Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-07-16
BANKING ON HONESTY
GOOD CHARACTER A TANGIBLE
ASSET IN BUSINESS.
From Worlds Work.

From Worlds Work
I'm Scotland, when a man has arrived
at years of discretion and has won n repu-
tation for capability, bank will, simply on
his note, backed only by his character. ad-
vance him sufficient money CASUALLY mod
crate sum- to start in business. This Is
considered-and the conclusion Is based on
results-to be a good risk. In our large
cities. New York and Chicago. for example,
business is not frequently conducted in
that way. but there Is no doubt that our
great western country owes much of its
wonderful growth to those far-sighted coun-
try bankers who realized that the Dor
rower's character was the chief asset to be
considered. Naturally. character plays
relatively larger part in the loanins opera
tons of small bank than in a large bank;
in a country bank than Wall street bank,
and in the beginning Of a business mans
career. Its relative Importance is mat
ter of environment.
I'm 1895 a New York firm of merchants
became heavily involved in enterprises that
We're sound. but in which the realization of
cash was slow. The head of the house in
formed the representatives of the banks
that they would be obliged to carry the
firm through its difficulties, or there would
be a failure, when the banks would be
heavy losers. The banks agreed that this
was so. and assumed. the burden. In the
ensuing investigation it appeared that the
head of the house, in securing loans. had
omitted certain facts that indicated a lack
of frankness, we will say. Six years later
that same man was elected president of a
newly formed industrial corporation or
trust 1t appeared in the money market as
a large borrower. There no reason
why the accommodat ton should not be
a hl nkar wa a
tracted by the signature of the president.
when he recalled the episode of 1898. The
hnal result was that the bankers informed
the directors of the corporation that they
could only have the credit desired when an
other president was elected. \ flaw In that
mans character cost him the presidency of
this particular corporation.
Value Of Reputation.
"a mining promoter,a man with a charm
ing personality, endeavored to float valu-
able mine several years ago in Wall street.
He failed to do so. Another man took up
the work where he left off and succeeded.
Asked why he failed. he said bitterly: Per
sOnaliy am honest Some years ago had
the misfortune. however, to be associated
with man who accumulated his money out
of a questionable trade. l was said to be
his adviser and confidential man. No one
would trust him. and now 1 find that every
one is reluctant to trust me. am mice
fellow, but"-and then l fall down. A
good reputation would have been worth
fortune to me the last few years.
One of the most successful Wall street
bank presidents was invited upon one oc-
casion to become a partner in private
banking firm. The opportunities for money
making were very great He thought it
over and was favorably disposed toward
the proposition. He consulted a friend.
But. said the friend. a man of your char
Acter could not get along with mentioning
a member of the firm). Why? He is tricky.
The banker rejected the offer Two years
later the firm in question dissolved, and the
tricky partner retired. but ne had impaired
the standing of the house. The same bank
err was offered so 900 to become a director
Of an industrial company that appeared to
be. and was. financially sound Your
duties said the lawyer making the offer.
VIII be only nominal We simply want
your name The banker concluded that he
could not afford to be associated with the
other men of the board. Surely the charac
ter of this man is a very tangible credit as
"A Swede walked up to the president of
a western bank and said: 'Ay tank Ay want
to borrow 5000. and Ay tank Ay get him
here Cross-examined. it was ascertained
that he had no money except few hundred
dollars. but he wanted to buy mill He
vas honest. hard-worllcr and a good
trader The banker liked him we'll that
he was willing to back his own Judgment.
and SO loaned the Swede the money he
needed. The borrower made good, ard be-
came one OF the most uSetul clliZenS OF that
community.
Aid for Good Men.
in a little southern health resort town
last winter | met a young merchant who
did a business of $4,000 a year a Dor
rowed capital of 5000. How did you do
it. and how do you get the credits? 1
turn my stock over ten times a year he
replied But the banks here know me.
and they know that | am a man of my
word, and they knew my father before me.
When | say that | will be at the bank
tomorrow at II O'Clock with $1,000 they
know that l will be there at 1":51. l am
part of this town. | was born here; my
wife and children are here and I expect to
die here. The man | bought this business
from was not as honest as he might be. l
worked for him. and at the same time /
protected the Two banks with which we did
business
Il made 4 few Inquiries. and the cOun-
try banker made this explanation: The man
who owns the business now worked for
another man. who owed us $500. The
present owner knew that the money was in
another bank, and promised us that 1t
would be delivered here at Il certain time.
The old owner drew out the money and
went off on a spree. The present owner.
rather than not make good his word. bor>
roWcd the money on his own note and paid
us off. Whe uthe business came the
market We helped him get it, and We are
glad to do business with him. We only
wish that we could get more like him.
There are ten thousand business men In
New York who tomorrow might lose every
penny they possessed and yet on the day
following they would start new careers,
full of courage and confidence, backed by
the seemingly intangible but very definite
assets-brains. health and. most important,
good character.