To send a telegram, you or your messenger must take what you have written to the nearest telegraph office.
You may write a telegram on any kind of paper, provided always that the writing is plain.
All telegraph offices are provided with regular blank forms, which may be had without cost, and it is better to use these when they are available.
The blank is properly ruled, with lines for the date, for the address of the one to whom it is to be sent, and for the message.
The telegraph company charges a fixed sum for a message of, say, ten words. These words do not include the name and address of the sender.
The amount of the charge is always dependent on the distance between the office from which the message is sent and the one at which it is received.
Every word over ten, in the message, pays an extra fee, dependent again on the distance.
Getting just what you mean into ten words may seem difficult when you have a lot to say, but it is surprising how you can boil the message down when each additional word costs five or more cents.
It may pay to practice this.
If it is actually necessary to make your meaning clear by the addition of more words, do not hesitate at the cost.
If you are known at the telegraph office, you can send a message to be collected from the receiver.
Never permit the receiver to pay for a message that is exclusively on your own business.
Always make and keep a copy of every important telegram you send away. Do not neglect this.
If you have neglected to keep a copy of a telegram, or having made one have lost it, you may get a copy from the telegraph office, provided the application be made within six months of the sending of the message.
Telegrams are delivered by the company's messengers.
You must give receipt to the messenger on the delivery of a telegram.
Where the receiver lives a long distance from the telegraph office, it is customary to pay the messenger an additional fee, depending on the distance.
The charges for telegrams to be sent at night and delivered in the morning, are much lower than for day messages.
For an additional charge, less than the original, messages may be repeated back to insure their accuracy.
Read over to the official, or still better, have him read your message over in your presence, that you may be sure he understands it as written.
You cannot hold others responsible for your own mistakes.
You can telegraph money with as much safety as you can send it through a bank.
In handling money in this way, the telegraph company does not act as a banker but as a carrier.
Telegraph money orders are a great convenience, when one wants to send cash to a distant point in a hurry.
Country telegraph offices do not, as a rule, transmit money; that function is left to the offices in the larger centers.
One wishing to "wire money" will find at the telegraph office suitable blanks; they are furnished gratis.
On lines provided for the purpose and properly indicated, as in a postal order form, write the name and address of the person to receive the money, with the amount.
This paper, properly signed, is handed to the clerk with the money to be sent and the fee for transmission.
The fee is double that charged for an ordinary message of the same length.
If, for any reason, the person to whom the money is sent cannot be found within forty-eight hours, the money is returned to the sender, but the fees are retained, as the company is not to blame for failure.
The receiver of a money order, if unknown, must identify himself as he would at a bank, and he must receipt for the money.
If the person to receive the money is an entire stranger in the place to which the money is sent, the sender knows it, and he provides for the situation by signing, on the reverse of the application, an order to the distant operator to pay the money to the person named within, without further identification.
When a telegraph operator receives a money order, he at once seeks out the person to whom it is sent, and pays the money in accordance with his instructions as to identification.
The telephone, local and long distance, is fast superceding the telegraph as a medium for speedy business communications.
Its use is not confined to large cities as at first.
Nearly every village is now in communication with the outer world through the telephone.
The world has just awakened to the needs of its food producer, the farmer.
In Norway, which is not a rich country, the telephone has been introduced on the farms. The rates are low and the benefits are inestimable.
On our large farms, in the West, telephones have been in use for some time as an essential part of the machinery.
Now, there is a move on foot to make them available for every farmer in the more settled regions.
While business can be conducted over the telephone, as if the speakers stood face to face, yet such transactions not being recorded, will not stand in law, if one of the parties should dispute the other's word.
There are two kinds of expresses, viz.: local and general. The names describe the provinces of each, though a general express may do a local business.
All express companies are common carriers.
The carrying business done by our express companies is enormous. They have their own special cars attached to passenger and fast freight trains, and their goods are given special departments in water transportation.
If living between two towns, it is always better to have your letters and express business done through one office.
When ordering material by express, make sure that you give the address, to which you wish it sent, in such a way that a mistake on the part of the forwarder will be out of the question.
If you send away goods by express, make sure that they are securely packed, and be equally sure that the address is clearly written and in a large hand. It would be better if the address could be painted on with a brush.
If you should send perishable stuff, like meat, flowers, glass, or fruit, be sure to label the package "perishable" or "Handle with care, glass."
On long distance transportation prepayment is required; on short distances it is optional.
It is always better to get from the express agent a receipt for the matter taken in charge.
Take care to put your own address on the lower left-hand corner of the package to be sent.
If the person to whom the parcel is sent cannot be found, the address will enable the express company to notify the sender at once of the fact.
When sending any goods by express, it is always prudent to notify the person for whom they are intended of the fact by mail, and also to state the company by which the matter was sent and the date of shipment.
The express company must always require, on delivering goods, a receipt from the receiver.
If the goods should be received by a second person, on behalf of the consignee, he must sign the consignee's name, and under that his own.
If a package appears to be damaged in transmission, the express company must permit the receiver to examine it before signing. He may refuse to sign or to accept in any way, if the goods are injured, or not as he ordered.
Express companies are responsible for all damages sustained by goods while in their charge.
All the large express companies have the machinery for collecting accounts and notes whenever they have branch offices.
Such companies are reliable collectors. Their services are prompt and their charges reasonable.
Where an express company fails to collect, notice is promptly given with the reasons for failure.
When you wish an express company to collect, it will be necessary for you to make out a statement of the account. This is placed in a special envelope, provided by the company. It is properly indorsed and handed to the company's representative.
The company charges a small fee for collection, whether it succeeds or not. In any case the fee is not much above a fourth of one per cent, unless there should be unusual trouble.
As you know, C.O.D. means "cash on delivery".
Cash on delivery orders constitute no small part of every express company's business.
When goods are forwarded in this way, the sender furnishes with the goods an itemized bill duly receipted. The express company's charges should be included in the bill.
The express agent is sure to collect the bill before he lets the goods leave his keeping.
Should you desire to send money by express, it will be well to go to the company's office before you pack it up.
Express companies have special receptacles or envelopes in which to store coin or bills. There is no charge for these.
The sender must himself seal the packages containing the money, and write on them the address of the consignee, also the amount enclosed.
Having received the packages, the express agent ties them up, affixes his official seal, which is so arranged that the package cannot be opened or tampered with, without breaking. This done, he gives the sender a receipt. This should be cared for as a vital part of the record.
The charges for sending money by express may or may not be paid in advance. They vary with the amount to be carried and the distance.
Packages of money are receipted for in the usual way. They are delivered only to the legal consignee, unless a second person should appear with an order, amounting to a power of attorney, and which the company cannot reject.
The foregoing by no means limits the express company's usefulness or field of opportunities.
Express companies issue money orders much as does the Post OfficeDepartment.
As with the post office, the fees for orders vary, but no order is issued for more than fifty dollars.
If you want to send such an order, the express company will furnish the proper blank for you to fill out.
On this form must be written out very plainly the name and address of the person to whom the order is to be sent, with the amount, in words and in figures.
On receiving the money the express agent gives to his customer two papers; one is the company's receipt for the money, the other is the order itself.
The order instructs the agent at the point to which it is to be sent to pay the sum named to the person named.
To complete the order the sender should sign his name in a place indicated for the purpose on the back of the paper.
This done, the order can be sent to the person for whom it is intended, in an ordinary envelope.
The receiver of an express money order can have it cashed at the express office in his town, or sign it and place it in his own bank as if it were cash.
Not everything about railroads, that would be a tremendous undertaking, but just enough to show what everyone should know about them as carriers of goods.
The express companies have practically a monopoly of the transportation of the smaller packages of goods requiring quick transit and immediate delivery, but the longer, heavier, and slower freight are in the hands of the railroads, and where it can be done, and time is not a first factor, the steamboat takes the place of the train.
As most of the goods in changing hands are carried by steamboat or railroad, the method of shipment should be understood by everyone who may be called on to use one or the other means of transportation.
The person shipping goods in this way is the "consignor."
The person to whom the goods are shipped is the "consignee".
The goods shipped are described in a paper called a "bill of lading."
A bill of lading is a written contract, or statement of the goods shipped, their condition, and the time of shipment.
Bills of lading and receipt blanks are furnished at the offices of the transportation companies.
Two copies of the bill of lading should be made out. One of these is signed by the consignor and the other by the transportation agent.
The copy signed by the consignor is kept by the agent, and the copy signed by the agent is retained by the consignor, as a voucher for the goods shipped.
This receipt should be mailed to the consignee.
When the consignee gets this bill of lading, it is a voucher to the freight agent, where the goods are to be delivered, as to the ownership.
It is usual for the agent at the point of shipment to send a copy of the bill of lading to the agent where the goods are received. In this way he can compare the consignment with the consignee's bill.
It is not usual to pay freight bills at the point of shipment, that being left till the goods reach their destination.
The agent at the place of delivery makes out an "expense bill," which is an itemized statement of the freight charges, and must be paid by the consignee before delivery.
This done, the consignee must sign a receipt for the goods delivered, and the affair is closed.
Before wholesale houses or manufacturers ship goods, they are either paid for or they have a business understanding with the consignee as to when and how the payment is to be made.
There are occasions, however, when no such arrangement has been made, and a man not well known to the merchant orders goods shipped by freight.
In a case like this, the merchant may ascertain through a commercial agency—the agencies make it their business to keep posted in such matters—the standing of the man giving the order.
Trade has its risks and the merchant, even where the information is not quite assuring, may decide to fill the order and ship it.
As with express companies, goods may be sent as freight, C. O. D.
This is done by means of a bill of lading, to which is attached a draft. The shipper bills the goods to himself at the point to which they were ordered.
To the bill of lading he attaches a draft for the sum involved, but this, instead of being forwarded to the consignee by mail, is sent to him through a bank for collection.
Now before the consignee can get the bill of lading, which authorizes him to receive the goods, he must pay the draft.
The bill, which is in the shipper's name, is then endorsed over to the payer of the draft.
Country merchants and sometimes farmers send produce by freight to be sold on commission in the city.
Delhi, N. Y., Sept. 9, 1910.Invoice of Merchandise shipped byHarry T. Jacksonand consigned to Brown, Smith & Co.,Newburg, N. Y.to be sold on commission.120 bbls. Potatoes70 " green apples40 Crates tomatoes.
Mark plainly all goods shipped.
Generally speaking, tax bills are paid with reluctance.
This is no doubt due to the fact that with every other form of payment one has something tangible to show for the expenditure.
If every good citizen could be brought to see that his private interests are closely linked with public affairs, he would take more interest in the local politics of his town and county, and so have a voice in the expenditure of taxes by selecting the best men to do the work for him.
Taxes are forced contributions levied on citizens to provide money for public expenses, such as law and order, schools, charities and public institutions.
All tax laws are made by the men who pay the taxes.
You say "No" to this.
"The tax laws are made by the legislators up at the state capital."
Very true; but who nominates and elects the legislators? Did you not put them into office?
"No, the bosses did that," you reply.
True again, but good men are in the majority and if they did their duty to their country and themselves, there would be no bosses and taxes would be honestly spent.
Tax laws are enacted by Congress, and by the legislatures of our many states. Taxes cannot be collected without this authority.
State taxes are collected for the state use only.
United States taxes are expended for the benefit of all the people of all the states.
Taxes may be further divided into direct and indirect.
Direct taxes are, at present, only employed by the states. They are levied on realty and personal property, and are paid by the particular person named in the tax bill presented by the authorized collector.
The amount of these taxes vary each year, depending on the public requirements.
They are based on assessments made by officers appointed for the purpose and generally known as assessors.
Though there is no demand made on each individual to pay the indirect taxes required by the Government, yet indirectly every person who spends little or much money is paying them.
The Government's chief means of raising the great sums of money needed yearly to carry on its machinery is by customs duties and internal revenue collections.
The customs revenue is obtained from a tax levied on certain articles imported from foreign countries.
This customs tax is called a tariff.
The question as to the goods that shall be subject to a tariff and the amount to be levied on the same, is one that has long perplexed statesmen and been a leading party issue.
The merchant, to whom the goods are assigned from a foreign port, must pay the duty levied on them by a Government Appraiser before he can take them away.
Private parties, landing from abroad at any of our ports of entry, are required, before getting their baggage, to write out a declaration of the things contained in their trunks. But this declaration does not prevent the customs inspectors from making a careful personal examination. All things found dutiable, whether declared or not, are set apart and held until the assessment or duty is paid.
The evasion of a customs duty is called "smuggling" and is punished by the confiscation of the goods, and penalties in the way of fine and imprisonment.
There are people who would consider it a sin to cheat their butcher, but see no wrong in cheating the Government.
To the merchant who pays tariff duties the amount involved is a direct tax.
When the merchant sells his goods to the retailer or consumer, he adds the tariff to his freight, insurance, interest, etc., as direct purchase cost. This is strict business, but the consumer pays all the bills with the profit added.
The second great source of Government revenue is derived from the internal revenue tax, or excise duties.
Manufacturers of alcohol, whether as wine, whiskey, or beer, and the producers of tobacco, in its manufactured forms, have to pay an excise tax in proportion to the amount and character of their products.
As with the customs tax, the excise tax is added by the manufacturer to the cost of production, so that at last it is the consumer who pays it.
While the manufacturers of alcohol pay the excise tax in bulk, that is on the number of gallons produced, the manufacturers of cigars and tobacco have to attach to each separate package a distinct internal revenue stamp.
These stamps are purchased from the internal revenue collectors, appointed by the Government to certain districts. The stamps show at a glance that the proper tax has been paid, just as the postage stamp affixed to a letter proves that the price for carrying it and delivering it has been paid.
As it is a penal offence to use a postage stamp a second time, so it is a punishable offence to attempt the use of a cancelled or torn internal revenue stamp.
If demanded, the Government will give a receipt for the sum received from any one for considerable sales of postal or revenue stamps.
State taxes, as has been stated, are levied on real and personal property. Some states have in addition a poll tax. This is levied on the individual without any regard to his property, and a receipt for it may be a requirement before a citizen is permitted to vote.
Of course the real estate and personal property taxes are not the same in all the states, for each state must raise every year the sum necessary to meet its own special requirements.
The intention of all tax laws is to have every citizen's contribution bear the same proportion to the whole amount to be raised that his possessions bear to the aggregate property of all the owners in the commonwealth.
All our state laws exempt from taxation certain kinds of property.
The state cannot tax the property held by itself for the common use.
The buildings and related properties of religious bodies and societies are not taxable.
Such educational institutions as colleges, seminaries, and private charities are not taxed.
Cemeteries and other places where the dead are disposed of are not taxed.
County buildings, city parks, public schools, penal institutions, fair grounds for public use and similar property is never taxed.
There have been times in the life of the Government, and in the building up of the states, when the funds necessary for maintenance from taxes, heavy though these have been at times, have not been sufficient to meet the essential expenditures.
This was particularly the case with our Government during the trying days of our Civil War.
States entering on great public works, for the benefit of the commonwealth, frequently cannot raise the necessary money by the usual forms of taxation.
In these cases loans have to be made, that is the Government and the state go out and borrow from those who have it to spare, the necessary money.
The Government, the state, and it may be the city or county, gives to the party providing the money what is known as bond or bonds, each of a fixed amount and bearing a fixed rate of interest, payable as a rule semi-annually.
There is no form of property so easy to assess for the purpose of taxation as real estate, that is the land and the buildings, for the last selling value of this property is a matter of public record, and then the assessors, who should be men of honesty and good judgment, are generally posted as to the value of the property under consideration.
When, however, it comes to the taxation of personal property, which means any kind of property that can be detached and carried about, it is a different matter.
Just as many people, otherwise regarded as honest, do not think it a great wrong to get the better of the Custom House, so many reputable people are inclined to revolt against the tax on personal property and to conceal their actual possessions from the assessor, nor is this peculiarity confined to the poor.
Any man may be legally compelled to swear to the accuracy of his statement, and if it is found that he has knowingly sworn to a false statement, he may be brought to task for perjury.
What is known as "personal property" varies in many of the states.
Personal property generally includes, merchandise in possession; all fixtures, all furniture in home, offices, and factories; all live stock, all money on hand and in banks; other men's notes, not transferred; all stocks and bonds and other forms of security.
Townships or counties, if properly authorized by charter or the votes of the people, may levy special taxes for special purposes within the limits of their own jurisdictions, or they may in the same way sell bonds to carry out some work that has been decided on for the common weal.
Two or more towns, or counties, may join in the same way to carry out a project of benefit to both, provided that the burden of the undertaking be equitably assessed.
All tax bills are due and collectable on presentation, but this is never enforced.
A time is, however, fixed beyond which payment cannot be deferred.
A sufficient amount of any property may be sold at auction to satisfy a tax bill.
Of old, and still in some places, the road taxes were paid in cash, but more frequently by work on the roads, either by the individual man, or in connection with his team, each day's work of one or both being fixed at a regular rate.
The state does not tax the individual members of a corporation for property held in common. The same result is secured better by taxing the corporation as a body. This applies to banks, railroads, and incorporated manufacturing establishments.
Savings banks are taxed lightly. Every depositor is liable for a personal property tax proportioned to the amount of his credit.
To make collection easy the savings bank always pays the amount of this tax in bulk, and then charges it to the expense account of the establishment, so that indirectly the depositors pay after all, as their dividends are reduced by just the amount of the tax.
When a man owns property in different towns, counties, or states, he is regarded as so many individuals, and must pay each as the local demands require. No matter where a man's personal property is placed, the rule is to tax him for the whole at the place of his usual residence.
The landlord and the merchant each pays a direct tax to the collector, but it would be a business error to think that in so doing either or both is carrying more than his share of the total taxation.
The landlord keeps in mind the added expense when he comes to adjust leases with his tenants. The merchant, who pays taxes on his stock and so adds to his expense account, should not be blamed if he keeps this in mind when he fixes the selling prices of his goods.
Taxes duly paid, honestly collected, and properly expended should never be regarded as a burden.
From no equal expenditure of money do the people get so much good.
The public schools, the public highways, the protection of life and property, public hospitals, public libraries, residences for the old, the blind, the orphaned and the insane, as well as secure places for the lawless, are built and maintained by the taxpayer.
As a rule all these things are done honestly and well, notwithstanding the outcry to the contrary.
If there be dishonesty in places, it is the fault quite as much of the voter who selected him as of the official culprit himself.
We must take all the responsibility of our agents, whether they be public or private.
Every good citizen should feel that his public duty is an important private business.
The law books define a contract to be "An agreement between two or more persons to do or not to do a certain stated thing or things, for a consideration."
The consideration is a vital part of every contract.
There can be no binding contract without a consideration.
The other requisites of a contract are—
1. It must be possible of accomplishment. 2. It must be in accordance with law. 3. Its performance must not injure the public. 4. The parties to a contract must be competent to do the things to which they pledge themselves. 5. A drunken or an insane man cannot make a contract. 6. All parties to a contract must be agreed.
No contract can be held as binding where the consideration is not named.
A promise, verbal or in writing, to do something for a certain party, cannot be enforced.
A promise to do the same thing for a stipulation named is a contract and may be enforced.
A gift is not a form of contract. Once made it cannot be legally taken back.
There are certain forms of contract which cannot be legally enforced, unless they are in writing.
1. All contracts for the sale of real estate. 2. Contracts that are not to be performed for a year or more. 3. All contracts, to answer for the debt and obligations of another, must be in writing.
If the contracting parties put but a part of their agreement in writing the law will recognize only the written part. The whole must be in writing, or the agreement will not hold.
Verbal contracts are not safe.
Although the law does not require even contract to be in writing, yet, as it never declares that a contract must be verbal, it is the part of prudence, wherever possible, to put every contract in writing.
Owing to defects of memory even honest men may, and frequently do, disagree as to the terms of a verbal contract.
Because the party with whom the contract is made is a close friend, one is apt to depend on a verbal agreement, but the closer the friend or relative, the more reason there is for an exact written contract, if we would keep the friend.
The law is never specific as to the form of contract that may be used.
It is not necessary to draw up the contract with the formal accuracy of a real estate deed.
Any one with good sense and a fair common school education can draw up a contract that will hold.
Know what is required, then state the facts simply.
Contracts need not be sworn to or even witnessed.
Every note, mortgage and other form of obligation is a specific contract.
A lease is a form of contract between two people, known as landlord and tenant, for the use of real estate for a period and at a rental specified in the document.
A verbal lease may be made for a short period, but if for a year or more, it must be in writing.
A lease should state when, where and to whom the rent is to be paid.
Each party to a lease, or other form contract should have a copy.
If the premises rented should become unusable by fire or any action of the elements the tenant is still liable for rent, unless there is a special clause in the lease providing for such a contingency.
A tenant cannot, without the written consent of the landlord, use the rented premises for any other purpose than that stated in the lease.
In some states the law compels the landlord to keep the premises in habitable repair, but this does not seem to be the rule. It should be decided, where there is doubt, before signing the lease.
Where it is agreed that the landlord shall keep the premises in repair, and, after due notice of the fact, he fails to do so, the tenant may himself make the repairs and deduct the amount from the rent.
If there is no contract to the contrary, the tenant may sublet the whole or any part of the premises, but this does not release him from liability for rent.
If the tenant fails to leave the property when his lease has expired, the owner may make his demand through what is known as a "notice to quit," which must be served on the tenant in person.
A guaranty is sometimes required to insure the payment of rent.
Plainly, a guaranty is an agreement to assume, under certain conditions, the liabilities of another.
If a man makes a contract, a lease, or a note, and his personal resources are not deemed sufficient to secure his performance of the things agreed to, the other may require that some one, in whom he has more faith, shall give him a guaranty, or personal security in writing.
The following might be used as the form for a guaranty for a lease, contract, note or other obligation of contract:
"For value received, I hereby guaranteethe payment of the within lease (bond orcontract). George L. Roberts."Short Hills, N. J.October 1, 1910.
This is a written agreement by which one person transfers to another his interest in certain personal property.
The law lays down no rule as to the form.
A bill of sale usually passes where the property paid for is not immediately removed from the possession of the seller.
This form would answer in any state:
"Bridgeport, Conn., Aug. 2, 1910."I have this day sold to Calvin E. Platt,of New Haven, in this state, my team ofbay horses, with their harness, one familycarriage, and a two-seated cutter."Thomas P. Fletcher."
Be sure, where the bill of sale includes many articles, to name every one of them in the bill.
If paid for, whether by cash or a note, be sure to get a receipt for the same.
A bond is a form of obligation.
Every enforcible bond must be in writing and under seal.
The maker of a bond by the act acknowledges a liability in the form of a debt or a duty.
The maker of a bond is the "obligor."
The party to whom it is made is the "obligee."
The bond names the liability or indebtedness; then follows the condition wherein it is stated the particular thing that the obligor is to do, or not to do.
The penalty for the non-compliance with a bond is twice the amount of the money involved.
It is often required that the bond shall be further guaranteed by one or more sureties. These sureties may be required to certify that they are worth a certain sum, free and clear of all indebtedness.
Persons holding positions of financial trust, whether public or private, may be, and most of them are, required to furnish bonds for the faithful performance of their duties.
In the larger cities there are casualty and liability companies, which, for a fixed or annual consideration, act as sponsors on official and other forms of bond.
Where there are no such companies, as those just named, then private citizens of known responsibility must be secured to go on the bond.
In every case the amount of the bond or security is measured by the responsibilities of the man from whom it is required.
Life insurance may be defined to be "A contract for the future payment of a certain sum of money to a person specified in the body of the policy, on conditions dependent on the length of some particular person's life."
There are two parties to this contract—the insured and the insurer.
The purpose of the insurer, if he take out the policy in his own name, is to provide in a measure for the care of his family, or other dependents, in the event of his death.
After a long experience with the death rates in all lands that keep mortuary statistics, the actuaries of insurance companies can now estimate with surprising accuracy the probable length of life before any man of any age.
The methods of insurance companies mean to be scientific, but be that as it may, they are certainly interesting.
Let us take a young man of thirty, married, with one child, in good health, and in receipt of a fair salary, but with no property to leave his wife and little one in the event of his death.
To secure his dear ones, he decides to insure his life for, let us say, $3,000.
He fills out the blank, in which his age and all the other required information is given; then the insurance company's doctor examines him and he is accepted as what is called "a good risk."
Now, from its actuary tables, the company knows, with reasonable accuracy, the number of years this young man should live, barring accidents.
Already they have their tables of calculations for such cases. They know what expense will be required in the way of rent, clerks, advertising, etc., to care for this case till the prospective, the inevitable end is reached.
On these calculations the immediate and all subsequent premiums or payments are based.
The insurance company invests and reinvests the premiums, and the total of these, it is estimated, will meet the expenses and the amount of the policy at the time of its calculated expiration.
If the young man in question had the money, he would find it to his advantage to buy a paid up policy, that is one on which no further premiums would be required.
But, having the money for a paid up policy, could not the young man, without any expense for clerk hire or rent, invest it, and reinvest it with the interest, as long as he lived, and thus make by insuring himself?
There can be no question as to that, provided always that the young man lived out the calculated time, invested his insurance money at once, and kept on investing it in "safe things" as long as he lived. But how many young men are there who could or would take this course?
It is much easier to save from our earnings than it is to invest those earnings wisely.
The straight life policy, payable to the heirs at death, is the form in general use, but there are others.
There is yet another form, known as the "endowment," which in itself combines the usual life insurance with some of the privileges of a savings bank.
The endowment policy, while payable if death should occur before a fixed time, specifies the date when it shall be payable to the insured himself, if he should live till that time.
In this case the family is secured, in the event of death, and the insured has a guarantee for himself when he reaches life's unproductive years.
The premiums on an endowment policy are necessarily greater than those on a regular life, and the premiums increase with the shortness of the time.
Seeing the vast sums accumulated by what are known as "the old line companies," despite their high salaries and great expenses, working men throughout the world, but more particularly in the United States, have banded together and formed mutual insurance companies.
These companies, there are many of them, are known as societies, and their local branches are called "lodges," "councils" or a similar name.
Properly conducted, these mutual societies should be able to furnish insurance at about actual cost, for the expenses of management and collections are small.
It can be said that some of them have been and are being well managed, but others, like their predecessors, the old line companies, have unfortunately been conducted for the enrichment of their promoters.
The mutual insurance companies, like their more pretentious prototypes, are now placed under the supervision of inspectors in nearly all the states.
In the society companies, there is a limit to the amount, usually $3,000, for which one can be insured, but the regular companies have no such limitation.
In the mutual insurance companies, the insured cannot leave his insurance to his creditors, or to any one not within a certain degree of kinship.
In the regular companies a man may insure for any amount he thinks he can carry, and he can insure in the same way in any number of companies, and he can leave the money to any one he may select, or for any purpose he may choose.
Sometimes the policy is made payable to unnamed executors. These may be named in a will made after he has taken out his policy.
Sometimes a man, without real estate or other personal assets, desires to raise a loan on his life insurance, which, it should be said, is a form of personal property. In this case he may assign his life policy, or his endowment policy, as security for the loan.
Again, if he is not insured and has no shadow of an asset, he may have his life insured for the benefit of another, in consideration for a loan.
When there is a failure to meet premiums, the policy is said to "lapse" or default.
Even in this case the insured has an equity.
Every policy, depending on the amount paid, has what is known as a "surrender value," and by proper process this may be collected from the company.
In some states, if the insured fails to meet his premiums, the company is compelled to pay on the policy at his death a sum equivalent to that which he paid before default.
Some insurance policies have a clause stating that the contract will be void in the event of the suicide of the holder. The highest courts have set this clause aside. The ruling is that a suicide is an insane man, and that his heirs should not be made to suffer for his misfortune.
The larger insurance companies may be either proprietary or mutual, some are a combination of both.
The proprietary companies are corporations organized by a number of men to conduct life insurance as a business enterprise.
Such a company must be regularly chartered, and is under the supervision of the state department of insurance.
Mutual companies, as the name implies, are organized and are meant to be managed for the benefit of the policy holders, who are also regarded as stock holders, with the right to vote in the election of officers and other company affairs.
Aiming to create a strong reserve fund to secure the policy holders, the mutual life insurance companies usually charge a little more in the way of premiums.
Many rich men have their lives insured for great amounts. This is done that their heirs may not be forced to break up the estate, at death, in order to settle the ordinary liabilities.
If it can be afforded, it is always well to carry some life insurance.
We hear and know much about life insurance because, no doubt, it has to do directly with the individual, and so has a personal appeal; but there are other forms of insurance, forms that have to do with things material, that play an important part in the world's business.
The gambling spirit, like the desire for stimulants and the tobacco habit, seems to be well nigh universal.
Men bet on the turn of dice, the cutting of cards, or the tossing of a coin, and we very properly denounce it as gambling. We take money without giving an equivalent, or we part with it and have nothing to show for the transfer.
There are insurance companies in England and in other parts of Europe where they insure risks from life to fire, from ships to crops, and from the turning of a card to the tossing of a coin.
The English company, known the world over as "Lloyd's," is ready to insure an ocean liner, or to guarantee that the next child born into your family will be a boy or a girl; it will even insure that there will or will not be twins, and that, if twins, they will be boys or girls, or one of each.
Now, this looks like gambling, and you would be quite right in so classing it, yet it is founded on the well considered law of chance, and the premiums—call them bets—are calculated with a mathematical precision surprising to one who has not studied the matter.
Fire insurance is a contract between the insured and the company taking the risk, in which for a consideration called a "premium," the company agrees to pay to the insured a stated sum, should the property, named in the policy, be destroyed by fire.
If there should be a fire, during the life of the policy, and the damage is not total, the company pays only enough to cover the loss.
Should the property be totally destroyed the company pays up to the amount named in the policy.
No company cares to insure for the full amount of the property; that might be an incentive to incendiarism.
In taking a fire risk, the companies base their estimates on tables as carefully worked out and from experiences quite as well studied as those of the actuaries of life companies.
Fire companies are purely business corporations, and their conduct is subject to the inspection of the officials of the state from which they receive their charters.
As life companies have rates dependent on the age of the insured, so fire companies regulate their premiums by the location and other circumstances of the buildings; in other words, they calculate the probabilities, and charge accordingly.
There are buildings particularly subject to combustion on which American companies will not take a risk. Among these may be classed kerosene and turpentine stills, sulphur and powder mills, and the buildings in which these products are stored.
Buildings not used for the purposes named, but in close proximity to them, are often considered too dangerous to warrant the issuance of a policy.
In all cases, the company makes a careful survey of the property to be insured, and on this report the amount of the premium is based.
Premiums on fire policies must be paid in bulk and in advance.
Policies should be renewed some days before the expiration of the old ones.
Fire premiums, taking into consideration the amount to be paid, are much lower than life premiums. We know that a man must die, but a building may never burn down, therefore the risk is less.
A man may insure in a dozen life insurance companies, and each must pay the amount of the policy on his death, but not so with fire companies.
A man owning a house worth, say ten thousand dollars, can insure it in ten companies, each taking a risk of eight thousand dollars.
If this house burns down the man does not receive eighty thousand dollars. The actual loss is calculated and the companies divide it up, each paying its part.
Fire companies, while anxious to issue policies on every insurable house, are more than willing that their business rivals should do the same, as in the event of fire the burden of loss will not be borne by one.
After every fire the company's agent examines the damage and estimates what is saved. On this the payment is based.
A building is classed as real estate, but personal property is just as liable to be destroyed by fire.
Fire policies can be secured on goods, furniture, machinery, live stock and other things, and the method is about the same as where buildings are insured, but as a rule the premiums are higher, for such things are apt to be ruined by smoke and water, when the building in which they are stored may not be much injured.
Men can associate for any legal purpose, and mutual protection against loss by fire is one of these.
In many neighborhoods throughout the country, but particularly in the eastern states, there are mutual insurance companies, usually composed of a number of men who know each other and who agree to share the losses of a member, in proportions agreed to in advance.
This form of insurance is cheap and effective, but the field of its operations is necessarily limited.
The stock companies start with a fixed capital, each member receiving stock in proportion to the amount contributed.
The capital and the interest from it, after paying the necessary expenses, is invested, and reinvested, till it often reaches a large sum.
At the end of every fiscal year, usually June 30th, the expenses and the losses paid are deducted from the earnings and the net gain may be divided as dividends.
Often there are not only no dividends, but a great conflagration, like that of San Francisco, may wipe out all the earnings, all the reserve and even the capital itself, leaving the company bankrupt and heavily in debt.
Great calamities cannot be foreseen. No actuary has yet appeared to forecast the acts of Providence, but on the whole our fire insurance companies are well managed and prosperous.
We have insurance against storms, against the breaking of plate glass and even against loss from burglars, but the best known of the minor insurance societies are those known as "accident companies."
Accident policies are of many kinds, and there is no reason why the companies, under their charters, should not extend their risks indefinitely.
Accidents against property are insured much as is destruction from fire, but the nature of the accident as "hail," "explosions," "tornadoes" and "insect destruction" must be specified in the policy.
The most popular form of accident policy is that which is sold to travellers, and which can usually be had at the office where one buys his ticket.
The method here is simple, and the purchase may be made in a minute. "I want a policy for $1,000 for ten days," you say to the clerk. He tells you the amount, you pay and get your ticket, and there you are.
Prudent men have a stamped and addressed envelope ready. Into this they push the policy, and the wife gets it. No, it does not startle her. It is just Harry's prudence and she is used to that.
If properly conducted, there is much to commend the management of a business through partners.
Never go into a partnership with a man who puts in his experience against your capital, unless you know him like a brother.
"It lasted about a year," said a man who had done this. "Now the fellow, who has cleared out, has the capital and I have the experience."
A partnership is an agreement between two or more persons to associate for the purpose of carrying on a certain form of business.
Each member of a copartnership must contribute a stated contribution to the establishment of the enterprise, but each need not give the same amount.
Neither is it necessary that the contributions of each to the firm shall be of the same character.
One may contribute a building, another machinery, or material, and still another money.
The shares in the profits are based on the cash values of the different contributions.
The work of the different parties may be estimated as contributions, but in such cases it is better to pay the worker a fixed compensation, and charge this to the expense account.
Never go into a partnership based on a verbal agreement, unless it be for the distribution of fish, game or nuts, when out with a friend for a holiday.
Have the copartnership articles carefully drawn up and signed before you put a cent into the undertaking. A document like this can be appealed to should disputes arise; and should a partner die, his heirs may find it of the greatest value.
The articles should contain:
1. The amount to be contributed by each. 2. The nature of the business. 3. The time which the partnership is to last.
If the time is not specified, a partner may withdraw whenever he pleases.
If the profits are to be equally divided, this should be stated and provided for.
When a man invests money in a business in the management of which he takes no active part, he is said to be a "silent partner."
Such a partner has a share in the gains and he is responsible as the others for the firm's liabilities.
Again, a man may not give money or time to a firm, but is willing, for business reasons, that his name shall appear as if he were in the association. In this case the man is known as a "nominal partner."
Although this man is not entitled to a share in the profits and has no money invested, yet he can be held liable for the debts and other obligations. The reason for this is very plain.
In all matters rightly belonging to the business of a firm, any member has the right to act, and his acts will be held binding in law.
It is usual for partners active in a business to have each his separate duties, but even if these duties be designated in the articles of agreement, the outside business world is not supposed to know anything about the relative duties of the members of a firm as decided among themselves, so it is decided that each is empowered to act for his partners.
Under the usual articles, it is stipulated that while a dual partnership lasts, neither of the members shall make a note, sign a bond, or enter on any outside obligation as an individual without having secured the written consent of his business associates.
Each partner in a firm is liable with the others for all the business indebtedness.
If a firm fails, and the assets are found not sufficient to satisfy the creditors, they can levy for satisfaction on the private property of one or all of the partners.
If a member of a firm should become so far indebted, as an individual, that he cannot comply with his obligations, the interest he holds in the firm may be disposed of and applied to the payment of his debts.
This does not mean that the creditors may take or seize on any particular thing which the firm holds jointly, but that the debtor's interest in the concern may be so disposed of. All this the law has provided for.
A new partner admitted into a firm cannot be held responsible for the debts of the old concern.
Every partnership agreement must provide for and distinctly state the period for which it is to continue.
At the end of the period named, the partnership is dissolved by limitation.
If the partnership is to continue, a new agreement must be made and signed.
On proper application, a partnership may be dissolved by an order of the court.
If a member who has become objectionable to his partners should not agree to a dissolution of the firm, the partners may apply to a court of competent jurisdiction for a decree of dissolution.
No member of a firm can withdraw at his own option. The consent of the other partners is necessary, and before he is released he must provide for his share of the obligations.
Notice of dissolution should be published, and notices sent to agents and others interested.
The following is the customary form of notice:
The copartnership heretofore existingbetween John Smith, Harry Roberts andThomas Allen, under the firm name ofSmith, Roberts & Co., is this daydissolved by mutual consent.John Smith.Harry Roberts.Thomas Allen.June 30, 1910.
Limited or special partners are not recognized in some states.
This is a method of association whereby a person joins a partnership, putting in a sum agreed on, and which he may stand to lose as an investment. He is entitled to apro ratain the profits, but he cannot be held for the debts.
In some countries marriage is regarded as a civil contract or form of partnership, subject to dissolution by the courts.