The daily morning journal and courier., 1905-07-14
BANKING ON HONESTY.
Good Character a Tangible Asset in
 Business.

only by his character, advance him | sufficient money usually a moderate l sum) to start in business" says B. A, | Nelson, in "The Worlds Work. This 1 is considered-and the conclusion is l based on results-to be a good risk. In l our large cities, New-YOrk and Chi | cago, for example, business is not 50 frequently conducted in that way, but i there is no doubt that our great Vest | ern country owes much of its wonder ful growth to those farsighted country bankers who realized that the borrow CTS character was the chief asset to be considered. Naturally character plays a relatively larger part in the loan- ing operations of a small bank than in a large bank, in a eoun- try bank than in a Wall street bank, and in the beginning of q business mans career. Its relative in- portance is a matter of environment.
 Tn 1895 New-York firm of mer- chants became heavily involved in en- terprises that were sound, but in
 which the realization of each was slow.
 The head of the house informed the representatives of the banks that they
 would be obliged to. ''carry the firm" through it's difficulties, or there would be failure, when the banks would
 be heavy losers. The banks agreed that this was so, and assumed the burden.
 In the ensuing investigation it ap- peared that the head of the house, in securing loans, had omitted certain facts that indicated a lack of frank
 ness, We will say. Six years later that same man was elected president or q newly formed industrial corporation or trust. It appeared in the money market as a large borrower. There was no reason why the accommodation
 should not be granted, until a partleu-
 lar banker was attracted by the sigma
 ture of the president, when he recalled
 the episode of 1895. The final result was that the bankers informed the di- rectors of the corporation that they could only have the credit when an7
 other president was elected. A flaw in that mans character cost him the Ipresidency of this particular corpora | tion. &.{ E>
 "A mining promoter, a man with
 charming personality, endeavered to float valuable mine several years ago | in Wall Street. He failed to do so. An other man took up the work where he | left off and succeeded. Asked why he
 failed, he said bitterly: Personally
 am honest. Some years ago had the the misfortune, however, to be associ-
 ated with a man who accumulated his
 money out of questionable trade.
 was said to be his adviser and eonh-
 dentiaI man. No one would trust him,
 and now find. d.fthat every one is re-
 luctant to trust me. am Ia nice fel- | low, but and then fall down. A
 good reputation would have been worth
 a fortune to me the last few years.
 One of the most successful Wall
 Street bank presidents was invited up-
 on one occasion to become a partner in
 a private banking firm. The opportun- | ities for money making were very great.
 He thought It over, and was favor-
 ably disposed coward the proposition. I He consulted q friend. But said the lfriend, a, man of your character could lnot get along, with (mentioningl a member of the firml. Why? He is | tricky'' The banker rejected the offer, Two years later the firm in question dissolved, and the tricky partner re-
 tired, but he had impaired the stand ling of the house. The same banker Twas offered $25,9OO to become a. direc-
 tor of an industrial company that ap- Ipeared to be and was, financially sound
 Your duties said the lawyer rnak- ling the offer, win be only nominal. We Csimply want your name.' The banker lconcluded that he could not afford to
 be associated with the other men of
 the board. Surely the character of this
 man is a very tangible credit asset.
 "A Swede walked up to the presi- dent of a Western bank and said: tAy
 tank Ay want to borrow S5,000, and Ay tank Ay get him here Cross-exanlin- led, it was ascertained that he had no
 money except d few hundred dollars, but he wanted to buy mill. He was
 honest, hard worker, and and a good
 trader. The banker liked him so we'll
 that he was willing to back his own
 judgment, and so loaned the swede
 the money he needed. The borrower made good and became one of the, most Iusefu1 citizens of that community.
 ] Tn a little Southern health resort
 town last winter I met a. young n1er-
 chant who did a business of $S5,000 a
 year on borrowed, capital 5000. How
 do you do it, and how do you get the lcredit?' I turn my stock over ten
 times year he replied But the banks here know me, and they know that I am a man of my word, and they know my father before me. When I say I will be at the bank tomorrow at Il | o'clock with $1,OOO, they know that
 will be there at 10:55. I am part of this
 town. was born here; my wife and children are here and I expect to die here. The man I bought this business from was not as honest as he might be. I worked for him, and at the same time I protected the two banks with which we did business
 T made a few inquiries, and the country banker made this explanation: "The man who owns the business now
 worked for another man, who owed us $2, 1000. The present owner knew that the money was in another bank, and pro- ? missed us that it would be delivered
 here at a certain time. The old owner ldrew out the money and went off on a spree. The present owner, rather than a not make good his word, borrowed the