Roger Clawson - Fits-In-Pieces

Making law is like making sausage, goes the adage. Neither should be witnessed by those with weak stomachs. Making law in the street has the advantage of being exposed to fresh air and sunshine.

All those guys with clipboards seen standing outside Walmart and in the library foyer are gone, but the signatures they collected have been translated into initiatives and constitutional amendments.

Thus, without the Legislature or its slow-moving process, citizens who say “there ought to be a law” can make their wish come true.

Stevie Moe, who majored in political science, nursed an urge to become involved in politics through her college days. This year she found an easy entry via the initiative process.

She chose to work for the passage of I-164, a referendum to cap the interest charged on payday and car title loans.

The brokers of payday loans advance cash and put a lien on the borrower’s paycheck. When payday comes, the loan shark is paid first.

(Note to the editor: Maybe “loan shark” is too harsh. I’ll try to do better.)

With car title loans, the borrower signs over the title to his car in return for cash. If the borrower fails to repay the loan, the loan tuna repossesses it.

Moe tells of a colleague whose son borrowed money to buy college textbooks. The Big Tuna snatched his car.

Credit card holders who have seen their interest rates climb past 30 percent might consider themselves lucky. The guys who make payday and car title loans charge 300 to 650 percent. The average in Montana is 400 percent, Moe says.

Soldiers, sailors, college students, the elderly, handicapped and disabled people and welfare recipients are the targets of these loans. By and large, the tuna leave Republicans alone.

“You will see them hanging around campus on registration day, cruising bars on Saturday nights, prowling Indian reservations and soliciting anywhere their favorite prey gathers,” Moe says.

“I was visiting my mother in the hospital. When I came out, there was a payday loan flier on my car.”

Twenty-six states have capped interest on these loans. The loan tuna are mostly from out of state. The lenders extract $9 million a year from Montana, Moe says.

Often a borrower lacks the cash to make a payment. The tuna will and he will let them extend the loan. The old note is torn up and the borrower signs a new one for a larger amount with a larger payment.

The borrower (who could not make the original payment) is on his/her way to losing a car or paycheck.

Populism blossomed in Montana near the turn of the century. The Anaconda Co. and Montana Power Co. (known collectively as “the company”) had captured the Legislature. Its members were bought and paid for. Its interests were the company’s interests.

While Anaconda made $20 million a year (roughly $200 million in today’s dollars) the state collected $13,000 in taxes – less than seven hundredths of one percent. The company’s tax bill was smaller than that of some of Montana’s larger ranches.

Gov. Joseph Moore Dixon, a populist and the best governor Montana ever elected, vowed to take on the company. He drafted Initiative 28, which allowed a 1 percent tax on larger metal mines.

In 1924, the metal mines tax initiative passed by a 6-to-1 margin. The next year Anaconda’s net tripled. Montana collected $300,000 – 22 times the $13,000 collected before the initiative but still less than 1 percent of the company’s net.

Dixon ran for re-election that year and lost. Populist farmers, workers and women pushed Initiative 28 in the state’s several counties. The governor had no such corps. The company owned most of the state’s newspapers. In the day before radio and TV, he received no mention in most.

Gov. Dixon died in 1934. He had served as U.S. senator, U.S. representative and governor – the only person to fill all three offices.

He also managed Teddy Roosevelt’s Bull Moose Party campaign for president.

His proudest achievement remained the passage of the metal mines tax.