Don't "Go Security."

Te Aroha News, Volume VII, Issue 391, 7 August 1889, Page 2

Don't "Go Security."

The New York Tribune haa an article with the above title, by Ralph Waldo Brown, from which we quote the following :—": — " Having known many cases where - going 1 security br mght financial ruin to the. endorser, I have been led to study t,he subject, and to reach conclusions contrary to those generally accepted. I believe' tint the practice is founded on wrong principle, and that, looked at with calm judgment, it will be seen t«» be utterly al'surd. When two men trade, it is for rimtuil b"nefit ; but if you put your name t> a note, you assume all the risk of< another man's bu mess, with no' voice in Rh management ; . no chance to shaiv the profit, if the transaction provn profitable, but a certainty of having the amount to pay if, through misfortune, rascality, or reckleHs speculation, the maker of the note , fails to meet it. I quote Biadnrreet as authority for the statement that in endorsing notes for n given itain you run a much greater risk than 3'ou 1 would to insure buildings for a like amount ; and yet men wlio would consider the proposition to insure their neighbour's hou^e for nothing, as' utterly preposterous will sign their names to these >-atne men's notes without hesitation. Just laj this down us an axiom : Honest men do not need an endorser, and dishonest men do not deferve one.. There- i,--, too, another yiew of the ' matter generally overlooked, namely, that •endorsing is in a-hirge numlm; of* case* &n injury to the men you endoise for. I have • hud good 'opportunities for fifteent yearn to study iii '•several States the conditidns'oti success, and no ono fact has impressed me, more than that it is the men who begin on a small scale, avoid debt, and allow their , business to grow slowly and naturally who are the substantial men of the day. Going too fast, enlaiging one's business before the capacity to manage it has been acquired by patient plodding, is the cause of: nearly 'all the business failures, an.l when we come to deduct from those remaining the cabes where men have been .mined by paying security debts *ye shall find .that we have accounted for nearly all the business failures. My lemedy for thin' evil is to put all security on the same basis as insurance. There are causes where an endorser seems necessary, and 5 it is ■'a 1 hardship not to have one. Let companies be formed to give official bonds for executors, administrators, officers ; and also •to secure payment of private indebtedness. Let a fee or per centage bo charged ; f6'r>: this, just as is now done for insurance. This.company will make it, their, business to know the ohaiacter and 1 habits "of mcii who ask tor a bond, and this the private citizen cannot do. When there is a loss there will be a fund from which to pity it, and it will not fall on an individual, who will perhaps be ruined by "it. iAS'it .vill require time to make a change so radical as this in bu&iness methods, let me lay down a few rules for self guidance : 1 . No man ought to put his name to anybody 's note because he thinks it a, mere , formalit}, and that there is no possibility of his having to pay. It is the unexpected that hftppens, and a year or two may j wreck' tho fOlf 01 tune of any man ; so. if jou sign' his note do it with a close understanding of your responsibility and a determination ofpayiug it promptly without lawsuit or delay. 2^ No man has a right to put his name to a note which, if * called on to pay, would cripple his business, depiive his family of suppoit/'or; education, or defraud his creditors. -^'n| other words, a man ou&hfc nofto risk thfftf w>hich is riot his own, and certainly his| family has a right to, support un^d^edtic^-l tibn, and his creditors should have a right? to his money rather than some one^\vl\o| has given no equivalent for it. 3. No'lrrih] should endorse for another ,withoi\tvtho^ knowledge and consent q^ his wife.'j&he-! sliould be.considered the business p.irtjaer^ iiv a. higher sen^e that the 'man with whom \ yon o form a business., partnership, 'ahdj'-usj Jitl would be considered djahonpuiuhle to i smn«the- i firm\s Inttine 1 nttine t^ notes,which would ,1 pnduhger ' their Standing,'' s6 lie should | jscorn t^'do' witliqiit'his wife's acqtries"denco | Jthat which risks pnj"perTy"bire*'rms** helped to accumulate, and upon which she depends for support, 4. The in who does not endorse for others must tiot accept an endorser for himself."