INTRODUCTION.

The facts hereinafter detailed have been collected by means of personal conversation with business men, instalment dealers of every sort, from the best to the worst, employes of the dealers, their customers, city marshals and their assistants, jail and court officials, attorneys and representatives of legal organizations having intimate acquaintance with the abuses of the instalment business, charity workers-in short, all classes of persons who would presumably throw any light on the subject. Jail and court records have been examined, in many cases in the greatest detail; court proceedings have been followed with care. All sorts of documents and papers used by the dealers have been examined. Matters of price and value of goods sold have been the subject of study. The object has been to make as careful and comprehensive an investigation as possible, showing in a general way the scope of the instalment business, and describing more carefully the remarkable abuses that have grown up in connection with it, endeavoring to trace them to their causes and suggest, if possible, the most direct and practical means of doing away with them. For the opinions and conclusions suggested, I am solely responsible, though I am happy to find myself in substantial agreement on most points with nearly all who have made a careful study of the question. My special effort has been to avoid indiscriminate condemnation of all instalment business, to point out what distinguishes the legitimate business from the illegitimate, and to find, if possible, the practical way of attacking the latter without interfering with the former.

I am indebted to a large number of instalment dealers for their kindness in giving me the information at their disposal, and especially to some of the larger instalment houses. In some cases they have gone so far as to give me access to their books. Also Mr. Moen, the Under-Sheriff of New York County, has put me much in his debt by placing the jail records at my disposal, and the clerks of the municipal courts have kindly given me all facilities for examining their records. For a large part of these favors I am indebted to the interest and intervention of Miss Rosalie Loew, Head Attorney of the Legal Aid Society, who has co-operated with me in every way possible, even doing much

actual work of investigation and placing the results at my disposal. I desire to say, however, that Miss Loew is in no way responsible for any of the views expressed in this report. My hearty thanks are due to her for her ever-ready assistance and suggestion, and to Mr. R. C. Ringwalt, of the same Society, whose advice and suggestion were of especial value in beginning the work. Too much cannot be said in praise of the work of the Legal Aid Society for its fight against the abuses existing in the instalment business.

THE "FAKE" INSTALMENT BUSINESS.

I.

SURVEY OF THE INSTALMENT BUSINESS AS A WHOLE.

The instalment business, the sale of goods on a system of weekly or monthly payments, has had a remarkable development in New York. As in every other great city, the force of competition and the efforts of merchants to extend their trade among the less wealthy classes of consumers, have resulted in more and more liberal extension of credit in many lines, until at present a large part of the trade in house-furnishings, sewingmachines, books, pianos and some other goods is done on the instalment plan. In addition to this there has grown up in New York a perversion of this method, depending primarily upon a most outrageous misuse of legal process against the poor and ignorant among the non-English speaking immigrant population.

Conscienceless agents of conscienceless dealers have wheedled the ignorant into buying goods they did not need, usually jewelry, at prices ranging from two to twenty times their value, the amount to be paid in small instalments. The dealers have arranged it so that the customers have skipped a payment; then they have descended upon the luckless buyers and demanded immediate payment in full. If their threats did not secure payment (and frequently they did) suit was brought, by a piece of trickery on the dealer's part the defendants did not appear, and judgment was entered for the specified amounts. The immigrant was then arrested, perhaps pulled out of bed in the early morning, and haled off to jail by a corrupt marshal, the creature of the dealer. Usually at this stage the fear of prison overcame the victims and they borrowed right and left from their friends, and bought their freedom from jail by paying what the dealers demanded. But if obdurate there has been nothing for them but to lie weeks or months in jail-their term as prisoners for debt.

It is this perversion of the instalment method, this "fake" business as it is called, that has been the primary occasion of the investigation of which this monograph is the written result. Curiously enough, nothing even remotely resembling this phe

nomenon is to be found anywhere else in the United States. A correspondence reaching to a dozen states and covering the principal cities of the country fails to disclose any parallel to the conditions existent in New York during the past half dozen years. The cases of injustice and serious loss to the poor through instalment sales have been all too common everywhere, yet nowhere else, so far as can be learned, have there been the systematic sale of worthless goods at high prices, the systematic use of legal process as a means of unblushing extortion, the systematic imprisonment for debt and for no debt, the systematic corruption of public officials and courts, that have made the instalment business a hissing and a by-word all over the East Side of New York. For this remarkable fact I can offer no better explanation than the observation that there has been nowhere else just the combination of legal and social conditions that prevail in New York, and the further consideration that almost the only mode of transplantation would be by the migration of some of the dealers to other cities, a thing that has not occurred hitherto, partly, perhaps, on account of their large field and great profits in New York.

To consider this "fake" business intelligently, it is necessary to begin with a survey of the whole instalment system. In making such a survey we must distinguish at least three classes of instalment business, which I shall call the high-grade, the lowgrade and the "fake" business. By the high-grade instalment business, I mean the trade carried on chiefly with middle-class people by large concerns selling house-furnishings, books, pianos, and to a limited extent, sewing-machines-such houses for example as Cowperthwait & Sons, the subscription department of Appleton's or Scribner's, the Pease Piano Company, and in a certain limited part of the trade, the Singer Manufacturing Company. By the low-grade business I mean the traffic in all lines of useful goods, such, for example, as furniture, household wares, clothing, sewing-machines, steamship tickets, and a thousand other articles, carried on chiefly through peddlers by a large number of small dealers, located mostly on the East Side, and doing business principally with a much poorer class of customers than the firms previously mentioned. By the "fake" business I mean the sale of jewelry and all sorts of useless ornamental gewgaws and articles of luxury at absurdly high prices, usually to the lowest class of the immigrant population, largely the poorest and most ignorant Italians, together with the great number of suits springing out of such sales. It is this which is commonly meant when the instalment business is referred to on the East Side.