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.
KINDS OF CONTRACT
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.
AS TO REPAIRS
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.
SUBLETTING
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.
WHAT IS A GUARANTY?
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 guarantee the payment of the within lease (bond or contract). George L. Roberts.”
Short Hills, N. J.
October 1, 1910.
A BILL OF SALE
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 of bay horses, with their harness, one family carriage, 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.
OBLIGATIONS
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.
CHAPTER XIX
LIFE INSURANCE
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.
HOW IT IS DONE
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.
AS AN INVESTMENT
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.
FORMS OF LIFE INSURANCE
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.
MUTUAL INSURANCE SOCIETIES
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.
AMOUNTS OF POLICIES
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.
POLICIES AS SECURITY
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.
LAPSES
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.
PROPRIETARY AND MUTUAL COMPANIES
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.
CHAPTER XX
FIRE AND ACCIDENT 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.
LIKE GAMBLING
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.
WHAT IS FIRE INSURANCE?
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.
PREMIUMS
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.
COLLECTING
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.
INSURABLE PROPERTY
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.
MUTUAL COMPANIES
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.
STOCK COMPANIES
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.
ACCIDENT INSURANCE
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.
CHAPTER XXI
PARTNERSHIPS
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.
PREPARE AND SIGN
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.
SILENT PARTNERS
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.
LIABILITY
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.
HOW TO DISSOLVE
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 existing between John Smith, Harry Roberts and
Thomas Allen, under the firm name of Smith, Roberts & Co., is this day
dissolved by mutual consent.
John Smith.
Harry Roberts.
Thomas Allen.
June 30, 1910.
SPECIAL PARTNERSHIPS
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 a _pro rata_ in 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.
CHAPTER XXII
INVESTMENTS
It is a remarkable fact that many men who have shown remarkable shrewdness in conducting a business in which a fortune may have been accumulated, exhibit the judgment of children when it comes to making investments.
There are able lawyers who have made fortunes in the practice of the profession which they understood, only to lose them by investments in mines or other ventures, about which they knew absolutely nothing but what was told them by the scheming speculator and smooth-tongued promoter.
As has been intimated before in these pages, there is a great difference between saving through and hoarding through a spirit of miserliness.
SAVINGS
Every wage or salary earner, no matter how small his compensation, should try to lay by something of that little as a provision against the unproductive days.
No matter how small the amount a man has set aside, after paying for life’s necessities and meeting all just debts, he is to that extent a capitalist.
The miser would hide his savings out of reach, but the man with the foresight to save will usually have the judgment to place these savings where they will fructify and grow, producing the fruitage known as interest.
The young man or the young woman, or any one else who places his little accumulations in a savings bank, has begun a form of investment that may, if persisted in, place him or her above want, even if it does not entitle either to a place on the lists of great capitalists.
CAPITALISTS
The capitalist not only has money of his own to invest, but he may and very often does need more money properly to exploit the enterprises in which he is engaged.
Money loaned to such men, after being assured of their ability and integrity, is an advantage to the lender as it is to the user.
The lender’s profit is assured if the enterprise does not fail, and the added capital not only insures against failure, but it may enable the manager to succeed beyond any expectations he could have if forced to carry on the work with only his own resources.
The capitalist may choose to buy land in the suburbs of a city and build thereon a house to be sold or rented. This should always be made to secure the money borrowed.
A capitalist may establish a fund from which, on good security, the business men of the community may obtain loans, for which they get a higher interest than that which they undertake to pay to those whose money they are using.
Again a capitalist may undertake to loan to farmers, who have not the means to carry on the work, but who are anxious to make their lands more productive, through drainage and crop rotation. In this case the money loaned is secured by the usual bond and mortgage.
Or it may be that another body of men is anxious to start a great manufacturing enterprise in the neighborhood, but has not enough money to place the venture on a paying basis.
In the latter case it appeals to the capitalist, and he, though not bearing enough available means of his own, undertakes the work with the knowledge that he can rely on the small investors, whose contributions he has before managed successfully.
STOCKHOLDERS
Or it may be that the manufacturing company does not ask the capitalist to assist, but itself goes to the small investor with a prospectus of the enterprise, and offers to sell stock in the concern at $50 or $100 a share, as the case may be.
This gives a chance to enjoy the profits, be they great or small; but with the chance for larger profits there comes the greater risk which must always be assumed in such cases.
Sometimes, when a company is starting, its stock may be put below par. This stock, in the event of success, may appreciate, as with some bank and other corporation stocks, many times above the par value.
When stocks sell in the open market for their face value, they are said to be at par.
KINDS OF STOCKS
Most companies, organized on a stock basis, issue stocks of two kinds. One is known as “common” the other as “preferred.”
As the name implies, preferred stock (its rate of interest is always fixed) is entitled to be paid out of the net dividends first.
Whatever is left after paying the preferred stock interest is divided up equally among the shares of common stock, each getting according to his holdings.
Sometimes the dividends on common stock are far greater than those on the preferred. The preferred stock dividends are regarded as a fixed charge, but there can be no limit as to the payments on the common stock, if the funds are available.
The stocks of railroads, factories, banks and other enterprises may be good forms of investment, and for this they are often held for long periods by investors for revenue.
Most stocks, however, particularly of railroads, are continually changing hands. The buying and selling of such securities has grown to be an enormous business, managed largely by men known as “stock brokers,” many of whom are strong factors in the financial world.
As a rule, the buying and selling of stocks through brokers is a hazardous form of speculation, which has in it all the elements of gambling, and we cannot advise too strongly against it.
There is another kind of stock, which some companies keep in their safes to meet an emergency. This is known as “treasury stock,” and, like the preferred, its rate of interest is fixed.
Let us suppose that a company is capitalized and prints stock to the amount of $100,000.
This company sells $80,000 worth, and the officers believe that they can force the enterprise to success with the money on hand.
Now, it follows that, with the same amount of earnings, the profits on $80,000 will be greater than on $100,000, so the $20,000 unsold stock is held in reserve.
If to extend the business, or for any other reason, it is necessary to have more money, the treasury stock may be sold to secure the extra capital.
If the business is placed on a basis where its success is beyond all question, then the treasury stock may be divided _pro rata_ between the holders of the other stock, for, till disposed of in some way, it was an asset common to the whole company.
Each stock certificate tells when dividends are declared; they may be paid quarterly, half yearly, or annually.
CHAPTER XXIII
BONDS AS INVESTMENTS
The best way in which savings can be invested is to use them in the extension of the business in which they were made.
The wage earner and the man on a salary cannot, of course, do this, but the farmer, the small tradesman, and the mechanic, who is his own employer, may be able to do so. And so, before looking for a field for investment outside, such men should look about them and consider how best the money may be used right on the ground.
AS TO BONDS
But after considering the points suggested, the man who has some money may not be able to find a secure and profitable place for it in or near his own home. One of the safest forms of investments is bonds, though, as with other forms of security, the rate of interest declines as the margin of safety increases.
If a well-established stock company should wish for any reason to increase its available cash, it may issue bonds, or certificate of indebtedness, bearing from four to five per cent interest, payable semi-annually.
These bonds may be transferred the same as stock. They are a good form of security when it is desired to borrow money from the bank, and for many purposes they are as available as so much cash.
Such bonds are issued for a specified number of years and have coupons attached, which are cut off when interest is due, and presented to the treasurer of the company for payment.
These bonds are secured by a mortgage or deed of trust on all the property of the corporation they represent.
To redeem these bonds, when due, the company annually sets apart a sum, known as a “Sinking fund,” for their redemption.
Such bonds are far safer than any form of the company’s stock, for they bear interest that must be met, whether or not dividends are declared.
As with a real estate mortgage, the property pledged in the bond should be defined.
RAILROAD BONDS
Every railroad in the country has been built and equipped by the sale of its bonds. In such cases amounts of stock of the same, or approximately the face value of the bond, have been given to the purchaser as a bonus or inducement. Of course, the controlling stock is always retained by the promoters; and it is through the representation of this stock that all the business of the corporation is carried on.
The cases are few where any money was paid directly for the original issue of any railroad stock.
Bonds sold to build a road are usually known as “construction” bonds. There may be another bond issue for equipment–with a stock bonus–and still other bonds, each series stating the property pledged and the purpose for which the money from sales is to be used.
The _Christian Herald_, in one of its recent financial articles, clearly defines this species of bonds, as follows:
“Railroad bonds are usually pledged by the President and Treasurer of the railroad and by the Trustees, to whom the bonds are made out, and who must defend the rights of bondholders, should the company fail to meet any of the obligations it undertook in the mortgage deed.
“In other words, a bond is the Corporation’s promissory note for the money originally paid by the investor, with interest for the same, to be paid to the investor in stated amounts at stated intervals; and to guarantee its good faith in the matter, the Company pledges the bondholder an interest in certain property in its possession. It follows that a bond has a first call upon the property rights of the corporation; that it represents something tangible; that it pays a definite amount of interest, and that it may be reduced at its full value at a certain time.”
BUYING BONDS
Bonds, like wheat, have their selling prices quoted from day to day, and they are equally a thing of purchase and sale.
There are banks and brokerage firms that make a specialty of bonds, and most of these houses are entirely reliable; still, the novice in such things would do well to investigate for himself before investing in any bond recommended by any seller.
It is the purpose of the seller to sell; it should be equally the purpose of the buyer not to be “sold.”
Our government, state and municipal bonds speak for themselves, and in the main require no examination as to the security, though there have been cities and even states that have defaulted in their payments.
Bond houses and banks of established reputation cannot afford to deceive; they receive their compensation in the way of commissions on sales, and their characterization of the bonds may be accepted without question, for they invariably investigate the bonds, before they lend their names to them by offering them for sale.
If there is any doubt in the mind of the would be purchaser as to the character of the seller, that should be the first thing investigated.
What the buyer must satisfy himself of is:
1. Who is the seller?
2. What do the bonds represent?
3. Are they negotiable? and
4. Can they be sold again for about their face value?
Every one who has saved money, it is to be supposed, has a bank account and is acquainted with the president of his local bank. When in doubt, the advice of such a man may be of great help.
CHAPTER XXIV
THINGS TO REMEMBER
If a man is making a living he should not change his business after he has passed middle life, unless, indeed, he has a guarantee that the new venture will be greatly to his advantage.
The best business for the average man is that which affords him the most pleasure in carrying it on, or at least with which he is most familiar.
Happiness in one’s work means far more than the accumulation of a fortune in discomfort.
DON’T DECEIVE YOURSELF
Having made your credit and business standing good, keep them good by an adherence to the same course.
If you can avoid it, do not loan your name to every needy friend that comes along. Your neighbors question your good judgment every time you have to meet a note which you were coaxed into endorsing. You would have saved yourself by loaning the money outright.
Do not deceive yourself into the belief that you are making money when, as a matter of fact, you may be losing.
You buy an article for two dollars and sell it for two and a half, and you say to yourself: “There is fifty cents made.” But is it? Let us see.
Before crediting your business with that fifty cents, you should have considered these points.
1. The loss of interest on that two dollars. 2. Your own time or other time paid for. 3. The capital invested in things not sold. 4. The rent.
5. The transportation, insurance, heat, light, bad accounts, unsalable goods, taxes, public donations, and the flood of items that go to swell the outlay of every merchant, whether in the great city or at the country crossroads.
WEEDING OUT
Every man in trade should make an inventory of his stock at least once a year. Having done this, he should give his stock a fresh appearance, whether new goods be added or not, by relegating to the scrap heap, cellar or the garret all the dingy, dirty, disreputable stuff that he could not sell or give away, and which has induced sore eyes whenever seen.
Keep a stock book.
Quite as important as keeping the stock in order is keeping the books in good shape.
At least once a year the books should be weeded out. Why carry as bills collectable accounts which you have been assured, for years, would never be paid?
Wipe them out and charge them to profit and loss.
Where machinery is used, it is a good plan to charge off every year ten per cent of the cost; this to make good the loss from wear and tear.
It is only by annual house cleanings and account clearings that you can tell about how you stand.
LET YOUR WIFE KNOW
It is usually wise for a woman, married or single, to keep her real estate and her money, if she have any, in her own name. So also with property bought with her money.
In these cases the woman should deal with her husband, or the members of her family, the same as she would with strangers with whom she is transacting business.
Some may say that this suggests a want of confidence and a lack of that affection that should exist between husband and wife or near kinsfolk. Such an objection is sheer sentimentality. Be as open handed and generous as you will with your loved ones, but when it comes to business, let the work be done in a strictly business way or not at all.
Many a good business has gone to ruin after the death of the owner and manager because he had kept his wife in blank ignorance of his affairs and the way in which he conducted them.
Many a business, that just dragged along till the death of the manager, has sprung into new life when the widow took charge. This must in part be credited to natural ability and inborn pluck and energy, but even these gifts could not have availed if the woman had been left in ignorance of business methods.
Women, like men, are awkward in new positions, not so much from a want of ability as a lack of experience.
Put the average man suddenly in charge of a house, and he will soon demonstrate his helplessness. The woman’s deftness comes from her experience.
As far as it is possible, every husband should post his wife as to his methods of doing business.
He should not keep her ignorant of his financial affairs.
If he conceal from her the amount of his secure holdings, it may be that he hopes to surprise her at his death, or long before that event. But if he have any regard for his family, he should not hide from her the obligations which may spell ruin if the wife is not prepared in advance to meet them.
Whether the husband lives or dies, the wife must still care for the children and attend to her never-lessening household duties. Think of her as taking on the added burdens of a business of which she is ignorant.
There are many prosperous husbands to whom what has just been said will not apply, but if you should ask them the secret of their success they will not hesitate to tell you that when they married they took their wives into full partnership, business secrets and all.
CHILDREN AND BUSINESS
When you send your children to school it is that the training there received may qualify them to fight the better the ceaseless life battle.
Of course, we should not regard all education from a business viewpoint. Money apart, learning is its own greatest reward.
It widens the horizon at every step, and lifts the soul into strength and a profounder worship. But it will not do to overlook the business side of the training which the child should receive in school and out of it.
It is all very well to teach children the sources of the family revenue and the way to secure it. It is right that they should be impressed with the dignity of labor and trained in the ways of earning money, but it is far more important that they should be taught how to spend money, so as to get the most good from it, once it is earned.
The boy or girl is in a safe way to learn self-control and build up character when he or she, with some nickels at command, can pass a candy or a fruit shop without being compelled to spend their cash assets.
Children, wherever it is possible, should be given opportunities for earning money, which they can feel is “really and truly” their own.
They should not be made to feel that the money is not actually theirs, to do with as they please, but they should be taught self- denial, and that they must not get rid of their earnings by the purchase of things not needed.
On the farm, children unconsciously learn much through occasional work and constant observation, but away from the farm, boys and girls are apt to know little or nothing of the work in which the father, the bread winner, is engaged.
Where it is possible, the children should be made familiar by actual contact with the father’s work.
This knowledge may never be used, still it will have value as a factor in the child’s training, for in our modern life all business is inter-related.
Let the youngsters know something about banks by entrusting them there when old enough.
Teach them to keep accounts of their own little money affairs, their earnings, their expenditures, and their balances.
If they should borrow, even a cent, see that they return it at the time agreed on. Impress on them the fact that debt is a burden which it is well to get rid of as soon as possible, if one would stand erect and be entirely free.
All this can be quietly inculcated into the mind of the child without making him old-fashioned or miserly. The more he knows of the world the more he can enjoy it in a wholesome way.
CHAPTER XXV
WORTH KNOWING
If things are said in this chapter that seem like a repetition of things already told, it is that their importance warrants a repetition in another form.
OVER-GENEROSITY
“There are no pockets in a shroud,” it is said. True it is that we cannot take material things with us to the other side of the grave, and so before the end comes it is well to make preparations for their disposition.
There are three ways of getting possession of property:
1. To have it given.
2. To earn it.
3. To steal it.
We shall not consider the last method; that is the business of the law, but let us look at the first.
Property is given in two ways:
1. By direct gift from one to another. 2. By will, when the amount is payable on the death of the donor.
Of course, the widow and children, if there be any, are first to be considered in either of the cases named.
Many people, when the end is nearing, think that it is better to make sure that their wealth will reach the right hands by giving it direct and at once.
Now, no matter the nobility of the motive that prompts such an act, it is one which, on the whole, cannot be commended.
It is all very well to spend available means in order to set a son or daughter up in business, but such sums, if there are other heirs, should be charged against the share of the probable donee, with interest, and a record made of the same.
Under no circumstances should old people, who, after raising a family and living honorable lives, have saved enough to own their home and secure an income for their declining years, deed or give this property to their children, or to any one else, in consideration of their having all their subsequent wants met.
The better way for the farmer, the merchant, or the manufacturer, when he feels the years pressing heavily and that he can no longer attend properly to the old demands on him, is to shift by a properly drawn contract the business management of the enterprise to his children, or to those whom he wishes to place in charge.
In this way the ownership is not changed, and if the new management should prove to be inefficient, it can be placed in more efficient hands.
CARE OF WILLS
As has been said, every person having property of any kind to dispose of should make a will.
Already ways have been given as to how wills should be made and estates administered, but to these it may be well to add another point.
Do not imagine that the making of a will shortens life.
Too often, after the demise of a testator who it is known has made a will, the heirs cannot find the document, and the lawyer who drew it knows nothing more about it.
Many men leave their wills with their lawyers. If this should not be done, then it would be well to keep it in the safe of the bank in which the testator has his account.
But whether in these places or another, there should be no doubt as to the existence of a will, or the place in which it may be found.
Only the last will should be kept; all preceding wills should be destroyed.
CARE OF PAPERS
While writing about the care of wills, we are struck with the recollection that wills are not the only papers of value that are apt to be mislaid or lost.
Never pay out money without taking a receipt, and never receive money without giving one.
You are not responsible for the care of the receipts you give, but you certainly are for the receipts you receive.
The trained business man has a place for everything, but there is no reason why the man not so well trained should have to turn his shop or his home upside down every time he wants a paper that proves he has paid a bill, which he must pay again if that receipt is lost.
Everything may be regarded as “lost” that cannot be found, even if you are sure “it is about somewhere.”
No valuable paper should be “about.” The only place for it is just where you can lay your hand on it when wanted.
In addition to keeping your papers where they can be found the instant they are wanted, see to it that every paper is self- explanatory and clear of meaning on the face of it.
CHECKS AND STUBS
It has been advised that the stub be always filled out before the check, and that the check be then copied from the stub. This course will greatly lessen the chances of disagreement between the two.
When the last check in the book has been filled and torn out, do not throw away the stubs. They contain important data and may be of use in proving payment should a question arise.
In like manner, never destroy the cancelled checks handed you by the cashier when your bank account has been balanced. Each of these checks, if drawn to order as it should be, is a receipt, a voucher, for some payment that may possibly be demanded again.
Be on the safe side.
SENDING AWAY MONEY
It may be well to repeat again, in more condensed form, just how money may be safely sent to a distance.
1. By bank draft, payable to your order and endorsed over to the person whom you wish to pay. The party receiving the draft must endorse it before he can collect, and this endorsement is a receipt for the money, as the cancelled draft must eventually come into your possession.
2. You can buy an express order up to fifty dollars, but you may send money in a package to any amount. Only banks or large dealers in money do this. Like the bank draft, the express order must be endorsed by the receiver, and the express company returns it to you, when it becomes a receipt.
3. By post office orders, up to one hundred dollars. 4. By postal notes, in small amounts.
5. By telegraph.
6. By transmitting a personal check. 7. By a trusted messenger authorized to get a receipt.
The bank draft is the very best way of transmitting money.
As has been said, drafts can be bought at any bank, and they should always be made payable to your order.
You want to pay a bill of goods to Lloyd, Smith and Company, New York, so you sign on the back of your draft for the amount:
Pay to the order of
Lloyd, Smith and Company,
Henry C. Robbins.
Lloyd, Smith and Company must endorse the draft before it can be cashed. The draft, after payment, is returned to you, and it becomes the best form of receipt.
LOST IN MAILS
Were you ever at the Dead Letter Office in Washington? If you have never paid such a visit, you can form no conception of the tons, the hundreds of thousands of letters and parcels that are lost every year in the mails.
Unaccounted for drafts, checks, postal orders, books, jewelry, medicine, everything, indeed, that the mails will agree to carry, may be found piled in that cemetery of lost communications, the Dead Letter Office.
Have you added to the mortuary list?
All these deaths, like many of living creatures, are due to carelessness.
As a rule, the sender is to blame. He has misdirected. He has placed papers not properly folded in the envelope and then neglected to seal it. He has neglected to write any address at all, and dropped the letter into the box. Again he has addressed the parcel, but neither men nor angels can decipher the writing.
MORE ABOUT NOTES
The note, as has been said, is one of the most usual forms of obligation, yet misunderstandings often arise as to its settlement.
Here are the points that must be attended to, nor shall we offer any excuse for repeating them collectively:
1. The date and amount must be so plainly written as to leave no doubt as to either.
2. The rate of interest, if any, must be clearly expressed. 3. The post office address of the signer or signees must be written opposite the name.
4. The note should be made payable at a definite place and on a definite date.
5. In taking a note or other obligation from a person who cannot write, be sure to have his “x” mark witnessed.
Should you receipt certificates of stock as security for the payment of a note, or the payment of any other debt, be sure to notify the company issuing them.
In giving this notice, which should be done at once, state clearly the number of shares you hold, the number of the certificates and to whom issued.
The enforcement of this rule will depend altogether on the character of the person with whom you are dealing.
Never, if you can help it, buy a past due note, especially if it is not secured by a mortgage.
If a note, which a third party has endorsed, becomes due, never agree to an extension of time without getting the written consent of the endorser.
Many men have lost through their ignorance of this essential transaction.
CHAPTER XXVI
LOOK BEFORE YOU LEAP
We are not quite through with the note.
When making a payment of principal or interest on a note, be sure to take a receipt for the amount, stating specifically what the payment is to be credited to. In addition, if it be possible, see that the sum paid be endorsed on the back of the note itself.
The endorsement of the sum paid on the back of the note bars its being negotiated for more than the amount actually due.
Sometimes the owner and the maker of a note live at points some distance apart. If you were the maker of the note, and wanted to make a payment, but wished to avoid the expense and annoyance of a trip, what should be done?
In this case a good plan would be to write to the owner of the note, asking him to send it by a certain bank in your neighborhood where you can pay. The bank will receive the cash, make the endorsement in your presence, and then send its check for the amount with the note to the owner.
You must pay the cost of this transaction.
Or you may send the amount to be credited on your note, through a bank draft, as already indicated.
Never destroy a cancelled note.
NOTES IN BANK
If you have money at a bank your note will form the chief evidence of indebtedness and be the paper for which the security is pledged.
Keep careful track of the date of payment and the amount. There must be no neglect or carelessness.
Never permit your note to go to protest.
If for any reason payment cannot be made at the time fixed, then the better way is to go, as soon as this is learned, to the bank or other holder of the note, and frankly explain the situation.
Bankers are not shylocks. They realize that good and responsible men are often disappointed in their collections, or in the payment of a sum on which they depended for the settlement of their account with the bank, and in such a case they are usually willing to grant an extension.
Private individuals, as note holders, should be treated in just the same way.
WELL TO KNOW
When calling at a bank for your note, always give the exact date on which the note falls due.
If the note belongs to another party, and is held by the bank for collection, then mention the name of the person to whom it was originally given.
If the bank has sent you a written notice about the note, take the notice with you. It will be found to contain all the desired facts.
Banks keep their own notes in one place and those of their customers in another.
Banks keep each date by itself, and can so find required notes more readily if the owner’s names and the dates are given.
DISCHARGING LIENS
Remember a mortgage is a lien or security given for the payment of a note.
If you get a mortgage, have it recorded at once.
If you pay off a mortgage, take it at once to the office of record and have the discharge of the instrument properly entered on the folio in which the mortgage is recorded.
Many lawsuits have resulted from the temporary neglect of this important duty.
BE PROMPT, BUT NOT TOO PROMPT
Sometimes a man will give a number of notes and secure them by one mortgage.
The notes may pass into the hands of a number of people.
Let us suppose that you hold one note and the mortgage, and that the mortgagee comes to you and tenders the amount of your note, should you then surrender the mortgage to him?
By no means, until the last note is paid that mortgage remains as security, and the holder of it is responsible for its safety to the holders of the other notes.
In such a case it is better to have the mortgage held by one party for the protection of all.
BE IN NO HASTE TO INVEST
When a person not accustomed to managing money comes into the possession of a sum that it is not safe to carry about in the pocket, what should he do with it?
Obviously the first answer to this question must be “He should put it in the bank.”
We have already given hints as to investments, and to these it is not necessary to refer again, we are now considering another and not an unusual phase of such a case.
Young men and women of all ages are very apt to be inexperienced in these matters. As soon as it becomes known that such people have come into the possession of a goodly amount of cash, which they are not considered competent to manage, it is surprising how past acquaintances suddenly pose as old and unselfish friends, each with a scheme for doubling the money while the owner is looking at it.
Now, there may be good, honest friends who are eager to advise and help in a case of this kind, but they are sure to be outnumbered by advisers who have their own little axes to grind.
Our advice is “Don’t be in a hurry to invest. Your cash is quite safe while in bank.”
But no matter how promising, do not invest your money in a business you know nothing about, even if it does carry with it a position and a salary.
Find a good honest lawyer, despite sneers to the contrary, we believe most men in the profession are of this character, and ask his advice, and pay for his help if papers are to be drawn.
Buying rentable real estate is usually a good investment, provided always that the price is reasonable, the title clear, and the chances of its advancement pretty certain.
MEET YOUR DUES PROMPTLY
It is estimated that every man and woman in the United States belongs to one or more societies of some character, and this is not an overstatement.
Every member of such an organization is such by reason of election and the payment of dues.
If you are a member of, or a pledged contributor to, a church, lodge, grange, or other society, you should regard the prompt payment of your dues as sacred as any other form of obligation.
The expenses of a properly conducted church are always considerable, even in small communities. It is a disgrace to the Christian organization that, after forcing down the pastor’s compensation to the barest cost of life’s necessities, then force him to run into debt if he and his family would live, or to be forced continually to remind the trustees that his salary is far in arrears.
If you belong to a lodge or other society, leave it if you honestly feel that you cannot afford the dues. Neglect to do this and your name will be dropped from the rolls on which it never should have been placed.
COUNTING MONEY
Never receive money from any one without counting it. Count it at once and in the presence of the giver.
Let it make no difference, banker, merchant, kinsman or friend, do not fear to give offence, but right then and there, count the money he gave you.
Of course, these people are honest, but did it ever occur to you that honest people often make mistakes?
Whenever you pay another money, if he does not do so himself, you should insist that he count it in your presence.
If you do this you won’t lose a friend, but if you do not do it you may make an enemy, should the man come back to say you made a mistake and underpaid him, and you very properly refuse to honor his claim.
READY MONEY
Do not, if you can possibly avoid it, keep money around your house, in your place of business, or on your person.
The professional thief is ever on the watch for chances to take unto himself all the money in sight.
Pickpockets reap their harvest from money carriers.
The burglar may steal or fire may destroy money left in the house.
A bank, if not near one then a safe, is the best place for money, though safes have been broken into and robbed.
Do not make a display of money at any time, but particularly in a public place.
If you are drawing money from a bank, count it quickly and quietly, then secure it in an inside pocket that cannot be reached without unbuttoning.
Never cash a check for a man whom you do not know to be square.
The same applies to the endorsement of checks.
IN TRAVELLING
Always be courteous in travelling, but never take the chance acquaintance of the steamboat or car into your confidence.
Keep an eye on the man who “fortunately is going just your way.”
Watch out for the fellow who knows the leading men of your town and is a cousin of Judge Smith.
Do not respond if such men ask you to cash a small check or make a slight advance till his draft arrives.
Do not accept the invitation of strangers to visit any place.
Avoid the confidence of the over-dressed, but slightly intoxicated young fellow who “has been out with college chums.” He is not a college man, nor has he been drinking.
CHAPTER XXVII
CONTRACTIONS AND SIGNS USED IN BUSINESS
” Italian ditto–The same as above. ° Degrees.
‘ Primes, Minutes, Test.
” Seconds, Inches. Thus, 7° 20′ 10″ in circular measure, or 7′ 20″ 10”’ in duodecimal long measure. I1 One and one-fourth.
I2 One and one-half.
I3 One and three-fourths.
+ Latin plus, more–Addition.
– Latin minus, less–Subtraction. X By, or into. Multiplication. Also area, as 20 X 5, read 20 by 5, means 20 long and 5 wide. ÷ Divided by–Division. The : above is also a sign of division as used in ratio, thus, 4:7; and the alone is a sign of division as used in writing fractions, thus, 4/7.
= Equals. The double ::, as used in proportion, is also a sign of equality, thus, 4:7::12:21. % Per centum. By the hundred. Rate of interest. P Per, by or through.
$ Dollars; said to be a contraction of U. S. for United States money.
# Means Number, if before a figure, as #90, but pounds if written after, as 90#.
@ Latin ad., meaning to or at.
A1. First Class, the best.
A. or Ans. Answer.
Acc., Acct. or a/c, Account.
Adv. Latin ad valorem, according to value. Admr. Administrator.
Admx. Administratrix.
Adv. or Ad., Advertisement.
Agt. Agent.
Amt. Amount.
a/o At sight or Account Sales.
Ass’d. Assorted.
Asst. Assistant.
Bal. Balance.
B.B. Bill Book.
Bbl. Barrel or Barrels.
Bdls. Bundles.
B/E Bill of Exchange.
Bgs. Bags.
Bk. Bank; Book.
Bkts. Baskets.
B/L Bill of Lading.
Blk. Black.
Bls. Bales.
Bot. Bought.
B.P. Bills Payable.
B.Rec. Bills Receivable.
Bro’t. Brought.
Bu. Bushel or Bushels.
Bx. Box or Boxes.
Cash. Cashier.
C.B. Cash Book.
Chgs. Changes.
Chts. Chests.
C.H. Court House; Custom House.
C.F.S. Carriage and Insurance Free. Cks. Casks or Checks.
Clk. Clerk.
Co. Company; County.
C.O.D. Cash, or Collect, on Delivery. Col. Collection.
Com. Commission.
Const. Consignment.
Cor. Sec. Corresponding Secretary.
Cr. Credit; Creditor.
C.S.B. Commission Sales Book.
Ct. or c. Cent, Latin Centime, a hundred. Cts. Cents.
Cwt. A hundred weight.
D. B. Day Book.
D/d. Days after date.
Dept. Department; Depment
Dft. Draft; Defendant.
Disct. Discount.
Div. Dividend, Division; Divide, Divisor. Do. The same.
Doz. Dozen.
Dr. Debtor; Doctor.
D/s or d.s. Days after sight.
ea. Each.
E.E. Errors excepted; Ells English. E.g. Latin Exempli gratia. For example. Encl. Enclosed.
E.&O.E. Errors and omissions excepted. et. al. Latin et Alii, And others.
Exch. Exchequer; Exchange.
Ex’x. Executrix.
Exp. Export; Exporter; Expense.
Fahr. Fahrenheit.
Fav. Favor.
Fir. Firkin.
Fo. or Fol., Folio.
F.O.B. Free on Board.
Fo’d. Forward.
fr. From.
Frt. Freight.
Gal. Gallon; Gallons.
Gr. Grain, Grains.
Guar. Guarantee.
Hdk’f. Handkerchief.
Hf. chts. Half Chests.
Hhd. Hogshead.
Hon. Honorable.
Hund. Hundred.
I.B. Invoice Book.
i.e. Latin id est. That is.
Incor. Incorporated.
Ins. Insurance.
inst. Instant, the present month. Int. Interest.
In trans. Latin, In transito. In the passage. Inv. Invoice.
Inv. Inventory.
Jr. Junior.
Kg. Keg.
L or lb. Latin Libra, A pound in weight. L/C Letter of Credit.
Led. Ledger.
L.F. Ledger Folio.
L.S. Left Side, or in Latin, Locus Sigilli, Place of the Seal.
M. One thousand.
Manuf. Manufacture; Manufacturer.
Mdse. Merchandise.
Mem. Memorandum.
Messrs. French Messieurs, Gentlemen, Sirs. Mf’d. Manufactured.
Mfst. Manifest.
Mme. Madame, French.
Mmes. Mesdames, plural.
Mo. Month.
Mol. Molasses.
Mr. Master or Mister.
Mrs. Mistress, usually pronounced “Missis.” Mtg. Mortgage.
N.A. North America.
Nav. Navigation.
N.B. Latin Nota bene. Note well, or Take Notice. No. or # Number.
N.P. Notary Public.
O.B. Order Book.
O.K. All Correct.
Oz. Ounce or ounces.
P. Page; pint; pile; part.
Payt. Payment.
Pcs. Pieces.
Pd. Paid.
Per an, or p. a., Latin per annum. By the year. % Per cent. By the hundred.
Pk. Peck.
Pkg. Package.
P.& L. Profit and Loss.
P.O.D. Pay on Delivery.
P.O.O. Post Office Order.
Pp. Pages.
Pr. or per. By.
Prem. Premium.
Prox. Latin Proximo menve. Next
month.
P.S. Post Script.
Pub. Publisher; Public.
Pwt. Pennyweight.
Qr. Quire; Quarter, 28 lbs.
Qt. Quart; Quantity.
Rec’d. Received.
Ret’d. Returned.
R. R. Railroad.
Ry. Railway.
S.B. Sales Book.
Sch. Schooner.
Shipt. Shipment.
S.O. Seller’s Option, a stock phrase. Sig. Signature.
S.S. Steamship.
St. Saint; Street; Sight.
St. Dft. Sight Draft.
Stor. Storage.
Str. Steamer.
Sunds. Sundries.
Supt. Superintendent.
T.B. Time Book.
Treas. Treasurer.
Ult. Latin, Last Month.
U.S.A. United States of America. United States Army.
U.S.M. United States Mail.
U.S.N. United States Navy.
Ves. Vessel.
Via. By way of. Latin.
V.-Pres. Vice-President.
Viz. Contraction from Latin videlicet. Namely, to wit. Vol. Volume.
Vs. Latin versus. Against.
W.B. Way Bill.
Wt. Weight.
X Extra.
XX Doubly Extra.
Y. or Yr. Year.
Yd. Yard.
CHAPTER XXVIII
WORDS AND PHRASES USED IN BUSINESS
ACCOUNT CURRENT. A running account between two persons or firms. ACCOUNT SALES. A detailed statement of the sale of goods by a commission merchant, showing also the charges and net proceeds. ADMINISTRATOR. A man appointed by the Court to settle the estate of a deceased person.
ADMINISTRATRIX. A woman appointed by the Court to settle the estate of a deceased person.
AD VALOREM. According to value. A term used in the Custom House in estimating the duties on imported goods. AFFIDAVIT. A written declaration under oath. ANNUITY. An annual allowance; a sum to be paid yearly, to continue for life or a fixed period.
ANNUL. To cancel; to make void.
ANTEDATE. To date before time of writing. APPRAISED. The act of placing a value on goods. APPRAISER. A person appointed to value real or personal property. ARBITRATION. The settlement of a disputed question by a person chosen by the parties to the dispute.
ASSETS. The total resources of a person in business. ASSIGNEE. A person to whom the property of a bankrupt, or an insolvent debtor, is transferred for adjustment for the benefit of Auditors.
ASSIGNMENT. The act of transferring property to the Assignee. ATTACHMENT. A warrant for the purpose of seizing a man’s property. BALANCE SHEET. A statement in condensed form, showing the condition of a business.
BANKABLE. Receivable at a bank at par or face value. BANK BALANCE. Net amount on deposit in bank. BILL OF LADING. A written account of goods shipped, and the condition of same, having the signature of the carrier, and given to shipper as a receipt.
BILL OF SALE. A bill given by the seller to the buyer, transferring the ownership of personal property. BOARD OF TRADE. An association of business men for the regulation of commercial interests.
BONA FIDE. Latin, in good faith.
BOND. An instrument under seal, by which a person binds himself, his heirs or assigns, to do or not to do certain things. BONDED GOODS. Goods stored in a bonded warehouse or in bonded cars, the owner having given bonds securing payment of import duties, or of other sums due the Government, upon their arrival at some specified place at a specified time. BONDED WAREHOUSE. Is a building in which goods are stored until the duties or revenues on them are paid. BONDSMAN. One who goes security for the faithful performance of a contract.
BONUS. A premium for a loan or other privileges. BROKER. An agent or middleman between the buyer and the seller. BULLION. Uncoined gold or silver.
CHARTER. A written authority from the proper National or State authority defining the rights and privileges of corporations. CHARTER PARTY. A written contract for the hiring or chartering of a ship.
CHATTEL. Any kind of property except real estate. COLLATERAL. Pledges of stocks, notes, or chattels as security for the payment of a loan.
COMMERCE. The business of exchanging commodities between different places.
COMMISSION AGENT. One who does business on Commission. COMMON LAW. The unwritten law, the law of Custom. It receives its force from universal usage.
CONSIGNEE. The person to whom goods are sent to be sold on commission.
CONSIGNOR. The one who consigns his goods to an agent. CONTRA. Latin. On the opposite side.
COPARTNERSHIP. The joining of two or more persons into one firm for the purpose of carrying on any business. COUPON. An interest note or certificate, attached to a bond, which is cut off for collection when interest is due. CREDENTIALS. Testimonials of authority; proofs of good character, DEMURRAGE. Money forfeited for detaining a vessel beyond the time named in her Charter party.
DISHONOR, A failure to pay a note or other obligation when due. A failure to accept a draft when presented for acceptance. DOCKAGE. Charge for the use of a dock.
DOWER. The right of a widow to a one-third interest in all the real estate owned by her husband at any time after their marriage.
DRAFT. A written order for the payment of money at a fixed time. DRAWEE. The person on whom a draft is drawn. DURESS. Personal restraint of any kind.
EARNEST. Part of purchase money paid to bind a bargain. EFFECTS. Goods, or property, of every kind. EMBARGO. An order of the Government preventing ships from departing or landing.
EQUITY. The principles of right and justice. EQUITY OF REDEMPTION. The right allowed a mortgagor of a reasonable time to redeem mortgaged realty. EXECUTION. A writ authorizing an officer to carry into execution the judgment of the Court.
FEE SIMPLE. A title to real estate held without conditions by a person in his own right.
FORCED SALE. Sale made under compulsion. FORWARDER. One who attends to the shipping and reshipping of goods.
GROSS WEIGHT. Weight of goods, including case or wrapping. GUARANTEE. A surety for the performance of a contract. HONOR. To pay or accept a draft when due. IMPORT. Duty paid on goods by importer.
INDEMNIFY. To recompense for loss or injury. INDEMNITY. A guaranty against loss.
INDENTURE. A writing containing a contract. INDORSE. To write one’s name on the back of a note, draft, or other document.
INJUNCTION. A writ of Court, by which a party is restrained from doing a certain act.
INLAND BILL. A draft between parties in the same country.