ustxtxb_obs_1963_02_21_50_00007-00000_000.pdf

The new committee’s members are Harvey Davis, S.M.U. law professor; John R. Bryant, a Republican countycourt-at-law judge in Dallas; Bill Burrow,, a Republican attorney in Dallas; J. Edwin Fleming, chairman of the board of the Dallas Bar Assn.; Edney; Jack Garey, former president of the Junior Bar of Austin ; L. N. D. Wells, a senior partner in a Dallas law firm that specializes in labor cases; Edward B. Winn of Dallas, former president of the State Junior Bar; Angus G. Wynne of Dallas, past president of the State Bar ; Paul Barcus, Houston lawyer ; Pete Perez, Fort Worth lawyer; Benton Musslewhite, Lufkin attorney who ran for Congress and narrowly lost; and Hassell. Fritz, the committee co-chairman with Davis, is probably the most active attorney in Texas in the prosecution of usury lawsuits on behalf of borrowers. His article, “How to Handle a Usury Case,” appeared in the Texas Bar Journal last October. He is a former president of the Dallas Jun One reason it has been difficult for the state to prosecute cases against companies charged with usury, according to former Atty. Gen. Will Wilson, is the legislative continuance law. Under this law, a defendant hires a legislator who is a lawyer. If the legislature is in session, under state law a judge is then required to delay after the session ends. “These sharks are old hands at hiring legislators,” Wilson says. “That used to be my nemesis. It stops you. With a regular session, and then a special session . . . We’d just barely get going, and they’d hire ’em.” A regular session, then a special session late in the year can mean a year’s delay in a lawsuit when a legislator has been hired, Wilson says. This session, Rep. Don Gladden, Fort Worth, has been hired in a number of loan cases by companies charged with usury, and as a consequence, continuances have been granted to them. The companies are Signature, Chesterfield, and Texas Indorsement companies, all companies associated with Virgil Moore of Florida and W. Lee Moore, Jr., of Dallas, and City Guaranty Co. Gladden stresses that Moore is an old client of his. for Bar. The Senate hearing on the loan bills this month lasted four hours, but as it worked out, Fritz was left just two minutes to state the committee’s case. Speaking very rapidly, he said: “There is an evilhigh rates of charges by means of credit insurance, property insurance, default charges, and other schemes. The whole point of small loan legislation is to reduce these charges. There’s no point in enacting legislation if you’re going to legitimize the rates you now have. The Reagan bill does this. There is no mandate from the people to enact bad legislation. The bill should set a maximum ratenothing higher than 36 percent.” It may startle some readers to realize that 36 percent is the lowest rate of interest anyone seriously advocates for loans of $100 and under, yet even Will Wilson has come around, reluctantly, to this maximum. Bankers have told Wilson, he says, that they can handle a ten-transaction $50 loan for 13 percent. On auto paper loans, It is of some interest that telephone records that have become part of ‘a court record in Dallas in a case involving usury charges, in which Ned Fritz of Dallas is the plaintiff’s counsel, show that Virgil Moore, the Florida lender, telephoned Gladden several times in 1960 and 1961. \(Moore also called loan lobbyists Vernon Lemens and Floyd Bradshaw and lobbyist Joe E. Winfree ; Sen. Bill Moore, Bryan, is shown by the records to have placed a call from Austin to Virgil Moore in Will the 150 or so of Wilson’s usury lawsuits that are still pending be fully prosecuted by the new attorney general, Waggoner Carr? Carr was elected over Tom Reavley, Austin attorney, who had been known for his support of a 36 percent interest limit and therefore incurred the opposition of small lenders. Carr’s finance law division is presently headed by Gilbert Hargrave. Hargrave says of Carr and the loan cases: “He has decided that we’ll not drop the program. We are going to push these cases that we have right on through with vigor. . .. We’re negotiating on this whole bunch, to give ’em a chance to settle first.” they are making 20 percent, so they net about seven percent. Since the small loans in question are unsecured, Wilson reasons, “when we drew a bill, I finally got reconciled to three percent a month.” In Dallas, Fritz amplified for Observer readers the positions he would have presented to the senators, had he been given the time. “Why,” Fritz asks; “should we enact a bill which would legalize speed limits of 200 miles an hour, and double the number of police radar sets? Nobody’s going to drive more than 200 miles an hour, so why spend the state’s money? Why have regulation at all?” People should not be permitted to specialize in a field that is “antiTexan, anti-economical, and anti-social,” he said. Loans of less than $100 are not necessary or desirable, he said. Out of thouands of cases he has handled for borrowers during the last 14 years, he said, he has encountered only one person whose outstanding small loans, plus unpaid outstanding debts, totaled less than $100. Neither is it true, Fritz said, that all borrowers of small sums are in necessitous circumstances. They fall, he said, into three other groups: people who are ignorant and just can’t figure out money matters; people who might be able to figure out such matters, but have very poor foresight; and people who have ,a tremendous, overpowering desire for something money buys”alcohol, two girls on the stringa young wife that demands excessive material compensations.” Sometimes, he said, a doctor who will not extend credit on an emergency case is to blame for a small loan. The charges on a $25 loan for three months in Texas now is $11. Borrowers often have several such loans outstandingthey are sent around to different, cooperating lenders to make a number of them. Fritz makes the point that a borrower with four of these $25 loans gets his $100 for three months for $44; while if he borrowed $100 for an entire year at 36 percent \(on the declining balance, about $20 to get the same amount of money four times as long. Four $25 loans, each renewed after two months, would cost a borrower $264 in one year, he figures. The principal going devices for running charges this high, Fritz said, are February 21, 1963 7 Will Wilson: ‘It Stops You’