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DON'T "GO SECURITY."

-. The New York Tribune has an article with the above title, by Ralph Waldo Brown, from which we quote the following: —"Having known many cases where going security brought financial ruin to the endorser,' I have been led to study the subject, and to reach conclusions contrary to those generally accepted. I believe that the practice is founded on wrong principles, and that, looked at with calm judgment, it will be seen to be utterly absurd. When two, men trade, it is for mutual benefit ; but* if you put your name to a note, you assume all the risk of another man's business, with no voice in its management ; no chance to share the profit, if the transaction prove profitable, but a certainty of : having the amount to pay if, through misfortune, rascality, or reckless speculation, the maker of the note fails to meet it. I quote Bradstreet as authority for the statement that in endorsing notes for a given sum you run a much greater risk than you would to insure buildings for a. like amount; and yet men who would consider the proposition to insure their neighbour's house for nothing as utterly preposterous will sign their names to these tame men's noteß without hesitation. Just lay this down as an axiom : Honest men do not need an endorser, and dishonestpnen do not deserve one. There is, too, another view of the matter generally overlooked, namely, that endorsing is iD a large numßer of cases an injury to the men you endorse for, I have had good opportunities for fif« seen years to study in several States the conditions of success, and no one faot has impressed me more than that it is the men who.,b«gin on & imali scale, avoid debt, and allow their bneinesß to grow slowly and naturally who are the substantial men of the day. Going top fast, enlarging one's business before the capacity to manage it has been acquired by patient plodding, is the cause of nearly all the business failures, and when we come to deduct from thoßa remaining the caws where men have been ruined by paying •eoority debt 8 we shall find thai we have Accounted lor nearly all the business failures. My remedy for this evil is to put all security en the same basis as insurance. There are oases where an endorser seems necessary, and it is a hardship not to have one. Let companies be loured to giva pffieial beads for «xeoQtors, administrators, oiacers ; and also to secure the payment of private indebtedness. Let a fee or per centage be charged for this, just as is now done for insurance. This company will make it their business to know the character and habits of the men who ask for a bond, and this the private citizen cannot do. When there is a loss there will ba ft fond irom which to pay it, and it will not fall on an individual, who will perhaps be coined by it. As it will require time to make a change bo radical as this in business methods, let me lay down a few rules for safe guidance : 1. No man ought to put his ■ame to anybody's note beaause he thinks it ft mere formality, and that there is no possibility of his having to pay. It is the unexpected that happeoß, and a year or two may j wuok the fortune of any man ; bo, if yon sign j Iris note, do it with a clear understanding of your responsibility and a determination of paying it promptly and without lawsuit or delay. No man has a right to put his name to a note whioh, if called upon to pay, would cripple his business, deprive his family of \ support or education, or defraud his creditors. • In other words a man ought not to rißk that whioh is not his own, and certainly his family has a tight to support and education, and his creditors should have a right to his money rather than some one who has given no equivalent for it. 3. No man should endorse Jor another without the knowledge and conseat of his wife. She should be considered the bupiness partner in a higher sense than ike man with whom you iorm a business partnership, and, as he would ba considered .dishonorable to sign the firm's name to notes which would endanger their standing, ao he ■corn to do without kis wife's acquiesces in that which risks the property she has iaeiped to accumulate, and upon whioh she depends for support. 4. The man who does bos' endorse for others must not accept an endorser for himself. "

Permanent link to this item

https://paperspast.natlib.govt.nz/newspapers/NEM18890727.2.16

Bibliographic details

Nelson Evening Mail, Volume XXIII, Issue 161, 27 July 1889, Page 4

Word Count
782

DON'T "GO SECURITY." Nelson Evening Mail, Volume XXIII, Issue 161, 27 July 1889, Page 4

DON'T "GO SECURITY." Nelson Evening Mail, Volume XXIII, Issue 161, 27 July 1889, Page 4

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