Committee Reports > List of Committees > Dáil > 1930 > Select Committee on Moneylenders Bill, 1929 > Report - Moneylenders Bill, 1929 together with the proceedings of the Special Committee and Minutes of Evidence

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 20adh Mí na Samhna, 1930.

Thursday, 20th November, 1930.

The Committee sat at 11 a.m.

DEPUTY J. T. WOLFE in the Chair.

Mr. A—— C—— called and examined by the Chairman.

862. You come here to give evidence as to any transactions you had with money-lenders?—Yes.

863. I take it that you do not want your name published?—No, sir, I do not.

864. We quite recognise that?—Thank you, sir.

865. You live in the City of Dublin?— Yes.

866. What is your occupation?—Would that be published?

867. Chairman.—Very well—did you see in the “Independent” an advertisement from moneylenders?—I did.

868. And did you make application for a loan of £30?—I did.

869. In reply, I take it, you received the usual forms of application?—Yes.

870. And you filled them up?—I did.

871. Did a representative of the firm call on you or did you call on them?— They called on me.

872. Deputy George Wolfe.—When you applied to them in the first instance they called on you?—There are two cases—one in Dublin and one in Newcastle-on-Tyne.

873. Chairman.—I am asking you at present as regards the one you got through the medium of the “Independent” advertisement?—Well, the two were through the “Independent.”

874. You applied to one of these firms for £30—that is the one I am asking you about?—Yes.

875. How much did you borrow from them?—From the one across the water I borrowed nothing.

876. But the one I am speaking of is the Dublin firm. How much did you borrow from them?—The bill was for £30, and I received only £20.

877. You signed the bill for £30 and you received only £20?—Yes.

878. When was the £30 to be repaid?— Within a period of twelve months.

879. How?—By instalments of 10/- a week.

880. An instalment of 10/- a week would not pay off £30 in 52 weeks. That would leave a balance of four pounds. If you were to pay for 52 weeks the whole would only come to £26?—That was the agreement.

881. You were to pay 10/- a week for twelve months or further?—It was until the bill was paid. It is a long time since I saw those papers.

882. Did the man who called on you take any documents away with him?—He did.

883. What documents did he take?— Receipts for furniture and anything like that that we possessed.

884. Did he take anything else?—No.

885. Did you also apply to another company having its office in Westmoreland Street?—That is the one I am referring to all along. The other one is in Newcastle-on-Tyne.

886. Is the one you are referring to the one in Westmoreland Street?—Yes.

887. I am taking the cases in the order in which you sent them in. Did you also apply to another firm which has its offices on the South Circular Road?—That is what I want to explain to the Committee. Its offices are on the South Circular Road. They do not constitute a different firm. That and the firm in Newcastle-on-Tyne are the same.

888. You say that though they have an office in the South Circular Road they are a Newwcastle-on-Tyne firm?—Yes, the office in the South Circular Road is only an ordinary dwelling house.

889. Did you apply to that firm also?— I did.

890. Did their representative call?—I received a letter from them after I made my application, and I am sure you have that letter there.

891. Yes; the letter reads: “With reference to your correspondence with our people, I will give you a call to-morrow (Tuesday) between 1 and 2 o’clock.” Did this gentleman give you a call?—He did, sir.

892. And as a result did you arrange for a loan of £30?—I did.

893. Did you sign a bill in respect of that loan?—He produced a blank bill— a bill with nothing on it. I signed that bill with the intention of never carrying through the loan. He folded up this bill afterwards and took it away. It was blank when I signed it. In addition he took everything I possessed in the house in regard to receipts and bills. He even took death policies—ordinary death policies—which would mean that if a member of the family died while the loan would be outstanding we could not bury that member until we had applied to him for the policy.

894. He appears to have filled up this note. What happened to it afterwards? —He was gone only one hour when I wrote a letter cancelling everything and asking for a return of the papers, because I had no intention of carrying it through.

895. Did you then get back the papers? —On the following morning they were in my letter-box.

896. And you found that the promissory note was filled for £60, same to be repaid by instalments of £5 monthly, and should default occur the whole balance to become due and payable immediately. He also took the precaution of getting your wife to sign it?—Yes.

897. And you were only to get £30, though he filled it up for £60?—Yes. What I want to try to prove to the Committee is that you cannot get away from them. There is another letter there that I received from that firm, though I had cut off all communication with them. That letter states that they deal direct through the office, and that they would fix up everything. That shows that they absolutely try to get you into their grip.

898. Are you sure that in the case of the loan of £60 they did not promise to give you £40—It is so long since I saw those papers that I am not sure.

899. Deputy Geo. Wolfe.—Did they hold you to the bill you signed?—No, but they made repeated efforts to get me to fulfil the transaction.

900. Chairman.—When you had altered your mind as to applying for the loan, you say they kept pressing you?—They sent me another letter.

901. They sent you two letters from Newcastle-on-Tyne?—Yes.

902. In the letter of the 11th July, they state:—“… We naturally regret that no business has resulted. We are not quite clear as to why this has been held up. We have somehow the feeling that we can do better if the matter is taken up by our office to deal with you direct, and should you still desire to have the proposed business carried out, we shall endeavour to meet you in such a manner that will commend itself to both parties concerned. Should this be the case, we will be glad if you will kindly state your present requirements.…” There was a further letter on the 19th which stated: “As our representative happens to be at Dublin just now, we are forwarding your papers on to him, with instructions to complete the loan as early as possible.” You appear to have written in the interval?—I let them go ahead with that again and he called on me—the same man called—although they told me in their letter that they would deal direct from the office. The man who called was Mr. Tully.

903. The advertisement reads like this: “Registered at Dublin Castle on 29th June, 1928, to lend money in the Irish Free State. LOANS BY POST: £20 to £5,000. Why worry now where to obtain a Loan at Low Rates. We are lending money to Ladies and Gentlemen at 4 per cent., which is in accordance with the English Act of Paliament—namely, £20, repayable at £20 16s. 8d.; £30, repayable at £31 3s. 0s.; £50, repayable at £52 1s. 8d.; £100, repayable at £104 3s. 4d. Other amounts in proportion. One to three years’ Credit allowed. Existing loans paid off. No fee. Strictly private. Do not hesitate: write now.”?—Yes, that is the advertisement.

904. Deputy Briscoe.—What is the name of the firm?—Haywood and Haywood, Ltd., 28 Grainger Street West, Newcastle-on-Tyne. When you are signing a bond you make it payable to Haywood and Haywood, 62, South Circular Road, Irish Free State.

905. Chairman.—Did you answer an advertisement of the Southern Irish Trust, Limited, 36 Westmoreland Street, Dublin?—Yes.

906. Their advertisement reads:—“Are you willing to pay 4/- in the £ interest for 12 months for amounts from £100 to £10,000? Repayment spread over a period from 1 to 3 years. Beware of misleading rates and pay no fees. All business completed in privacy. By post if desired. No fees or expenses charged whether business results or no”?—That is so.

907. Did their representative call on you?—He did.

908. Did you proceed to borrow £20?— That is correct.

909. Did you sign a bill for £30?—I did. As regards the bill I signed in Westmoreland Street the advertisement said they would charge 4/- in the £. When the representative called, I mentioned that, and he waved his hand as much as to tell me it was only a blind. I received the money, but after some time I became reluctant to pay such an interest. They threatened legal proceedings and brought the matter to the High Court. The Master of the High Court asked me could I pay £20. That would be allowing them £3 10/- interest because I had already paid that amount. They sued me for £26 10/-, but the Master of the High Court allowed them £20.

910. Deputy Little.—When they sued you was it after 12 months had elapsed?— It was very near the twelve months.

911. Chairman.—What instalments were you paying?—Ten shillings a week. I was to pay the £20 allowed in Court at 5/- a week.

912. Deputy Kennedy.—Has that bill been paid?—It is being paid.

913. Deputy Doyle.—Was that your first loan?—It is the only loan I have ever had.

914. Deputy Cooney.—Is it your contention that this firm of Haywood and Haywood have been putting undue pressure on possible clients in order to get them within their grip?—I would like to make it clear that their system is responsible for the absolute breaking up of many a happy home and for many a farm coming under the hammer. Mr. Tully told me that he was all through the country. If they adopt the same procedure in the country as they did with me, in what state must the poor people be?

915. Do they go out of their way to get people to borrow?—The proof is there. When I cut off all communication they wrote saying they would deal direct with me from their office and they could not understand why I did not transact business.

916. Deputy Wolfe.—You approached them without receiving any circular?— Yes, in answer to their advertisement. In the Courts I noticed the legal profession always showed great countesy towards the borrower. They always took into consideration that the borrowers were fighting an unfair fight.

917. You are paying off the debt still?— Yes. The Judge allowed £3 10/- interest, and they were anxious to charge me £10.

The Witness withdrew.

Mr. P. J. McCarthy called and examined.

918. Chairman.—Do you wish your name withheld from the Press?—I am not particular; it may do a lot of good.

919. How long is it since you got married?—I got married in 1922.

920. Subsequent to your marriage, did you find that your wife, prior to marriage, had been in the habit of resorting to moneylenders?—Yes.

921. You found she was still continuing to do so?—Yes.

922. Has your wife any separate income?—She carries on a business as a hair-dresser.

923. Did you call on the moneylenders? —I called upon two with whom she had dealings. I found they had been giving her loans, and I told them that judging from the way in which she was involved it would be impossible for her to get out of their clutches.

924. On two occasions in fact, were the bailiffs in possession?—Yes. I approached the moneylenders and declared that I did not want any further dealings between them and my wife.

925. How did the moneylenders receive you when you called and said they should not have any further transactions with your wife?—Mr. Boland was most abusive and Mr. White resorted to a very mean thing. I called on them and explained that my wife had dealings with a Mr. Hardiman, a Mr. Jackson and others—I gave him all the names. I found she had £20 from one man and paid back £28 at the rate of £1 a week. I pointed out that it was impossible for her to meet her payments, and he ordered me out of the place. The second time I went to him my wife was ill and in hospital. While she was in hospital I made out a list of the debts she owed.

926. You ascertained that she had nine different moneylending transactions?— Yes, and there might have been more.

927. You found she had entered into contracts to repay four guineas a week in order to meet these loans?—Yes. I found Mr. White was lending her more money. In this case she signed a bill for £28, and in order to blindfold me he entered her name as Mrs. Cumberton. When I approached him he pointed out that he had no transactions with my wife and any dealings he had was with a Mrs. Cumberton. My wife tried to prevent me knowing anything about it. She was sending up the money and getting slips of paper in receipt. I found one receipt for 11/- on November 8th, and that was not entered in his ledger; she had not the benefit of that. I found in the ledger that the loan was made to Mrs. Elizabeth McCarthy, wife of P. J. McCarthy, and the loan was made to her although he tried to deny it to me.

928. You had particulars of the bill with White—£28, repayable at £1 a week? —Yes.

929. The £10 on that bill was repayable at 10/- weekly?—Yes.

930. The bill was for £10, only £7 10/-was advanced, and the amount was to be repayable at 10/- weekly?—Yes.

931. Another bill was for £3 15/-, £5 being repayable at 5/- weekly?—Yes.

932. In fact, we get this testimony from you that four moneylenders are doing business at exactly the same rate of interest?—Yes.

933. Did your wife understand the rate she would have to pay or did she just accept what they said?—It was not a case of understanding the rate; it was a case of getting the money any way. It was not a case of living beyond our means or in a fool’s paradise.

934. You make the suggestion that moneylenders should have a registered office wherein no other business is carried on?—Yes. The reason for that is owing to what occurs in factories and workshops, such as the railways, Guinness’s and Jacobs. The moneylenders have their agents in these places and allow them at the rate of 4/- to the £. The agents lend out the money again at, perhaps, 2d. or 3d. to the shilling. It is not the agent’s capital but the moneylender’s. That is why I would like to have registered offices where no other business would be carried on.

935. The rate of interest to be 20 per cent.?—I would prefer 12½ per cent. per annum, the same as in England.

936. Deputy Cooney.—It is 48 per cent. there?—I was reading in the newspapers that it was 12½ per cent., but I suppose that is misleading like some of their advertisements.

937. Chairman.—If you borrowed £10 at 20 per cent. how would you make it repayable?—I would suggest that it should be repayable in instalments inside the 12 months, but the rate of interest should be put down before the bill was signed.

938. Another recommendation is that no married woman should contract a debt without the knowledge of her husband?— Yes. I know moneylenders who are aware that the husbands know nothing about the matter, and who use every means to get the women into their clutches. I read in the evening papers that the honorary chairman of the Moneylenders’ Association stated that in the majority of cases the husbands of these women are idlers, and that if they knew their wives were borrowing they would want half the loan. That is not so. Some of the street traders get money for stock, but they also lend the money at the rate of 3d. to the shilling. There would be one principal in a neighbourhood, and she would lend 5/-, 15/-, or £1, having got an advance of £7 10s., agreeing to repay £10 at the rate of 5/-or 10/- weekly. The moneylender will only have one place to call for his money.

939. Your next recommendation is that there should be no fines for default?— Yes.

940. That speaks for itself. Can you tell the Committee if fines are charged? —Not exactly a fine, but when you run into arrears, they know that a woman is afraid her husband will know anything about it, and she is “ballyragged.” The result is that another woman calls at the house to know if she wants money. Of course, the woman concerned grasps the opportunity of getting a loan in order to pay off the arrears.

941. Another recommendation of yours is that no person under 21 should be permitted to contract a loan. That is the law already?—Well, it is abused because, as I said, the moneylenders have agents in the factories. Girls of 14, 15 and 16 years of age get loans of 5/- or 10/- and repay it with interest at the rate of 3d. in the shilling.

942. The Committee cannot put into a Bill what is already in another statute?— No.

943. Your idea is that the lending of money to a minor should be dealt with more severely than is at present the case? —Yes, as a little reminder.

944. In other words, making it a penal offence to lend money, with knowledge, to a minor?—Yes.

944a. You also suggest that it should be a penal offence to make loans outside the moneylender’s registered office?—I do, as that would prevent the lending of money in factories.

945. Deputy Kennedy.—You stated that it is the practice to have agents for the moneylender in factories?—Yes.

946. Take a factory like Jacobs’?— Moneylending is going on in Jacobs’.

947. You would not think that if the firm of Jacobs were aware of that, that it would be tolerated?—Members of the staff so engaged would be dismissed immediately.

948. You say that it is a common practice even in places like Guinness’s?—Yes; and also on the railways. The rate of interest is 3/4 to the £ per week.

949. In case of default did I understand you to say that if, say, £1 was in arrears the borrower would go to the original lender and borrow £1 to repay him, or is it from another moneylender he would get it?—Not from the original moneylender but from another. The moneylenders have an association, and they have a list on which the names of borrowers are kept. They know if a person is a good or a bad payer. It is very seldom that moneylenders make loans except they are sure of being paid.

950. If a borrower gets into arrears with the moneylender is extra interest added to the amount due?—No, but pressure is put on by trying to frighten him. There is such a case at present. A moneylender refused an offer of 5/- made to him by a woman who had been dealing with him for five years, and who very often got £20 from him. She was trying to get out of his grip. He refused to accept the offer, so I told her to give him nothing and to let the matter go to law. That man accepted 1/- a week since. Of course, he is only waiting until this question is settled. In fact all the moneylenders are quiet just now. The honorary chairman of the Moneylenders’ Association stated that they allowed 33⅓ for bad debts. I had a dealing with one moneylender two years ago, and he has never pressed me for payment. I did not take the amount as a loan as I did work for him. Recently, since this Committee was formed, I got a letter from him stating that on looking over his books he found that £5 was much over-due. Mine is not a bad debt. The moneylender knows that I will repay.

951. Have you paid anything within two years?—Yes. I had an understanding with him. I told him at the time that I was thinking of going to the United States, but that I would settle his bill before I went. I signed nothing. I often did work for him and perhaps did not get payment when he would be away on holidays. He gave me £3 15/- and charged £5. That was the only understanding.

952. Deputy Little.—Was this a money-lender?—Yes, a registered moneylender.

953. You still owe him some money?— I do, but if I were going away, I would settle up with him in full.

954. You referred to the bailiffs having been in, but you did not tell us who sent in the bailiffs?—Mr. N——.

955. He was selling your wife a coat, and at the same time lending her money? —I could not get proof of the lending of the money; it was always put down for the coat.

956. You stated that when you went to one of these moneylenders he used a very mean threat against you?—Not a threat.

957. What was it?—He carried on business with my wife and put another woman’s name in the book. He denied that he lent her any money, and I saw her name in the ledger.

958. For what purpose do these people under 21 years of age employed in factories require to borrow money?—Their wages may be small. They may be on half-time or three-quarter time, and there may be a very good picture or a dance on.

959. That is a type of moneylending which is absolutely unnecessary?—Yes.

960. It is a kind which might be wiped out without any injury?—Yes. It teaches these people to lie to their parents.

961. You think there is a class of people who could make proper use of loans even at 20 per cent.?—I do.

962. They would not be simply getting into the position where they would be making no money; they would be able to pay off the money borrowed?—That would be so if the moneylender took the necessary precautions before making the loan.

963. I am not looking at it from the point of view of the moneylender. You think there are people who need money and could get out of the moneylenders’ hands if they had only to pay 20 per cent.?—Yes.

964. Deputy Doyle.—You made certain statements regarding the operations of the moneylenders in the city. Apart from the transactions you referred to as having been made with your wife, have you any experience of what you have stated. Do you speak from personal observation, or is it merely hearsay?— Do you mean if I have experience of special cases?

965. You made certain allegations about the traffic which is being carried on in this way. Do you know of your own personal knowledge that these operations are going on?—Those who have been in it have told me. I could submit the names of several. There can be proof at any time of those cases.

966. Is what you have stated here based on your own observation, or has it been communicated to you by others?— I speak from my own observation and from what has been conveyed to me by others.

967. Have you obtained any loans yourself?—No. I had only one business transaction with them, and that was not a loan. That is the transaction I spoke about. I got a letter after two years stating they found my name in the book. They did not state how much I owed, as I signed no bill. I often left a few shillings with them when passing by. They know very well it will be paid.

968. In 1929-30, how many loans did your wife obtain without your consent?— I could not say whether some of these loans were contracted in the previous year or not. They would be in 1928, because my wife was in hospital from December, 1928.

969. Could you state the amount of the loans in each case?—I have them written down. There was a sum of £20, and we paid £28.

970. What amount appeared on the book?—£28. I could not tell what money my wife actually got into her hands.

971. She asked for a loan of £20. What did she get, and what did she pay?—If she wants £20, she repays £28. She gets the full £20 and repays the £28 at £1 per week. As regards the last loan she got, I found there was only £12 or £14 to repay. The balance and interest were taken off all the same.

972. The balance due is deducted from the new loan?—Yes.

973. And the full loan is charged for? —Yes.

974. Deputy Cooney.—At the time your wife got these loans, were you employed yourself?—I am a pensioner—a small pensioner.

975. Was your wife working?—She carries on a business. She has a hairdressing establishment.

976. You stated that in one office you saw the ledger which contained an account of an instalment paid?—Yes.

977. How did you get access to that ledger?—I went to the office. I had got several letters addressed to my wife threatening legal proceedings.

978. Did they show the ledger of their own accord?—Yes. I went in with a book I found and all these little slips. I knew Mr. White was out, but his clerk was there. The clerk took down the ledger and looked up the name of my wife. The loan was contracted in October, and this was in January.

979. You saw the ledger?—Yes.

980. What security did your wife give for these loans?—Another woman who was a customer of the moneylender gave her a recommendation.

981. Do you believe that these moneylenders, knowing the nature of your wife’s business and her probable income, were conscious of the fact that she was borrowing more than she could possibly pay?—I explained that.

982. After your explanation they continued to lend?—Not in all cases, but two of them did.

983. Have you definite knowledge of moneylenders going around and offering loans without request?—I have.

984. You have stated that one moneylender came to his client, told her she was in arrears and must pay up, and that following that another moneylender came on to her?—Yes.

985. You seem to have very wide knowledge of the activities of moneylenders in the city?—Yes, because I have had four or five years’ trouble over the matter.

986. How did you obtain the knowledge of moneylenders having agents in factories, on the railways and in other places?—In trying to find out how my wife was able to get loans so often without my knowledge. She was dealing with Christian moneylenders as well as with Jews.

987. Deputy Briscoe.—You stated that bailiffs were sent in on two occasions?—On one of these occasions it was not through the moneylenders they were sent in, but they were the cause of it.

988. Are you prepared to say definitely that Mr. Newman is a moneylender?—I would like to get leave from the person who borrowed money from him to give his name—the person who told me he received money although goods were marked in the book.

989. You case is that he puts down goods in the book where in fact he has given money?—Yes, a pair of shoes, a coat or a suit.

990. That is the class of transaction it was?—Yes.

991. Are you prepared to state that while your wife was in the hands of a number of moneylenders each of these moneylenders knew she was in the hands of the others?—Yes, because I told them personally.

992. They lent her money afterwards?— Yes. I told them about it, but they are dealing with her still.

993. She may be paying off the arrears? —Yes, but they are dealing with this other woman for my wife.

994. You met Mr. —— here?—Yes.

995. Was it before or after that you got notification from him?—After that.

996. When you met him here he knew what you were coming here for?—Yes.

997. Have you got the letter?—I have not got it with me.

998. Could you get it for the Committee?—I expect I could, except my wife has done away with it.

999. This is a very important matter, Mr. Chairman, that I would like to have cleared up. I happen to know that Mr. McCarthy was in the Dáil precincts on the occasion when the moneylenders were here to give evidence. Mr. McCarthy was indebted to one of these moneylenders, and his statement now is that it was subsequent to his meeting this man here that he got this letter calling on him to pay up this money which, he says, was not a proper moneylending transaction. I would like to have that letter produced, because, on the one hand, there is, if one may so put it, the suggestion of blackmail—“If you are going to give evidence against us here, we are going to make you pay”—while, on the other hand, it may be just a coincidence that Mr. McCarthy got the letter at that time. I would like to know from Mr. McCarthy now if he could lay his hands on that letter?—I will let the Secretary to the Committee have it.

1000. Have you any occupation yourself at the moment?—I am a boot and shoe repairer.

1001. You are living with your wife?— I am not living with her now, but there has been no legal separation. Things have not been too good with me, but I give her £1 4/- a week.

1002. You got married in 1922? When did you separate from or leave your wife? —I left her, but it was not a separation. When I tried to prevent her getting into difficulties, she said it was her home and to leave it, and I walked out. The first time that occurred was in March, 1928, shortly after she came back from hospital. That was all over the money. She promised me, while in hospital, that she would not have any more of these dealings without letting me know.

1003. Have you any letters?—I have some of them.

1004. Could you produce one of them?— I think I could. If I am not greatly mistaken, the solicitor on Ormond Quay has a copy of one of the letters.

1005. Deputy Cooney.—You name a man here who, you say, is acting as a moneylender’s agent in a certain factory in the city. You are aware that if his name were published it might mean his dismissal. Are you quite sure that he is acting as an agent for a moneylender.— Quite certain. If you allowed me until after lunch time, I would be able to give you proof positive.

1006. Are you quite satisfied that in making that statement you are not doing the man an injustice?—People have had dealings with him.

1007. Then in making the statement you are acting on information received? —Yes. I have had no transactions with him.

1008. Deputy G. Wolfe.—Is this man employed in the firm?—Yes.

1009. And is he paid by the firm?— Yes. He can do a lot of injury to workers under him. He is a checker, gateman, timekeeper or something like that.

1010. Deputy Cooney.—Do you know the man personally?—I will make it my business to know him at lunch time.

1011. But do you know him?—No. I had no transactions with him.

The Witness retired.

Mr. D—— called and examined.

1012. Chairman.—Do you wish your name to be published?—I think it would be better not to publish it, but I have no reason for suppressing it.

1013. You refer to the question of the lending of money to a wife without her husband’s consent?—Yes. A statement was made at a preliminary meeting of this Committee by a gentleman in his official capacity to the effect that a husband never paid his wife’s debts. I have paid them.

1014. Then you have personal experience of that?—Yes.

1015. You also refer to the fact that a member mentioned the case of a woman who had been driven into a lunatic asylum?—Yes, my own wife. She is dead since.

1016. Have you had experience of moneylenders dealing with minors?—Yes, in the case of my own step-daughter. She is a minor still and they had dealings with her in 1927.

1017. How is that done?—I do not know how they do it, but I paid the debt.

1018. How do they get them to sign?— I do not know anything about signatures, promissory notes or anything else, but they put in the account to me and I paid it.

1019. Might her appearance have led a person to think that she was over 21?— This girl is still a minor. She went away to an aunt who lives in England. The man collecting the debt came to me and asked me: “How is May?” I told him that she was away with her aunt in England and that she was getting on well. He said to me: “She is only a child.” I said to him: “I am very glad you admit that.” He asked me: “Why?” I then asked him: “Are you aware that you have been dealing with a minor?” He replied: “I did not know that until now.” But I said to him: “You have just admitted that she was only a child and surely you must know.” Then he said: “It will be a lesson for me for the future.” I then said to him: “But I have to pay for your education.” This particular man travels for soft goods and lends money at the same time. I had no knowledge that there was any moneylending going on until I was presented with the account. When he was coming to the house I thought it was about a pair of curtains or something like that. He was the only Jewman I saw coming to the house. I have no edge on Jewmen, because Irishmen are worse. But I thought all the time that it was about curtains he was coming to the house. When my wife died in October, 1928, he dished me out with the four cards that I now produce. He said to me: “These are your wife’s debts; what are you going to do about them?” I said: “I suppose I will pay them.” I went to consult my spiritual adviser about the matter, and he said that if the debts were properly incurred there was a moral obligation on me to pay. I never questioned them then, of course. (Four cards handed in.)

1020. You produce four moneylending notes containing records of what are apparently four different moneylending transactions?—Yes.

1021. They appear in four different names. Two of them appear to have the same address. Is it your suggestion that these four moneylending transactions recorded on these four notes were with your late wife?—The man collecting the money told me they were and that I was responsible.

1022. And you paid the four transactions as being the debts of your wife?— Yes.

1023. Deputy Briscoe.—Did you get a receipt from the moneylender for the payments you made to him?—The cards were receipted.

1024. Did you dispute with him the ones that were not in your wife’s name? —No. They were all receipted as paid by me.

1025. Have you got a receipt for what you paid for your step-daughter?—I sent it to her to England. I do not say that these transactions did not take place.

1026. Deputy Cooney.—Do you believe that the person who lent this money was aware that these four items were all for the one person?—I could not say that.

1027. Deputy G. Wolfe.—Did you pay the demands that were sent in without referring them to your wife?—She met with a bad accident in the street. She was seriously injured about the head, and the doctor told me to keep her as quiet as possible.

1028. Chairman.—Had she no separate estate?—No.

1029. Deputy Little.—How long do you think that was going on?—It might be about three or four years.

1030. How much money was involved— That is money on the lending side?

1031. Yes?—There might be about £30. She was a long time ill and I could not question her. I followed the doctor’s instructions, and put no questions that would disturb her. This money lending is not peculiar to any nationality. There was a Dublin man concerned who supplied my wife with things. I have his bills here. A woman came and said: “Do you know your wife owes so much money to this soft goods merchant?” I said: “Yes, a few shillings” and I paid her, and I then said: “That clears that now,” and she said: “There is some more due.” I said: “You had a right to tell me that at first.” I was paying about £2 a week to clear off. I went to a gentleman I knew and I told him how I was fixed and he told me to ask for particulars. They sent me the items of the account but without any dates. As I was going to my work a young gentleman said to me: “What about this account?” I said: “What account?” He said there was money due. He said it was off a loan account. I said: “I do not know anything about a loan account.” He said: “I am a legal man.” He meant to convey that he was a solicitor, but he was not. He was a clerk under the Dublin Corporation. He said: “I am a legal man and do not want to do anything drastic.” I asked what he meant, and he said: “There is your employer.” I said: “Go to hell,” as, naturally, I was annoyed. The next thing that happened was I received a solicitor’s letter and I said I would not pay. The Workers’ Union of Ireland said they would defend the case and the case came to the Court and the woman who keeps the soft goods store was asked: “Did you supply these goods?” She said: “Yes.” “To whom?” “To Mr. ——” she said. This was in July of 1929. She had been sworn on the Testament at the time. I never saw the woman before, though she swore that in the Court. It transpired that papers had been mislaid in the Union. The solicitor said to me: “Why did you pay money if you did not think it was due?” I said that I did not owe it. I am prepared to swear that I never saw that woman before or since. In this case there was a business in soft goods and money lending.

1032. Deputy Wolfe.—I notice that in documents you have handed in this man describes himself as carrying on a gramophone business. Is that genuine?—I do not know anything about the man.

1033. Would that description be a cloak for the money lending business?—I expect it is, but I cannot say anything about him.

Mr. C. A. Jackson Jellie, called and examined.

1034. Chairman.—You have been acting as auditor for moneylenders?—Yes, for a number of years past.

1035. You have prepared a statement showing the ascertained result in eight cases in the money lending trade?—Yes, covering two years.

1036. We would be very anxious to ascertain, first of all, the average rate of interest per cent. per annum charged by moneylenders in Dublin. In your statement there is an absence of any evidence under that heading?—I am prepared to deal with that. In cases I have come across they charge 5 per cent. in the pound, which means an addition of 33⅓ to the actual cash handed over.

1037. The Committee would be anxious to know the rate per cent. per annum?— Take a loan of one pound, that is supposed to be repaid at the rate of one shilling per week for 20 weeks. If so paid, the rate per cent. per annum would be 166.

1038. Is that a fair specimen of the transactions you come across?—It is. That is theoretically the maximum. Assuming the contract was carried out as initiated, that would be the result in terms of per cent. per annum.

1039. We have come across instances in which the figures ran like this: £7 10s. was the amount given and a bill was signed for £10, repayable at 10 per cent.? —That is the same; that is one-third added to your cash. I would work that out at 166⅔, assuming there were no lapses.

1040. Are we to take it that the average rate per cent. per annum would be 166?— That is the average charge. I am dealing with both the theoretical and the average side of it.

1041. Why theoretical if a man has to pay it?—It is paid in fact only very rarely.

1042. But it is paid in some instances? —In rare instances.

1043. Why are the instances rare?—Because the 20 weeks are extended by lapses, bank holidays, illness and excuses that are not based on illnesses. Sometimes it is 40 weeks and sometimes 50 or 60 weeks. There is no additional interest added or capable of being added. The rate of interest actually charged or realised is much less than 166. I have one very representative case here of a man with 433 customers of the average type—that is, loans from £2 to £10. £10 would be the exception. In the majority of cases the amounts would be £3, £4 and £5. In one case, out of 11,075 payments expected, through calls to collect the money, 4,253 failed to materialise. That is taken over a period of weeks. In the case of a small man out of 516, there were 176 missed. Now as a matter of fact the percentage of lapses in those two and in other cases has worked out between 30 and 33 per cent. and that in itself is very instructive because it bears a close relationship to the realised bad debts. I have some observations to make at the end showing the connection between bad debts and lapses.

1044. Chairman.—I think you might explain how you arrived at the bad debts?—The bad debts in the case of a man with bigger turnovers were ascertained after doing everything possible to solicit the applicants but not actually attempting seizures. That would be absurd because most of these people have nothing.

1045. In arriving at the bad debts, did you calculate the unpaid interest?— No.

1046. You have only taken the actual cash advanced?—The actual balance on the account.

1047. Have you taken the cash. A man lends £7 10s. and gets a bill signed for £10. If that bill turns out to be a bad one, what do you put down?—The whole £10.

1048. You put down as a bad debt £2 10s. 0d.—We must deal with our money as stock.

1049. In doing that, you calculate the unpaid interest as a bad debt?—The whole debt.

1050. You have not given us the capital in any case?—I can only extract the capital in a few cases. In the English returns, I was only able to extract the capital in half a dozen cases.

1051. Coming to the question of expenses, what generally do they consist of?—They consist of rents and rates, light and heat, stationery, printing, postage, car fares for collections. Practically, that is all.

1052. Do you give the moneylender any credit for cash lying idle?—No.

1053. Must not the moneylender keep on hands what I would call unproductive capital?—Yes, the same as a shopkeeper keeps goods on the shelf; there is no interest on capital.

1054. Assume that a moneylender has a capital of £5,000 and at the moment he is only able to distribute £4,000. You would not allow him interest on the remaining £1,000?—No.

1055. Is that fair to the moneylender? —These accounts were prepared for revenue purposes and the revenue would allow no interest on capital.

1056. For revenue purposes, what do you think the average bad debts in the City of Dublin would amount to?—I have the average here—27 per cent.

1057. Do you know many instances in which they have exceeded 27 per cent.? —I do. I know cases of 52 and 46 per cent. bad debts.

1058. Would not that be insured?— Yes.

1059. Where a special bad debt had arisen during the year?—I never put the bad debt category in that same year unless it is a case where special proceedings had been taken.

1060. Do you know of any case in which the average bad debts would exceed, say, 22½ per cent.?—Yes, a good many. I have them as low as 8.1 per cent. and as high as 79 per cent.

1061. Is there anything you would wish to add?—There are a good many things I wish to add. I can if necessary draw a comparison between those who conduct their business from an office and those who conduct it through calls.

1062. You mean a comparison in the results?—Yes. The final completed results in these cases are of undoubted interest. Some of the smaller men have actually witnessed a decline in capital in successive years. If a small man were lending and there were a strike on, that man would be in a precarious position. There are a good many in Dublin and that business is a trifling one. “Probably the inability of moneylenders to do more than give vague estimates arises from the fact that it was quite unnecessary for them to enter into such calculations at all, as business was not done on this basis. It was always conducted on the basis of a certain charge for a certain loan for a certain time. As in practice the time contracted for was hardly ever, if at all, adhered to, while the charge was inelastic, it follows that the calculation of interest when the transaction was first entered into would be speedily at fault when judged in the light of results. I feel it necessary to say that it is most probable that the witnesses who referred to 50 and 60 per cent. referred to the addition of such a rateable amount in relation to the particular time of every particular transaction, and that it was not intended seriously to be taken as rate per cent. per annum.” … “If the actual results, being what they are on the present charges, had worked out at a certain rate per cent. per annum, what would be the position if charges were calculated at 20 or even 40 per cent. per annum? The only answer is speedy bankruptcy.” … “The analysis of payments and lapses is of special interest. The lapses percentage and the final average bad debts percentage figures are so close as to suggest an intimate relation and I believe this is so in practice, for once persons begin slipping one can seldom pull them up, and after a few misfires, as one might describe them, the habit of non-payment becomes easy, and the debt inevitably drops, sooner or later, into the bad debts list. If the rate of interest to be worked on in the future is lower than the existing one, it follows that very rigorous economy must be exercised by the average moneylender if he is to survive at all. At the moment I cannot see great diminution in his running expenses, for probably what he saves on his personal calls will be absorbed in office expenses. He will chiefly have to look for recompense in the bad debts section, and, of course, this becomes a legal question. I am informed that when Instalment Orders are granted in England, the instalments have to be paid into the Court, while here I am aware that no such provision has been made, and it is consequently left to the discretion of the defaulter, and I believe the only remedy is to apply for a Committal Order, which is the last thing a respectable trader wishes to do, even to the most unworthy debtor. It is suggested that a suitable change should be made here with regard to collection of instalment orders of all kinds.” I wish to say a few words with regard to the First Schedule of the Bill. That is the basis of calculation. Let us assume that a person borrows £15, and contracts to pay back £22 10s. in 15 weekly payments of 30s. each; the rate per cent. per annum calculated in the terms of the 1st Schedule to the Bill would seem to be 325 per cent. The 1st Schedule is devised to enable rough-and-ready calculations to be made in an easy manner, and the basis of the allocation of principal and interest in accordance with the Bill, and applied to this specific instance, would be for each weekly payment of £1 10s., £1 to principal account and 10s. to interest. Let it be pointed out here that the correct allocation of interest would be on the basis of 1s. 3d. per £1 principal outstanding per week. That is, the first week’s interest on the £15 would be 18s. 9d., and the last week’s interest on £1 8s. 9d. outstanding would be 1s. 3d., and in this case the rate of interest would come out at 284 per cent. I, therefore, in further allusions to interest calculated under Schedule 1, allude to it as nominal interest. A gap between nominal and effective rates of interest is, of course, met with at each different rate. In the example mentioned 325 per cent. nominal equals 284 per cent. actual, 84 nominal would equal 73 actual, 63 nominal equals 55 actual, and 56 nominal equals 49 actual. The cruxes that may arise are 2—namely, (a) if the borrower wishes to pay off the loan earlier than the contract rate, and (b) if he makes default in payments. Considering (a), assume that in the case under discussion 10 weeks have been duly paid, amounting to £15, of which £10 is allocated to principal, leaving £5 due on that account, and £5 to interest, leaving £2 10s. outstanding there. The point for solution is, if the borrower is prepared to clear off the account, what rebate of interest is he entitled to? He owes £5 principal, and if he pays that off he will probably claim that the £2 10s. should be remitted. His argument would be sound on the premise effected under Schedule 1, but if the proper allocations had been made the account would read: Principal account, balance outstanding £6 11s. 3d., and interest account, balance outstanding 18s. 9d. A remission of the 18s. 9d. would be in order, and the borrower should pay £6 11s. 3d. Were it otherwise he would be escaping liability for £1 11s. 3d. Surely this is not equitable. (b) Assume that on the 11th week the borrower neglects to pay his instalments when due. It will be necessary to charge extra interest in respect of that default, but what is the charge to be in this particular case? Is it to be the nominal figure of 10s. or does it not seem right that it should be the correctly allocated amount of 6s. 3d. If there are two weeks in default, the borrower under the Schedule would pay £1 interest, while he should only pay 11s. 3d. If there are three weeks, he would pay 30s., while he should only pay 15s. So that at one end of the scale the lender would suffer and at the other end the borrower, and at no time are the calculations correct except in the exact centre of the series. To push the argument to absurdity, assume 14 weeks were correctly paid, leaving the balance outstanding which was not paid in the 15th week, nor in the 16th week, nor indeed until the 20th week, is the man to be charged £2 10s. interest on that £1 whereas he should be only charged 6s. 3d.? A further serious point about the situation is in case the borrower and the lender cannot see eye to eye in any particular situation and seek a magistrate’s decision. I take it the magistrate will be bound to decide under the terms and on the basis of the Schedule, and consequently he would have to mulct the borrower in these excessive interests. They would be legal, yet illegal, at the same time. This is an additional point to the one I raised where, in the working out of calculations of interest under this Schedule, a margin should be granted, which might be 10 or 12½ per cent. between the nominal interest and the actual interest. Example:

My Committee deeply deplore the broadcast reference to suicide and ruined homes. It is, of course, common knowledge that such occurrences have taken place in England, but an attempt to identify them with this country is unfortunate. My Committee feel that in the interests of ordinary justice statistics should be produced showing, with regard to the Free State, the number of suicides that have been recorded within the last 50 years and indicating the causes ascertained for each. My Committee are confident that moneylending, as practised by them, will not be found at the root of it. Examples:—

1063. Deputy Briscoe.—Mr. Jellie referred to a class of moneylender, the man who has 433 customers as being the case of a man who had the smallest borrowers —from £1 to £3 and £4. How did you arrive at his expenses?—They were recorded for a week.

1064. That man with 433 customers would probably make 433 calls?—He would not make them all himself. It would be physically impossible.

1065. From your knowledge of the small moneylender, a man with 433 customers would have a collection roughly of about £60 a week?—He would have more than that. It would be about £73 or £74 a week.

1066. A man who has £70 a week collection would probably do most of his collection on Monday and Tuesday, by means of a pony and trap?—A good deal of it.

1067. And his expenses for that would be somewhere around 30s. As a matter of fact, this particular man is collecting every day up to Friday. In this particular instance I know he is.

1068. The bulk of the collection is on Monday and Tuesday?—That is for the smaller man.

1069. He is a small man?—He is not small. There are men with less than 433 customers.

1070. When I speak of the small man I have in mind not so much the amount that the men deals with as the man who deals with a smaller class of people?—I was dealing with the small man per se.

1071. Would you not say that a man who has a collection of £70 a week is a small man?—In one sense yes, but in another sense he is not because there are much smaller men. There are men, I know, with £100 a week and £200 a week.

1072. There are men with £30 and £40? —Quite so. The explanation is that they have other business. This is only a sideline. This man is not living on this. He is doing it to occupy himself, as a matter of fact.

1073. Would you be able to give the Commission an extract of this man’s accounts to show how you arrive at his expenses?—I would.

1074. Does he do his business from his house or from his office?—He does it from his house; he has not an office.

1075. He would not have as high expenses as the man who has got an elaborate office. Can you give us the full particulars of that case?—I can.

1076. Deputy Little.—Do different moneylenders lend at different rates per cent.?—They all start with this 5s. The man who is in a little better position than the average borrower and who can put up security is charged less. I have seen them going down to 15. I have witnessed a transaction at 15.

1077. Can you say whether the interest is lower when the bad debts are much less?—I certainly say that because these people are amenable to law. They have something to protect and they are making an effort to pay.

1078. It would be outside your experience as to the purposes for which loans are needed?—Quite.

1079. Deputy Cooney.—We are to take it from your statement that loans are based on the principle of 166 per cent. interest?—That is what emerges from it. They are based simply in the same way as the grocer will buy a pound of tea and put a certain profit on it. The moneylender takes out his 15s. and he puts 5s. on as profit.

1080. What rate of interest do you think would be the minimum at which this profession could carry on?—It certainly could not work under the English rate. It is practically obvious that it requires very different conduct from England.

1081. Have you arrived at any figures? —Personally, I consider about 50, judging from the different factors operating here as compared with England.

1082. Chairman.—Fifty per cent. per annum?—Yes. If this is analysed fully, with all the different factors, the man will make on any capital involved very little more than the average trader makes in his business.

1083. Chairman.—You think that the small debts are less easily recoverable in this country than in England?—I pointed out one obvious failing in the case of instalment orders. It is impossible to enforce them here.

1084. Apart from the question of instalment orders, has it not come under your notice that small debts are much more easily recoverable and less expensive to recover in this country than in England?—If you put it this way: Are the class of people who owe small debts more inclined to pay than in England, I would say yes, they are.

1085. Another point is that the small man in England changes about more readily?—Yes.

1086. Thirdly, if he does go you cannot trace him?—A great many bad debts here are owing to changes but that is small. Sooner or later they come under our view again.

1087. Chairman.—I am glad to hear that. Some members of the Committee here have been on another Committee during the last twelve months and they have had evidence of that. There is no doubt that small debts are more easily recovered in this country than in England?—Yes. They pay their debts better. I am talking of the work “recovered” in the strict sense. As regards the ready payment certainly they are easier.

1088. Deputy Kennedy.—In your answer to the Chairman about expenses, you said “rent, rates, stationery, car hire, etc.” Take the particular case of the man Deputy Briscoe asked you about, the man with the 433 customers. He lives in a private house. Of course, his expenses are smaller. Did you count the rent of his house?—No.

1089. Take the case of a man who is taking moneylending as a side-line, who has a soft goods trade. Do you count his rent and rates?—No, they are debited up against the ordinary trading.

1090. Deputy Little.—In reference to expenses, do you find often that the expenses include an item of interest on overdrafts?—Yes.

Chairman.—The man who has an overdraft has got rid of the unproductive capital—of money lying idle in banks.

1091. Deputy Cooney.—And he borrows at 6 per cent. and gets 50 per cent.?— That is not as bad as the banks. The banks are worse than that.

The Committee adjourned.