Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-10-11
THE BUSINESS OF GETTING
AHEAD
Should You Indorse Notes for Others?

Should You lndOrse Notes for Others?
The role of being good fellow is
costly and. if pursued without the ut
most discrimination, Is likely to lead
to financial ruin.
Every well-to-do individual Is occa-
sionally imposed upon by less afflu-
ent acquaintance who In one form or
another asks for a lift. The most i'll
sldtouS form of borrowing is the re-
quest that one man indOrse the
promisSory note of another. 1t Is In
SldlouS because the seeker of the favor
frequently attempts to disguise the
real significance of the operation, say
ing you put up no money, or suffer no
Inconvenience, but merely sign your
name on the back of the note.
If a census were made of the men
who were turned into suckers by their
inconsiderate friends it would probably
reveal that more harm has been done
through indiscriminate Endorsements
than through lending cash which was
never returned.
Indorsing note is accepting a con-
tingent liability which means that, If
the borrower fails to repay the money
borrowed on the day due, the iDdorser
must make good. Broadly speaking,
no one should indorse q note for
large amount without getting the seek
er of the accommodation to take out
life insurance policy in favor of the
ndorser for the term of the note.
Even the best intentioned and most
honorable men are frequently pre-
vented from carrying out their
promises by premature death.
Rather Lend Cash.
Apart from your regular activities
as a business man or banker, never
indorse notes for others unless there
is an overwhelming human situation
which justities you in departing from
sound policy. Rather lend cash to a
needy friend than lend credit through
an Endorsement. for the recipient of
cash knows what he Is getting where
as the beneficiary of your indorse-
ment is likely to assume you are
merely writing your name for him.
Regard your Endorsement as virtual
ly the same as q loan of cash.
Remember that there is something
the matter with the credit of the man
who has to lean on his friends, for in
our present financial structure there
are regularly organized banking
agencies which will take care of the
great miscellany OF financial neeuS OIL
the man who is a good risk. Knowing
this, you will nevertheless sometimes
find human reasons why you should
depart from stern and sound financial
practice. but in doing SO bear clearly
in mind that you have entered the
field of philanthropy and left the
realm of business.
Many individuals think loosely and
vaguely about financial matters. and
hinder their own success and the well
fare of their dependents by accommo-
dating strangers who are merely bent
on exploiting their good nature
Abuses in this direction have be-
come so common that business men.
in forming partnership, fire.
quently exact promises from their as
sociates that they will under no cir
cumstanceS indorse notes for any
purposes outside of the activities of
the business itself.
When you help out the sick or the
needy, charge the expense to charity;
don't regard the loan as one Of
your realiZabe assets. Perhaps YOU
will be surprised to find such loans
repaid, but. if you keep your person
al record in the way suggested, you
will not be foOling yourself.