Loan

“ A loan is a temporary gift, and the nature of the transaction remains the same whether the man to whom the loan is made does, or does not, come under the obligation of paying rent or performing services. ”

“ If a banker can loan on a bill of lading or a warehouse receipt, or a trader can buy the same, or if a man can give a trust receipt to his banker agreeing that all his general shipments or stock in trade shall be the property of that banker until his debt is paid, it makes enormously for the rapid turning over of capital, and the extension of credit. ”

“ It is usual for each association to be restricted to a particular area of operations within which every proprietor, whether noble or peasant, may obtain a loan if he can offer sufficient security. There is always a minimum limit either to loans or to the value of property on which loans will be given. ”

“ It must not be forgotten that what is really loaned is capital,—commodities in general,—not money; the money is only a medium for effecting the transfer, and a measure of the capital transferred. What should be returned, therefore, in repayment of a loan is the same amount of commodities in general that was borrowed,—the same value. ”

“ Loans are made on written applications which are required to designate the purpose for which the loan is to be used, and the borrower is required to agree that the loan shall be used for those purposes. ”

“ Loans shall be made only for the purposes which promise to result in a saving or a profit to the borrower. Each applicant for a loan must state the object for which he desires to borrow, in order that the credit committee, which passes on all loans, may rigidly exclude thriftless and improvident borrowing. ”

“ II. The object of credit is money lent; the basis of loan is the payment of interest. If money be wanting, credit will die; consequently, there must be a method found for augmenting and diminishing the quantity of money in proportion to the demand for it. ”

“ And the advance, therefore, upon every note discounted, without reference to its character as business or accommodation paper, is properly denominated a loan, for interest is predicable only of loans, being the price paid for the use of money. ”

“ Each loan or extension of credit to an affiliate shall be secured by collateral, in the form of stocks, bonds, debentures or other such obligations, having a market value of at least twenty per cent more than the amount of the loan or extension of credit or at least ten per cent more than the amount thereof if secured by State or municipal obligations. ”

“ The workman and his two sureties who do not return the sum borrowed must never again have another loan, having forfeited his sacred engagement, and, especially, having deprived so many of his brethren of the advantage he has enjoyed, as the sum he has not repaid is for ever lost to the Bank for the Poor. The sums lent being, on the contrary, scrupulously repaid, the loans will augment from year to year. ”

“ The most important business men have to get loans. Heads of trusts and—every one. People go to their banks to get loans, and they’re not ashamed of it. Well, this is exactly the same thing. I simply walk in, repay the loan, take the watch, and go. Exactly like paying a note at the bank.”
Was it, though? Exactly like a bank—this queer, dark little shop, with barred windows—and the man behind the counter was exactly like the cashier her father used to bring home to dinner. She handed the ticket across the counter, with the money; but the man pushed the money back to her. ”

“ Each borrower must specify the purpose for which he wants a loan, say to buy a cow or drain a field, or pay off a money-lender, and this is rigorously inquired into. Only members can borrow. Any member, however poor, can borrow for a profitable approved purpose, and no one, however rich, for any other. Practically all the members see that the money is applied as agreed; and, while the loan is often made for a long period, a year or two—even for ten or more—so as to repay itself out of the profit, power is reserved to call it in at short notice if misapplied. ”

“ In making loans it should be recognized that character and industry are the basis of credit, and a loan may be made to a member who has not adequate security to pledge for it, provided he can obtain the guaranty of one or more other members, but no member is obliged to guarantee the loan of another member unless he desires to do so. ”

“ The period of twenty years, as that for which the proposed loan may be contracted, in preference to a shorter period, is suggested, because all experience, both at home and abroad, has shown that loans are effected upon much better terms upon long time than when they are reimbursable at short dates. ”

“ The truly remarkable feature of this establishment is, that if a greater sum is realized than the amount of the loan and interest, the excess is placed to the credit of the owner, or his heirs, and will be kept for one hundred years, after which time it reverts to the institution. ”

“ I wouldn't sell it at any price, but I'm short of ready cash, and I'll pay eight per cent. interest and give the next dividend as a bonus, for a loan of seventy-five dollars for thirty days. I'm proud and particular about my business, and I dislike to ask my friends for the loan."
"Say," observed the farmer, dazzled at the sight of the pretty document, "you mean you'll give all that security and interest for a loan of seventy-five dollars?"
"To an honest man who won't run away with the security, yes." ”

“ The manner in which the capitalization of collateral, and thereby the discrepancy between the putative and actual earning-capacity of capital, is increased by loan credit during an era of prosperity has been indicated in some detail in Chapter V above. ”

“ Notes of this class are, in fact, loan notes—notes to raise loans on, by selling them for hard money—either immediately by the Secretary of the Treasury, or, secondarily, by the creditor of the government to whom they have been paid. In a word, they possess all the qualities which invite investment, and forbid and impede circulation. ”

“ The redemption shall be effected by purchase at the market price. If the market price be above par, it shall be effected by drawings at par.
Art. VI. The service of the Guaranteed Loan shall be conducted by the Treasury of the Public Debt, under the same conditions as the Preference and Unified Debts.
Art. VII. The Commissioners of the Treasury of the Debt shall, fifteen days previous to each payment falling due, furnish us with an account, in a special Report to be published in the 'Journal Officiel,' of the state of the funds assigned to the service of the loan. ”

“ A loan for consumption to be returned in kind contemplates a restoration not of the identical thing loaned, but of a similar article equal in quantity, and if no return be made, all that the lender can require is the value of the thing which should have been returned at the time when the contract was broken. ”

“ The majority declare that the Bank ought to use its capital as a permanent fund and loan the public deposits on time, so that they would be repaid near the time when they would be required by government for the debt payment. ”

“ If you prefer the one year loan I shall ask you to reduce your note to $5300 which makes the interest the regular 6%. I do not wish to make any money out of you, the principal things I have in view being to help you and at the same time to be well secured in my investments—this because my fortune is very limited and my time for acquiring wealth past. ”

“ Of course, I could not say much, because I was unauthorized; but I have obtained guarantees that will command the certain issue of a loan sufficient to give a start to some, at least, of the many projects you have already foreshadowed in your public speeches. Without a shadow of doubt I declare that as soon as I am able [Pg 212] to open negotiations with your approval, a loan of several millions will be at your service. ”

“ The disposable capital deposited in banks, together with the funds belonging to those who, either from necessity or preference, live upon the interest of their property, constitute the general loan fund of the country ”

“ The only guarantee for this loan which he demands from his brothers is their oath and honor. It has a revenue of twelve thousand francs, which will be loaned without interest to workmen with families and out of work, in sums of twenty to forty francs. These loans shall only be made to working men or women who shall bring a certificate of good conduct from their last employer, stating the cause and date of the suspension of employment. ”

“ The last form of temporary loan, that repayable in bulk at a fixed date, is one which, when the sum is of considerable amount, is apt to be attended with serious disadvantages. The repayment may have to be made at a time when a state may not be in a position to meet it, and so to keep faith with its creditors may have to borrow at a higher rate in order to pay their claims. ”

“ The lenders receive a certificate of indebtedness, and have the right to buy each year a quantity of my books at half the retail price. Thus, if you lend ten dollars, you can get $5 worth of books for $2.50. These books must be ordered in one shipment, so as to save handling costs; under the Loan Plan you may place one such half-price order every year. The saving takes the place of interest on your money; it amounts to 25% interest—a pretty good rate, but not so high as millions of poor farmers are having to pay to national banks all over the country—see my “Letters to Judd”! ”

“ A man must have some property of his own before he can expect to get credit; but with some property to fall back upon in case of need, and with a good character for honesty and ability, a trader can by credit obtain other people's capital to deal with.
84. Loans on Mortgage. Credit is given in many different ways; sometimes a man is assisted by a permanent loan from a relative or friend who has confidence in him. ”

“ A capital lent at interest may, in this manner, be considered as an assignment, from the lender to the borrower, of a certain considerable portion of the annual produce, upon condition that the borrower in return shall, during the continuation of the loan, annually assign to the lender a small portion, called the interest ”

“ The lender must also, in estimating net interest, count the cost of placing, supervising, and collecting the loan. A pawnbroker lends only small sums and spends much time and effort to keep at interest a moderate capital. Five thousand dollars loaned in sums averaging ten dollars represents five hundred transactions, and yet if placed at five per cent, it yields but two hundred and fifty dollars a year. ”

“ Any loan to bank officers, exceed’g 10,000 dollars, to be curtailed at least 25 per ct. annually, until not over that sum.Sec. 3. And be it further enacted, That in each and every of said banks, all loans now existing to any president, cashier, director, or other officer, either as principal or security, to a greater amount than ten thousand dollars, shall be regularly curtailed or reduced, at the rate of at least twenty-five per cent. ”

“ If he may sell an estate, or grant a release, or assign away all his property, without control from the law, it seems very unnecessary that the only bargain which he cannot make without its intermeddling, should be a loan of money. ”

“ From the services which the bank renders those from whom it borrows, we may turn briefly to the more obvious services, rendered to those to whom it loans. Bank-loans are, in form, time-loans for a definite period of days or months, and call-loans, upon which instant payment may be demanded at will. Either form of loan may be made on the personal credit of the borrower, though this is not considered good banking, and can be safely done only in cases of persons of unexceptionable standing. Loans are made, as a rule, upon mercantile paper and upon collateral. ”

“ Our merchants and bankers owe unsettled balances or accounts, and large amounts of our securities are held there—National, State and municipal bonds, bonds and stock of our railroads, street railways and industrial corporations, and even mortgages on city property or farms, placed there by loan companies. ”

“ To call in this loan, at the rate of eight millions a year, in addition to the interest on the whole, and to take away, at the same time, that circulation which constitutes so great a portion of the medium of payment throughout that whole region, is an operation, which, however wisely conducted, cannot but inflict a blow on the community of tremendous force and frightful consequences. The thing cannot be done without distress, bankruptcy, and ruin, to many. ”

“ When a native borrows money he either promises to pay a certain amount of interest for the loan, or he promises and actually allows the lender to have his services for a specified time in lieu of interest. ”

“ To borrow money for ANY object in its discretion, if at a regularly notified meeting, under a notice stating distinctly the nature and object of the loan, and the amount thereof, as nearly as practicable, the citizens determine in favor of the loan by a majority of two-thirds of the votes given at the election. ”

“ No person, firm, or corporation, or any agent thereof, other than a national bank or a bank or trust company duly incorporated under the laws of this state, or a pawnbroker, as provided in chapter 235 of the Public Acts of 1905, shall, directly or indirectly, loan money to any person, and directly or indirectly charge, demand, accept, or make an agreement to receive therefor interest at a greater rate than 15 per centum per annum. ”

“ While the special time for contracting loans is a month after the harvest, borrowing goes on all the year round. If the debtor can not pay at the maturity of his loan, the creditor acquires the right of making himself at home in his house, and demanding and receiving the best until he is paid. ”