IL

THE LAW.

Chapter 326 of the New York laws of 1895, popularly known
as the "Pawnbrokers' Act," provided for the incorporation of
associations for loaning money on personal property in any
county of New York State having a population of more than
300,000 and less than 600,000 inhabitants. Under this act, any
three or more persons in such county might become a corporation
of this sort, loaning money upon pledge or mortgage of personal
property, by filing a certificate in the form prescribed by the
Business Corporation Law (") and a bond equal to one-tenth of
its capital stock, but in no case less than $5,000, with the Super¬
intendent of Banks. Upon his approval, such corporation was
empowered to loan money on security described at a rate not
exceeding 3 per cent per month for a period of two months or
less, and not exceeding 2 per cent per month for a longer period;
also a sum not exceeding $3.00 for first examination of security
and for drawing necessary papers. No loan was to be made
for an amount greater than $200 to any one person. The divi¬
dends of such a corporation were limited to 10 per cent yearly,
and after a surplus of 50 per cent of capital had accumulated,
the Superintendent of Banks had power to reduce the rate of
interest if he were satisfied that such a corporation v^ras making
a profit of more than 10 per cent yearly. No person or corpora¬
tion engaged in the money loaning business on similar security,
except those incorporated under above act, could charge more
than 6 per cent per annum under any device or pretext; and the
violation of this restriction was made a misdemeanor. Upon
proof of such fact the debt was to be cancelled and security made

(■)   Appendix III, page 45.