The record-union., 1898-03-13
SURETY INSURANCE.


The growth of suretyship business in
the United States, says the ''Finan-
cier," is remarkabl The companies
have become general only within the
last decade. Prior to that there were
a few in Europe, but they were not re-
ceived with much favor; now they are
plentiful in all leading countries.
When first proposed they We're, we
recall, bitterly opposed by the employ
es in trust, and labor organizations
took occasion to declaim against them
as being of the regalia of slavery. Ger
tainly at first view there was some ap-
parent warrant for the conclusion,
since the business placed it within the
power of any company to ruin the ca
reer of any man seeking clerical or
other positions Of trust. But the fact
that competition has regulated the
business is now patent, and the decla-
nation against this new method of Civ
ing bonds has declined until it is now
scarcely heard
Nevertheless We can understand how
these companies can become tyrannous
and unless strictly controlled may place
the employment of any man at their
mercy unless I1e-yields to their premium
exactions. That is the dangerous phase
of the business and it must be watched
and resisted jealousy
The 'Financier" thinks the field OF
their usefulness is practically unlimit-
ed, and that their acceptance by bust
ness means its transition from a lower
TO higher level. Certainly the day of
individual suretyship is passing; that
is evident to every one. That the new
system is a vast saving of time an0
trouble to business men cannot be fol-
a moment questioned; that it is exer-
cising q beneficial influence upon young
men IS not controvertible, either. They
now understand that their actions are
watched, that their habits are closely
observed, that estimates formed by
business men of them go into the rec
ords of these surety associations; that
reputation has become ascertainable
capital for every young man, and that
all business men in a community know
just what that reputation is
Our contemporary is convinced that
whereas now 80 per cent of all bonds
now filed in courts are of a private
character, within the next ten years
the figures will be reversed, and 90 per
cent will be filed by surety companies
There are now nine of ten of these or
CARNATIONS in this country, and every
one of them has reported a surplus
over losses paid. The total income up
to the close of 1896 was over 81, 900. 900,
and they paid in that year losses
amounting to 81 800 900, leaving them
a surplus over all losses and expenses
Of S3,360,000 and a reserve insurance
of more than 100000.
These companies bank upon the as
certainable ratio of defalcations and
unreliability to the whole number of
persons in positions Of trust or requir-
ing sureties, and upon the ascertain
able standing of men in their commu-
mites who seek positions Of trust. Out
| side of this they bank upon the ordi-
nary risks taken by bankers. and in
sure against them. II has been found
that there is as much safety in fur
nishing bonds by insurance as in in
surfing against the probability of fire
or of marine loss, and the facts are
found TO have so steady and stable a
flow year by year that insurance of
this order has come greatly into vogue.
and probably will be much extended.
The forecast of the .Finar.cier" quot
ed above emphasizes the fear we have
already expressed and gives force TO
the thought that these money organiza-
| tons, formed TO make money for their
investors, must be held to strict account
ability and open book and open door
methods of business. They must not
foster a system of blackmail, or become
Eautocratic Inc stimating mems characters
or in limiting their opportunities. There
| is great good and great danger in these
companies. We may conserve the one,
but must not sleep as to the other.