EVERY GIRL A BUSINESS WOMAN.
A PRACTICAL GUIDE TO THE WORLD OF INDUSTRY AND THRIFT.
ByJAMES MASON.
A
tthe end of our last article we were speaking of the Post Office as a banking establishment, and we did not finish all there was to say on the subject.
Being both bankers and letter-carriers, the postal authorities offer unusual facilities to the public for sending money to different places, either in the United Kingdom, or in the colonies, or in foreign countries. This department of their business is divided into two branches—that dealing withMoney Orders, which are an old institution, and that occupied withPostal Orders, which only came into use in 1880.
Money orders were first started in 1792 by three Post Office clerks, with the idea that they would be of service for sending small sums safely to soldiers and sailors. The business gradually extended, and in 1838 was taken over by the Government.
The charge for remitting was at first eightpence in the pound; but it has been reduced from time to time, the last reduction being made only a few months ago. It now stands as follows:—To remit to any place in the United Kingdom any sum not exceeding a pound costs 2d.; from one pound and not exceeding two pounds costs 3d.; from two pounds and not exceeding four pounds costs 4d.; from four pounds and not exceeding seven pounds costs 5d.; and from seven pounds to ten pounds you have to pay 6d. No single order is issued for more than ten pounds; but if you have to remit, say, thirty pounds, it is an easy matter to get three orders.
To get a money order, the first thing you have to do is to fill up an “application form,” to be had gratuitously at all money order offices. All post offices, by the way, are not money order offices. Here is a form filled up:—
Money Order RequiredFor £9 2s. 3d.Payable atPepperness.ToMiss Flora Sprat.Sent byEsmeralda B. G. Constable.Residing atGrumblethorpe.
The amount of the order required, along with the commission—the total in this case would be £9 2s. 9d.—is handed over with the form to the postmaster, or whoever is acting for him. No order may contain a fractional part of a penny. To make an order more secure, it may be “crossed,” just as we mentioned could be done with cheques. In that case it is payable only through a bank.
When a money order is to be paid in London, or in any other town where there are more money order offices than one, the sender should say at what particular office she wishes it to be paid. Should she not do so, and only say, “Payable at London,” or “Manchester,” or “Edinburgh,” the receiver of the order will get payment at the head office in the town only.
As a precaution against dishonest people, it is recommended that when the sender of the order is well known to the receiver, the letter enclosing it should be signed with initials only. When she is not well known, safety may be given to the order by making it payable ten days after date, or by having it crossed like a cheque, or by registering the letter containing it; or the name of the sender may be sent in a separate letter from that containing the money order. If ever you make a money order payable ten days after date, you must on obtaining it affix to it, in the presence of the postmaster, a penny adhesive stamp, and write your signature across the stamp.
When an order is presented for payment, the person presenting it is asked “Who sent this order?” and if this question is correctly answered, and the order is properly receipted, the sum is at once handed over, “unless the postmaster have good reason for believing that the applicant is neither the rightful claimant, nor deputed by him or her.”
Money orders are not only to be obtained for places in the United Kingdom. They are also issued on France, Belgium, Switzerland, Germany, Italy, Holland, Denmark, Norway, Sweden, the United States, and several other foreign countries, and on most of the British colonies and foreign possessions. The rates of commission charged for these foreign money orders are—For sums not exceeding two pounds, 6d.; from two pounds to five pounds, 1s.; from five pounds to seven pounds, 1s. 6d.; and from seven pounds to ten pounds, the highest limit of a single order—2s. The regulations affecting foreign money orders may be seen in the useful Postal Guide, which is published, as we mentioned in our first article, once every quarter.
There has been a considerable falling-off of recent years in the number of inland money orders issued, colonial and foreign orders having, however, on the other hand, increased in number. The decrease has been brought about by the introduction of postal orders, as they are called, which have been found much more convenient in some respects, not to speak of their being, for small sums, decidedly cheaper.
These postal orders, payable on presentation without previous notice, are issued for fixed sums from a shilling up to a pound, and are to be obtained at all money order offices in the United Kingdom, as well as at Malta, Gibraltar, and Constantinople. Here are the amounts for which they are issued, together with the “poundage” payable on each order: There are orders for 1s. and 1s. 6d., on which the charge is ½d.; then there are orders for 2s., 2s. 6d., 3s., 3s. 6d., 4s., 4s. 6d., 5s., 7s. 6d., 10s., and 10s. 6d., which cost 1d. each; and, last of all, there are orders for 15s. and 20s., on which one has to pay 1½d. A postal order is in the following form:—
To the Postmaster in charge of the Money Order Office at.....................Pay to........................., at any time within Three Calendar Months from the last day of the month of issue, the sum of Ten Shillings, on account of Her Majesty’s Postmaster-General.
To the Postmaster in charge of the Money Order Office at.....................
Pay to........................., at any time within Three Calendar Months from the last day of the month of issue, the sum of Ten Shillings, on account of Her Majesty’s Postmaster-General.
When one has to remit broken amounts, say 4s. 2½d., or 8s. 3d., or 10s. 9½d., postage stamps may be affixed to the face of the orders; but the stamps used in this way on any one order must not exceed fivepence in value.
Every postal order issued has this regulation printed on it:—“The person to whom this order is issued must, before parting with it, fill in the name of the person to whom the amount is to be paid, and may fill in the name of the money order office at which the amount is to be paid.” The wordmustis underlined in the Postal Guide; but the public having discovered that postal orders are a very convenient form of small currency, have never taken the regulation seriously. In fact, postal orders are coming more and more to be passed from hand to hand like coin, the blank spaces in the order being only filled in when it comes to the last holder.
When circulating in this way, however, postal orders have an inconvenience: they must be cashed within three calendar months from the last day of the month when they were issued, otherwise a sum equal in amount to the original “poundage” is charged for every additional three months that passes before the order is presented for payment. Suppose a postal order kept on circulating, it would fall in value every three months. A shilling postal order at the end of a year would only be worth 10½d.; at the end of two years its value would be 8½d.; and suppose it remained uncashed for six years, all you would get for it would be ½d.
Before a postal order is paid, the blank spaces must be filled in, and the receiver of the money must sign her name at the foot. Should a postal order be “crossed” like a cheque, payment will only be made through a banker.
Leaving money and postal orders—which we have spoken about fully because they are such everyday documents—we come now to speak ofInsurance. And this is a subject about which all prudent people should know something.
The object for which insurance exists is to guard against certain accidents to which we are all liable, such as the destruction of property by fire, or the loss of future earnings by disablement or death. An agreement is entered into by which one party, known as theinsurerorassurer, agrees to pay to another, called theinsuredorassured, a certain sum in the event of the particular event insured against happening.
The document which states the conditions of this agreement is called thepolicy, and the payment made on account of the insurance is known as thepremium.
Insurance of houses and goods against fire began in London in 1667, the year after the Great Fire, in which the citizens had so terrible an experience of the character of the all-devouring element. The business has now attained gigantic proportions, the insurance companies of our own day being as a rule very wealthy and profitable concerns.
The rates charged for insurance are calculated at so much per cent.—or so much for every hundred pounds—of the sum insured. They vary in amount according to the nature of the risk. If there is little danger under ordinary circumstances—as in a dwelling-house—of the property being destroyed by fire, the sum to be paid is low; if, on the other hand, the danger is considerable—as in a sugar refinery—the charge is high.
Risks may be divided into three classes—common, hazardous, and doubly hazardous. Common insurances are charged 1s. 6d. to 2s.per cent. per annum, with certain exceptions; hazardous insurances are charged 2s. 6d. to 3s. 6d. per cent. per annum, with certain exceptions; and doubly hazardous insurances are charged 4s. 6d. to 5s. per cent. per annum, with certain exceptions; and in the case of the exceptions the rate may run to 10s., 15s., or even more per cent.
In describing the property to be insured, you must be careful to tell the whole truth about it, so that the company may know what risk they are running in insuring it. Suppose, too, after the insurance has been effected the risk should become greater—say by the erection of a stove—you must not fail to keep yourself safe by communicating with the company. There are some kinds of property, such as ready money, books of accounts (their value as documents), bank-notes, stamps, bills, bonds, and other written securities, which insurance companies will not undertake to insure on any terms.
Insurance premiums are usually paid once a year at one or other of the four quarter-days. Fifteendays of graceare allowed after the expiry of annual policies, and if the premium is not paid before the end of these fifteen days, the insurance company holds itself free from all risk. All policies, however, are not annual ones. You may insure for any length of time. No days of grace are allowed on “short-time policies”—that is, on policies for less than twelve months.
If one has any property to speak of, it is always well to insure, for accidents will happen. Perhaps, after paying for many years without a disaster, one may be inclined to lament having insured at all, and wish that all the money paid in premiums were in her own pocket; but this is not the right way of looking at it. The money sunk in premiums is well spent in buying ease of mind. A person insured can sleep in comfort, knowing that if fire should overtake her property she will recover full value; whilst one uninsured may pass many sleepless hours thinking, If I am burned out, what will become of me?
Life Insuranceis quite as useful an institution as insurance against fire; indeed, it has been called “one of the greatest blessings of modern times.” In it, by means of an annual payment, varying according to the age of the person whose life is insured, a sum is secured in the event of death. A girl may not have any necessity for benefiting survivors in this way, but she should know something about the matter for all that.
In insuring one’s life the applicant is required to furnish information as to her own health and habits of life, and some particulars as to her family history. If the application should be rejected on the ground of ill-health or a tendency to hereditary disease, you must just try elsewhere: offices are to be found that will insure unsound lives, the charge being, of course, proportioned to the risk.
The cost of life insurance is based on the expectation of life at different ages. The expectation of life, for example, of a girl of ten years of age is about 48 years; at fifteen about 44 years; at twenty about 40 years, and so on, decreasing year by year, till at last it dwindles down to nothing at all.
A period of grace, most commonly thirty days, is allowed after each life premium falls due. If it is not paid within that time, the conclusion is come to that the policy-holder intends to drop the contract.
It is a matter of great importance to be insured in a good office, and the most careful inquiry should be made on the subject before taking out a policy. “Safety,” says one writer, “ought to be the first consideration, and economy the second; but really, economy ought to be put first, for there is no economy in insuring in an unsound office, however low its premium may be.”
Life insurances on a small scale can be effected better, perhaps, through the Post Office than through any other channel. The Postmaster-General is authorised by an Act of Parliament to insure the lives of persons of either sex. The lives of children under eight years of age cannot be insured; from eight to fourteen they can be insured for not more than £5; and from fourteen to sixty-five they can be insured for any amount not less than £5 or more than £100. The security for the payment of the money at the proper time is the best in the world.
Forms of proposal for the insurance of lives are to be obtained at any Post Office Savings Bank, and anyone can see there the tables of the premiums to be charged, and obtain all other necessary particulars. As examples of the various ways in which insurance through the Post Office can be effected, take the following:—The life of a girl between fifteen and sixteen years old may be insured for £10 by an annual payment through life of 3s. 10d., or by an annual payment to the age of sixty of 4s., or by a single payment of £3 17s. Or she can assure £10 at the age of sixty years, after the payment of the final premium, or at death, should death occur before that age, by an annual payment of 4s. 6d., or by a single payment of £4 7s.
There are some companies which insure lives by the payment of a small sum weekly or fortnightly, a collector calling for the payments when they become due. This is a dear system; no more profitable than the purchase of tea half an ounce at a time. In these days of savings banks it is no excuse that it suits scantily filled purses. Instead of adopting it, it would be far better for their own interest if people of small means would lodge the sums they would otherwise have paid the collector in the Post Office Savings Bank, and at the end of the year direct that the amount be applied to the payment of an insurance premium.
Besides the two forms we have mentioned there are other varieties of insurance. You can insure plate glass against breakage, boilers against bursting, and crops against hailstorms. The lives of horses and cattle can be insured, and pig insurance companies are not unknown.
Insurance against accidents is another useful variety. It dates back from 1849, when a company was started to insure against the consequences of railway accidents. In return for a payment of 3d., 2d. or 1d. made by first, second, or third class passengers respectively, for insurance during a single journey, it undertook to pay £1,000, £500 or £200 in case of death by such an accident, or a certain weekly allowance in respect of personal injury not resulting in death. A few years later the business was extended, and people can now insure against accidents of all kinds by a yearly payment proportioned to the degree of risk supposed to attach to various occupations or other conditions of life.
There is another kind of insurance worth knowing about: Fidelity Guarantee Insurance, it is called. By means of it employers are guaranteed against the dishonesty or insolvency of their servants. Previously, people in positions of trust often got others to be surety for them, but the system of private suretyship led to many hardships. Solomon was right, and let all wise girls take note of it: “He that is surety for a stranger shall smart for it; andhe that hateth suretyship is sure.” The guarantee of a company, given as a pure matter of business, and for an annual payment, is now generally preferred. Of course, before giving a guarantee the company makes very particular inquiry regarding the character of the person and the checks to be used by the employer. Some companies insure only against embezzlement, whilst others protect the employer against any failure to make good the sums entrusted to theemployé. The premiums to be paid annually range from 10s. to 60s. per cent. of the sum guaranteed.
Annuitiesare our next subject. An annuity is a periodical payment made either for a fixed number of years or whilst a given life lasts. It may be paid yearly, quarterly, weekly, or otherwise. It may come to one as a gift, or be left as a legacy, but it can also be purchased through an insurance company by the payment of a certain sum of money supposed to be its equivalent in value. Annuities bought in this way may be eitherimmediate—that is to say, the payment of them beginning at once—ordeferred; in other words, the enjoyment of them postponed till after a certain number of years have elapsed. If, say, £100 is to be received each year by anyone, he or she is said to have “an annuity of £100.”
For young people, with all the chances of life before them, the purchase of an annuity is seldom wise. The sum, observe, sunk in this way can never be had back again, even though an opportunity should occur for making a much more profitable use of it. But when people grow up, it is often the best way to make the most of a small capital, and to prevent their becoming, perhaps, a little later in life, a burden on their friends. The great thing, in settling whether to invest money thus, is to discuss the matter with common sense, and to ask, “What should I do, so as to be most useful to myself and to others?”
Annuities, both immediate and deferred, are granted by the Post Office for any amount not less than £1 or more than £100 to any person not under the age of five years. Forms of proposal for purchasing them are to be had at any Post Office Savings Bank. The sum charged varies with the age and sex of the person on whose life the annuity is to depend, and, in the case of deferred annuities, with the number of years which are to elapse before the commencement of the annuity.
The payment of a deferred annuity may be made in one sum, or it may be broken up into a number of small payments at regular intervals. You can, by a slight increase on the payment for a deferred annuity, secure the return of the purchase-money to your representatives in the event of your death before the commencement of the annuity, or to yourself, should you for any reason wish to be out of the bargain.
A word of advice is given by a sensible writer to all who are life annuitants. “They should bear in mind,” she says, “to live well within their income, as generally the whole of their money is one oflife interest, and there will be no fund to fall back upon to pay funeral expenses, doctors’ bills, wages, etc., when they die, but their savings.”
Fire insurance, life insurance, and the purchase of annuities are amongst the sensible transactions of prudent and saving people. But sometimes the prudent and saving, quite through innocent misfortune, come down in the world, and have a difficulty in making both ends meet for the present, let alone providing for the future. Under these circumstances people without much experience, and especially women who are not business women, are very apt to fall a prey to the wiles of the professional money-lender. To the artful ways of the money-lending fraternity we shall devote what remains of this article.
If anyone is in want of a little ready money she has only to turn over the morning papers, and she will there see a score of advertisements headed “Money,” and all offering “loans on easy terms.” How is she to know, unless she has been told, that these petty money-lenders are one of the most serious evils of our present state of society, and that there are hundreds of them preying on the ignorance, the impulsiveness, and the necessities of their fellow-creatures?
“There is considerable variety,” says a writer in theLeisure Hour, “in the bait used by these angling money-lenders, but great sameness in the general form of the cruel hook by which poor silly fish are caught. Some of the advertisements are from ‘loan offices,’ others from ‘private gentlemen’ who are ‘willing to advance money’ and who have ‘no connection with loan offices.’ They all seem to have unlimited resources, from £2 to £1,000 being at the disposal of every borrower. The invitations are to respectable persons, male or female, in town or country; distance no object; personal application preferred, but not necessary. ‘Strict secrecy and prompt despatch’ are usually promised; answers to application ‘by return of post’ and money sent ‘at a day’s notice.’ So obliging are these gentlemen, ‘forms will be sentgratis,’ and in some cases the borrower is assured there are ‘no law costs’ and ‘no office fees.’ More convenient still there are ‘no securities required.’ To borrow is an easy matter after all.
“But of course there must be securities of some sort. Well, the borrower’s ‘note of hand’ is sufficient, with deposit of deeds, leases, life policies, or, if preferred, a bill of sale on furniture or other goods ‘without removal’ (i.e.at the time of borrowing). Then the repayment may be by ‘easy instalments.’” How accommodating!
Many of these assertions the needy borrower will find abundant reason to doubt before the loan is completed. On application she will be puzzled to reconcile the terms named to her with those in the alluring advertisement, and will find the rate of interest to be truly “five per cent. and upwards,” fifty per cent. being no uncommon demand, in addition to expenses connected with and deducted from the loan. Should she complain about the expenses, she is usually told that they are rendered necessary by the existence of some special risk in her particular case.
The writer whom we have just quoted tells a sad story of a poor widow lady, who, being pressed for her rent, saw a money-lender’s advertisement and answered it. The money-lender came, and obtained the lease of the house as a security, “only a form, you know.” He was such a polite, kind man; and interest, she understood, was to be only £5 per cent.
Soon after the widow had an offer for her house and furniture, so she went to redeem the lease held in security by the money-lender. The poor woman, who had signed the papers presented to her, either without reading them or without thoroughly understanding them, then learned for the first time that “£5 per cent.” did not mean £5 a year for the loan of a hundred pounds. The money-lender’s advertisement did not say “£5 per cent. per annum.” He lent his money at £5 per cent. per month, or £60 for a year for £100, besides various fees and charges. The moral of the story is that it is very foolish to have anything to do with money-lenders, and that it is still more foolish to go into any transaction without making perfectly certain as to the exact amount for which one is liable.
There are some money-lenders who only pretend to lend: as a matter of fact, they never do. Their profits are derived solely from booking fees, office expenses, and charges for the sham “inquiry,” which always is of so unsatisfactory a nature that the loan cannot be granted. It is true the advertisements of these gentry often state that no preliminary fees or office expenses of any kind are charged. The borrower, however, is in such cases informed that these payments are dispensed with only in the cases of certain classes, in none of which, we need hardly say is she fortunate enough to find herself.
(To be continued.)