working of the loan-fund system has been 

 confined principally to Ireland, where it was 

 originated in the year 1836. In that year, an Act 

 of parliament (6 and 7 Victoria, c. 91) authorised 

 the appointment of a central board of commis- 

 sioners, called the Loan-fund Board of Ireland, 

 which still subsists. Every society registering 

 itself with this board must conduct its business 

 according to the Act, and such rules as the cen- 

 tral board may issue with the sanction of Her 

 Majesty's Treasury ; they also become liable to 

 inspection by an officer of the central board. The 

 gentry of a district usually originate a society. 

 The funds are raised by subscription on deben- 

 ture bonds issued by the society. In some socie- 

 ties, the funds are entirely the gift of some chari- 

 table individual ; in others, interest is paid upon 

 them, generally at the rate of 4 per cent. The 

 funds being subscribed, a treasurer, secretary, and 

 directors are appointed ; and the rules being 

 drawn up with the sanction or emendation of the 

 central board, the society is constituted. In 

 applying to obtain a loan, the applicant receives a 

 printed form, for which he pays a penny. Into 

 the blanks in this note he has to insert the partic- 

 ulars of his application ; his own name, and the 

 names of his sureties. The application is then 

 considered by the officers of the society, and 

 granted or refused, as deemed advisable. The loan 

 has usually to be repaid in weekly instalments 

 of one shilling per pound, and runs, therefore, for 

 twenty weeks interest at the rate of sixpence per 



pound being deducted from the original advance. 

 The interest charged is thus equivalent to a dis- 

 count of about j\ per cent per annum. There 

 are likewise monthly loans granted, on which dis- 

 count is charged at the rate of id. per pound. 

 The commissioners of the Loan-fund Board send 

 an annual Report to parliament, and from these 

 Reports we learn that in 1845, there were in Ire- 

 land 255 Loan-fund societies, which, during the 

 year, had granted 507,339 loans, representing the 

 amount of ^1,857,457. During the disastrous 

 years succeeding the failure of the potato crop, 

 the system was exposed to a severe ordeal, from 

 the effects of which it has never recovered. The 

 number of societies sank to 160, the number of 

 loans to 175,673, and the amounts circulated to 

 ^649,934. In 1856, the number of societies was 

 115; the number of loans, 202,420; and the 

 amount circulated, ^917,686. In 1871, the num- 

 ber of societies was 81 ; the number of loans being 

 115,095 ; and the amount circulated, ,542,295. 



The steady decrease in the amounts circulated 

 through the instrumentality of the Loan-fund 

 societies is attributable, to some extent, to an altera- 

 tion for the better in the circumstances of that 

 portion of the industrious agricultural poor of Ire- 

 land which constituted the principal borrowing 

 class, but mainly it must be ascribed to the prac- 

 tice which has been adopted by the branch 

 banks throughout the country of issuing loans 

 so low as 10, and even ^5, to borrowers 01 

 that class of small farmers and dealers on a 

 small scale, who could only heretofore get loans- 

 of such small amounts from Loan-fund societies. 

 It was expected that the Irish Loan-fund would 

 confer a considerable benefit on the saving 

 Irish poor that it would, in fact, become a 

 sort of savings-bank ; paying a higher interest 

 to depositors than the ordinary institution of 

 that name the great bulk of the capital being 

 subscribed by industrious peasants and small 

 traders. This expectation has been only partially 

 realised, the number of depositors in 1871 being 

 1060, against 2461 in 1856. Appended to the 

 thirty-fourth Report is a list of thirty-three societies 

 which the board, in virtue of its powers, had 

 ordered to be closed, and their affairs wound up. 

 The result of the operations of these thirty-three 

 societies was a loss of 10,700 to the depositors. 

 In addition to these thirty-three societies, upwards 

 of loo others wound up their affairs without the 

 intervention of the board, but with what result to 

 the depositors does not appear from the Reports. 



The Mont de PiAd 



Benevolent persons, impressed by what seemed 

 the abuse and extortion of pawnbroking, have at 

 various times attempted to establish institutions 

 for carrying on that business for the exclusive 

 advantage of the poor. Several years ago, an 

 attempt of this description was combined with the 

 loan-fund of Ireland. The first so-called Mont 

 de Pie'te' (a term of French origin, mont being 

 applied to a heap of money, while the word ///// 

 expresses the religiously benevolent views with 

 which the fund is administered) was established in 

 Limerick. It commenced operations in 1837, at 

 the instigation and under the auspices of Sir 

 Matthew Barrington, who took great interest in 

 it, and made considerable pecuniary sacrifices in 

 its behalf. The working of this institution during 



523 



