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was only 120, while their record of arrests runs by months as follows: Jan., 7; Feb., 4; March, 12; April, 3; May; June, 1. During May only ten men in all were arrested on executions issued out of the Second, Fourth and Fifth District Courts, and during June only nine. That this is only a temporary lull in the business is shown by the renewed complaints of the activity of the dealers that began to come in during July and August. There was a similar period of quiet succeeding the bitter fight made against them just before the time of the Chandler bill, but they were soon more active and more reckless in their lawlessness than ever. Only let the Legal Aid Society and its ever active head attorney relax their vigilance for a little time, and we shall see, as is already indicated, a return to the conditions of the last few years. It is needless to say that the Legal Aid Society cannot spend all of its time in fighting instalment cases. Moreover, it would be far wide of the mark to assume that the condition of the past few months, while much improved, is one that any civilized community can afford to tolerate.

It may well be wondered whether, with all this tremendous volume of business constantly passing through the courts, the relations between dealers and courts have been above reproach. Evidently one should here speak with the greatest of care. To the credit of the judges now sitting in the Fourth and Fifth Districts let it be said that while accusations of unfairness are not lacking, those best in a position to know and whose judgment is worth most, speak in terms of praise of their efforts to prevent legal abuses from creeping into their courts. But as regards the Second District Court, in which the enormous business of the Strombergs and Charles Ludwin has been principally carried on, it is openly asserted that it is practically impossible to win a case against a dealer in this court. I present this allegation for what it may be worth. Moreover, the other justices, even if they be given full credit for the most upright intentions, cannot, in my opinion, be wholly freed from blame. The pressure of business is given as an excuse for not entering fully into these cases. Which is more important, simply to expedite business, or to do justice? Where two litigants are as unequal in every way as the instalment dealer and his ordinary debtor, certainly in the interests of substantial justice it is necessary that the defendant be given all possible opportunity to present his case. And where no defendant appears, in which case there is a strong presumption that he has received no summons, and where, moreover, it is perfectly known to the court that the plaintiff makes a business of bringing suits for

illegal purposes, a judge can scarcely be said to do his full duty unless he takes all precaution to give the defendant every possible chance, and unless he require the plaintiff to furnish the most convincing proof of guilt before pronouncing the judgment. Certainly no man acquainted with the practice of the municipal courts and their perfunctory manner of hurrying over instalment suits can maintain that this requirement is complied with even passably well.

In the preceding paragraphs I have tried to point out the following facts regarding the “fake” instalment business: It is carried on by a small class of men who stand low in the scale of social, educational and moral development. They handle chiefly shoddy and worthless goods, the sale of which they force by every dishonorable artifice known to trade. Thus the business is wholly bad, even from the economic standpoint. In addition to this injury, grave enough in itself, the dealers have systematically cultivated the prosecution of a large number of suits, in order to get cash on instalment contracts. In carrying out this purpose they have flagrantly misused the machinery and the processes of law, committing daily perjury, buying marshals, corrupting courts. As a result they are breeding hatred for law among a class of people who especially need respect for law, but who are compelled to look upon it as made for the oppression rather than for the defense of the poor and weak. The corruption of "fake" methods to an increasing extent taints the low-grade business until it is becoming hard to tell where one leaves off and the other begins, and the ordinary observer lumps all the business together as ill-concealed robbery, and all the dealers as virtual highwaymen, an attitude which does the gravest injustice to all the high grade dealers and to most of the low grade ones.

One important phase of the "fake” business has been lightly passed over in the preceding description, and for that reason it is desired to bring it out here with all possible emphasis. That is the habitual and widespread dishonesty of purchasers. As repeatedly stated, jewelry, the best form of pledge, is sold almost wholly to Italians, who are inveterate pawners. The more shrewd among them were not long in finding out that an easy way to make money was to buy a $20 watch for $60 on a payment of one dollar, pawn it perhaps for $10, and move away. The result is that any instalment dealer who does this class of business will display a large pile of his "leases” which represent runaway accounts, and will tell long stories, mostly true, no doubt, of his vain search for dishonest debtors who have eluded him. While a careful study of this matter would

require such access to the books of the dealers as I have not been able to obtain, I am of the opinion that a rather increasing proportion of goods is being bought without any intention of paying for them. Instances of men being found with ten or a dozen pawn tickets for goods bought on the instalment plan are by no means unknown. The system offers every encouragement to dishonesty to the man who is shrewd enough to take advantage of it. Accordingly, while the matter has been dealt with in few words, I seriously question whether outside of the disregard for law engendered by the abuse of law, there is any of the social effects of the traffic more pernicious than its encouragement of dishonesty by persons shrewd enough not to get caught.



So much, then, by way of description. By way of analysis and suggestion, where shall the line be drawn between legitimate and illegitimate business, in what way shall the blame for the illegitimate business be apportioned, and what measure can be taken to remedy its abuses? To the first question I should answer without hesitation that any instalment sale at a price not absurdly high, made with a reasonable expectation of collecting the agreed price at approximately the specified time from a buyer unconstrained by fear of legal process, is a legitimate sale. On the other hand, a sale in which payment can be expected only as the buyer is compelled to pay either by suit or by the fear of suit and arrest, is illegitimate. In other words, the legitimacy of an instalment sale depends on the basis of the credit. If based on the habitual honesty and business training of both debtor and creditor, it is legitimate; if on the buyer's fear of legal process, illegitimate. Hence any sale to a man or class of men known to be habitually dishonest is ipso facto illegitimate. However theoretical these considerations may appear, they are vital to an intelligent treatment of the practical problem of reform. To attack legitimate credit is worse than futile. On the other hand, business based on illegitimate credit inevitably leads to abuse.

The fundamental vice of the East Side instalment business, then, is economic. It is an altogether unprecedented extension of credit among a people utterly untrained in the first principles of business, and by a class of men many of whom are thoroughly dishonest. Therefore I make bold to say that the only way to reform it is by destroying a considerable part of it and by re-establishing the remainder on another and sounder basis of credit. Observe that no attack on legitimate instalment business is intended. Whether we regard this methodi of sale as a bad thing or not, its abolition is clearly impossible. But the sale of jewelry, watches and ornamental goods of bad quality to socially undeveloped people who have no use for them, upon liberal terms of credit, is economically wrong, and, under existent conditions in New York, extremely injurious to society. Legislation should, if practicable, be directed toward making such sales impossible. It may be urged, and indeed often is, that we have no right to assume any part of our population to be so weak as to require a species of tutelage to prevent them from reaping the fruits of their own folly. Quite true; and likewise true the fact that a very considerable portion of our community, and that portion constantly recruited by new legions of ignorant and helpless men from foreign countries, does stand in need of just such protection. It is no assumption, but a fact demonstrated by a mass of evidence of which I have sketched but the outlines. Whole volumes of argument as to what ought to be true concerning a people cannot blunt the force of the obvious fact of what is. It is puerile to say that these people ought to be able to take care of themselves. They cannot do it. A perverted form of economic life is working the most serious social injury. No one but the veriest doctrinaire will deny that it is the plain duty of the legislature to destroy that perversion, if possible.

The evils of the business may be roughly classified under three heads : economic, the buying of useless things, the paying of very high prices and the loss of considerable sums of money by the poor; legal, all the abuse of the processes of law, corruption of marshals and courts, extortion under the forms of law; and social, the systematic cultivation of dishonesty and hatred for the law as well as the generation and nurture of deepseated social and racial antipathy. Addressing ourselves now to our second question, who or what is responsible? It is easy to answer, the wickedness of the dealers, but the answer is superficial. The first large cause is this, that competition has stretched credit to the breaking point. Unlimited and unregulated credit, working under conditions of general ignorance, poverty and small moral development on the one side, and hardly less ignorance and hardly more moral development on the other, but combined therewith greater shrewdness and more of the power of money-working under such conditions, it has wrought havoc and must always work havoc. The dealers should not be blamed too greatly. As one comes to know them,

he comes to question seriously whether they are deliberately and consciously wicked according to conventional standards, so much as simply undeveloped morally. Evidently enough, the only remedy for the concurrence of economic and social conditions that are at the bottom responsible for the traffic, then, is education-economic, legal and moral. But this does not say that nothing can be immediately done to remedy conditions.

The immediate responsibility for the legal abuses mentioned must be laid at the door of the city marshals and their assistants and the judges of the municipal courts. The working of New York's system of city marshals is disgraceful. Whatever improvement may come from the operation of the new municipal court law, it has not yet had time to appear. Certainly the marshal system demands reform and is a matter of great importance, especially to the poor, who are often so directly affected by its workings. The proposal that marshals be paid a salary instead of fees, in the hope that a better class of men may thereby be secured, and that the temptation to do all sorts of business simply for the sake of the fees, will disappear, seems in many respects excellent, but it will not put the marshals wholly out of partnership with the "fake” dealers. Improve the character of the marshals as you will (and some of them now are excellent m'en), and unless you secure a class of men far superior to any class yet found in minor public offices in New York, there will still be some of them in whom the promptings of immediate self-interest are far too strong for their sense of public duty, and an occasional “present” from the dealer will make things all right. The suggestion that no marshal serve a body execution unless he has himself served the antecedent property execution, is not without value, but what will be its use where the marshal swears falsely to the service of both the original summons and the property execution? I believe it is safe to say that no possible reform of the marshal system will absolutely break up the alliance between some of the marshals and the dealers.

The measure of responsibility which, in my judgment, attaches to the muncipal courts, has already been indicated. Here again, no comprehensive reform is possible. The proposal that no inquest be allowed in instalment cases is so revolutionary that it has not been seriously made, and no other reform proposition, so far as I know, has been put forward. It cannot be said that if the judges used greater care, justice would be done. Let the judge be ever so careful, give him plenty of time, instead of crowding his calendar with five thousand cases a year,

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