Financial History Issue 130 (Summer 2019) | Page 26

By Anne Fleming
“Of all the evils to which modern soci-
ety has given birth, there is scarcely one
more insidious, far reaching, and disas-
trous in its effects than the institution of the
money lender or ‘loan shark,’ as he is more
unpopularly known,” a Chicago Tribune
reporter proclaimed in 1908. The reporter
lamented that high-rate moneylenders
continued to plague the city and demand
their “pound of flesh,” despite a recently
enacted law designed to “deal a vital blow”
to the “whole nefarious business.”
With or without legal sanction from the
state, so-called loan sharks found plenty of
willing “victims” among the “great army of
wage earners” in the Windy City, who were
“forever pressed by the need of money.”
Four years later, as the sharks continued
to circle Chicago, another Tribune writer
observed, “It is easy to condemn the loan
shark evil but hard to correct it.” The root
of the problem was simple: “Men, now
and then, must have money.” The hard
part was figuring out how to grant urban
workers access to small amounts of credit
at reasonable prices.
24    FINANCIAL HISTORY  |  Summer 2019  | www.MoAF.org
Over a century later, much has changed.
The laws governing small loans have devel-
oped over time, both reflecting and spur-
ring the ascendance of new ideas about
the proper regulation of the business. The
American economy has also changed dra-
matically, with the growth of industrial,
clerical and service-sector work, along with
the decline of agricultural employment.
Meanwhile, the advent of mass produc-
tion brought down the price of consumer
goods and enabled mass consumption.
The demographic characteristics of those
struggling to make ends meet, “forever