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What the

:-;,VOR CEs ' r ER M A G AZI NE

Earning Capacity-A Basis 0. CreditNow Assured Worcester Morris Plan Company Will Have to Offer-Some EcoReasons for Its Existence and Its Method of Operation Presented in Concise

, is to hnve aand s;I\'ing11 it is nowForm-The Solution of the Small Loan Problem

CONTRIBUTEDa n ;lSSlll,('tl fu ct thnt W orc es t c:: count ry 11

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D8 'VVO RC E STER l\IAG_\ZIN Ery or an a rt icle of clothing, an d could secur e a sm allloan to ti de him OVCI' an eme rgency. Befo re this society entered the field, th e victim of circumstances,who was compelled to pawn his t rc usu rc, had t o paya very hi gh ra te of in ter est and often suffer ed th eJoss of th e a rticle pl edged because of his inab ility tored eem it. The su ccess of th e Pr oviden t L oan Societyis best attes ted l:i y th e f act that in th e ye ar 1913 it sloans, ave ra g ing less than $33.00 each, t otal ed $17000,000, Th e fact that it pa ys in tcrcst. at six per cent.on its certificates of indeb ted ness an d ha s ac cumula te da lar ge surplus is su bst antial evirloucc of what canbe done in th e field of sociological effort if d evelopedon a sound f oundati on an d conducted on a strictlybusiness basis.Th e work of this society has been supplemen ted byth at of other ch attel loan societies whi ch, as theirnames imply, mak e loans on pawns of hous eh old effe ct s and other secur-ity of a Iikc character. Th e opera t.i on of th ese soc ieties is either wh olly 01' scmi-ph ilanthropic ; th ei r in teres t charges from one and a half t oth ree pel' cent. a month , Th ey ha ve unquestion ablyaccompli shed a grea t deal of good, bu t th e volume ofth eir busin ess is limited an d th ey do not touch th elarger field wh er e ult r a-usury con t inues to thrive.N OI' do th ey in any wa y serve th e small mer ch ant inth e finan cing of his business.Much has been sa id a nd written regardin g the sociolo gical serv ice of th e Mor-ris Plan sy st em of loans,bu t if th is soc iological service constituted its exten t ofusefuln ess it would no t appeal to the' hard -headed business man as mu ch as it wou ld to th e sentimen talist.Th e Chambers of Com merce and other business org anizations are lending every effor t to provid e bet terfacilit ies to th e man u facturin g, wh olesale, and r etailin ter es ts within th ei r community. \Vith comp aratively few except ions all business houses carry unusuallylarge lines of cred it Oll their books. Ima gine the service of an instituti on wh ich will enable th e sm nll mer chan t to ta ke advanta ge of his discounts, an d to repay t ha t institution weekly f rom th e proceeds of hisbusin ess! A sho rt time a go, fo r inst ance, one of th eMorris Plan companies in a southern cit y afforded th emeans for installing an elev at or in a ret ail es tablishment. I t wa s impossible f or th e merchan t to secureth e necessar y fund s f ro m a comme rcial ban k , yet withpropel' endorsem ent of his not c by tw o fr i en ds he wa senabled to borr ow th e ncccssarv fund s on th e MorrisPlan. Wholesal ers li kewise fincl th is in st itut ion of infinite service. The sm all grocer , th e butcher , th e stationery s to re and ot her reta il osta blish merits find itpossible to repleni sh the ir sto cks or t o ex tend th eirbus iness by th ese f ac ilit ies, ma kin g it possibl e forthem to rep ay th e Mor-ri s Pl an company a prescribedsu m each week hom th e proceeds of th ei r business.I t has been rep eat edly stated thut tho rcta ilcr s oftoday per fo rm t o a consider able deg ree what is essentially a bankin g bus iness . This is tr u e, an d hasbeen the ou tg rowth of keen competition, but it als oprovides th e pu rchasin g' public with a means to sat isfyit s immediate need s with a d rfelTed paym ent. Thispract ice has been re sponsible for and stimul at ed thegrowth of th e in stallmen t house'S. Many such inst ituti ons conduct a questionabl e business in that they areparas it es on th e industrial cla sses, The inst alimen tre ady-to-wea r shops soi-vc a us eful purpose at times

by enabl ing a p erson employe d in an occupati on r equiring a ne at personal a ppea rance but wh ose clothesha ve become sh abby 01' th r eadbn 1'(' t hrough cons ta n tse rv ice, to p ro cu re new wearing' a pparel. Th ese ins ti tuti ons mak e it possibl e f or tho small sal a ried cl assesto clothe themselves by pa yin g f Ol th ei r purchasesweekly, but th e good th ey do is many t imes offset byth ei r deception in values. In mau y case s their merchandisc is sadly intci-ior, t heir p rofits unreas onablylarge, and th ei r a d vertisin g di sp layed ill vivid andalluring catch-plu-ases . Yet a Jal'ge part of the purchasing public is attract ed by th ei r call an d throughth eir fr a udulen t methods , Th e Morr-is PLan com panycomes into a community and en ables th c honest andtrus tw orthy citizen to secure cas h f or ma k in g suchpu rchas es an d; t o re pa y th at instituti on on terms consis tent with hi s ear n ing powe r.

TH E OPERATION OF TH E " MORRIS PLAN "In ord e r to illust rat e how a Joan is made, let usassume a loan of $50,00. The b or-rower mus t first satisfy the ins t itution tha t he ha s ac t ua l need for a loan ;that he has a st eady ea r n ing pow er, and that he canget two r espons ible pe ople, wh o may he in t he em

ployed cla ss to endorse h is not e. H e t hen fills out anapplication blank re quir ing answers to a list of pertin en t questions such as th e amount of sala ry , wa ges0 1 in come, by wh om employed and the len gt h of tim ein said emp loyment , a f ull list of his debts an d t owh om owed. 'I'he tw o c o-mak ers must ans wer a simil a rlist of qu estions, I f th e applicant and hi s endors ersfumi sh sa t isf actor y state ments whi ch npon being inquired in to prove to be t rue , th e applicant is requiredto sign a n ot e which must also be s igned by his comakers. H e t hen r eceiv es his money- in this ins ta nce$50.00 less a di scount of six pel' ccnt. , re sulti ng in hi sobtainin g $47,00, f rom which would be ded ucted aninv estigation fe e of tw o pel' ccnt., making th c net payment t o him $46.00. In accordance with the terms ofth is no te he su bsc r ibes to w ha t is kn own as a " ClassC" I nstallmen t Cert i ficate of In vestm ent in the denomination of $50.00, which he agr ees to purchase bypaying a d oll ar each week. Th is certifi cate is hypothcca ted as security f or hi s no te and as a prot ec tionf'or his co-mak ers . His co-make r'S arc, of course , li abl ein case he fail s to pa y, but th ey re ceive th e ben efit ofthose payments which he has mad e up to th e t ime ofhis def ault and simply continu e t he w eekly pa ym ent sin hi s stead un ti l th e debt is . l iqu idat ed . I f th e pa yment s are mad e in accordance with the terms, at theend of fifty week s he shall hav e acquired an as set of$50.00 which two week s lat er, wh en t he note is du e,may be utilized to cancel hi s li ability, I t will be observed th er efore tha t these we ekly paymen ts a re notmad e against th e loan but agains t 11 saving certificat e,'rhu s the bOITOWel' has th e option of payin g his notef ro m any other source. I f th e " Class C" inst allmen tcertificate is used to cancel th e loan the tr an sactiont hen tc rruina t cs ; if, on th e ot her hand, th e sa ving iscontinued th e inst allmen t cc rt ificate " Class C" is th enconverted into a full y paid up " Class B " cert i fi ca te.On th e latter certificat e in terest a t th e rat e of five pel'cen t, per annum is all owed . Sh ould th e holder of a" Class B" cc rt i fica te desire to bOlTOW any amoun t upto its fully paid- up value, .h c can do so at an y tim ewithou t endorser s or any other collatera l. The " Class

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99V O R C E S T E RB" certificat es all t h i r ty (lays' noti ce can b e ca shedin at anv t im e at th ei r f uco va lu e. F or t he man whomay nat he abl c to ill Vl 'st in a fu lly pa id u p " ClassB" certifi ca te t he Manis I'lun permits h im to purch as e a C a ~ C " in st a lluu-nt cc rt ifica t c by payin g$1.00 a wr-ck f or fift y W('('];s a nd allo wing' hi m fo u l'pel' ce nt , iu tr-rcst aftr-r h is t wcnty- fit th pay meu t h asbeen m ad o.Th us t h ~ o l ' l ' i Pla n S(,I ' I'('S a do uble pu rpose. I tena bles t h(' industrial classes to borr ow to meet t heireconomic llt' l'ds, a nd it p rovid e's a means fa)' convo rt ingrh c hot-row er iuto a sa ve r. This inv est mon t fea tu l 'phas al read y performed u rc ru a rka blc service in enco urag uur an d d ('w lo pin g a sp i ri t of t.hrif t, and toeV('I'V conuuu ni t v t ho Mor-r-is Plan mea ns t hc dev elopmont of a h i s tandard of oit izcus bip ,

THE ] < i\Wmw.; PLA:'\ COM P AN YTh 0. W or cester Mon ' is Plan Compa ny n ow in th eprocess of ius t a lta t iou has a ca p i t a l stoc k of *100,000divid ed in to sha rI' S of t ho pal' value of $100.00 ea ch .

lt s or ganizat i on co uuuitto, which had gu id ed an ddi rected t hc re p resen ta t ives of th c Iudnsu -ial Fin an ceCo rp o r-ation of ?\0.II' Y or k City in th e wo tk of or gan

:M: A G A Z I N Eizin g th e company in t his city, is composed of ma nyme n mos t prominent in th e profess iona l, in d ustr ialan d civi c lif e of W o rcester. It s personnel is as f ollow s :

Fr-ed eri ck B. Wnshburu , Chairman, 'I 'reas. Wo rcest or Fi ve Cents S avin gs B ank ; Cha r- les P , Ad ams, Kin s)