Dealers in Human Honesty
MICHAEL WILLIAMS IN MOODY’S MAGAZINE
How the surety bond companies carry on their business.
IN these troubled times, which future historians may term the “Muck Rake Era,” it is enheartening, and restful to find a great branch of corporate business which not only does not lie in the shadow of any suspicion of ambiguous operations but which is based solidly and confidently on the proposition that honesty is a gold mine—the veritable Klondike of human nature. This business is that of the Surety Bond Companies.
“May it not correctly be said that yours is a business founded on the truth underlying the old proverb, ‘Honesty is the best policy,’ and that the millions of dollars invested in it are risked on the assumption that most men are honest men?” was the question asked the president of one of the greatest of the surety bond companies. -
He replied: “Do not say that we ‘risk’ our capital. There is no risk. Change the word ‘assumption’ to the word ‘knowledge.’ We know that most men are honest. We have proved that idea. We are simply merchants. We buy honesty, and sell it —at a profit ; and we consider that our traffic does not impair the original value of our merchandise but rather preserves its value, increases it, indeed. See now ! We bond any man who handles money, guaranteeing the owners of the money against loss through the possible dishonesty of its handler. We charge from 1-4 to i per cent, to 1-2 of 1 per cent, of the amount of the bond. Think of the odds against us! No gambler in his senses would take such odds. And we are not gamblers, but business men, operating a sure thing. We absolutely know that we are on the safe side ; we know that 999 men out of 1,000 are honest. Of course, not all the surety bond companies succeed, not all can make profits. This, however, is because they are not properly managed. The business itself is built on bed-rock—on unalterable human honesty.”
And yet, as the headlines of the newspapers show, dishonesty is rampant—or seems to be so. Every day men run away with or divert to their own uses, the money of others. The Hippies and Stenslands., the defaulting cashiers, the thousands of lesser runaways whose pockets bulge with loot—to say nothing about the undetected thieves—are always with us. Very well. But don’t let us forget that ours is a biggish country. Let us remember that there are millions of men and women in places of trust who do not steal. The honest, stable folks supply no sensational stories. We do not photograph, interview and celebrate the humdrum, steady, honest people. It is that one defaulter out of a thousand honest money handlers of whom we hear. The bondsman, or the bond company, pays the penalty for guaranteeing the one-out-of-a-thousand defaulter. Then the surety bond company pays out some more money on his account— getting him into jail. Meanwhile it derives sure profits and ample dividends from the rock-ribbed honesty of the 999.
Not blindly do they put their trust in men—and back it with their dollars. The officials of these companies are specialists in the analysis and judging of human nature. They are practical psychologists. As a tea taster cutlivates his taste for the various qualities of the herb, or a buyer for a silk house develops his knowledge of that fabric, so also do they learn to probe the springs of human actions, to catalogue the table of temptations, and value the shifting, elusive, complex elements of human probity or falseness.
To make an application to one of the companies for a bond is to foretaste judgment. You must throw open your book life and let all its pages be scanned. Not only you, but your relatives, enemies, friends, employers past and present—all who have knowledge of you—must answer questions cunningly calculated to yield information concerning your past life and the character resultant from that life. You are, in a word, caught up by a complex and elaborate machine—built up after years of experimenting—and are not released until every shred of information possible to be extracted from you has been garnered.
So essentially important is it to the surety bond companies that they should possess reliable data on all that concerns modern human character, so that they may wisely frame their questions to applicants, and judge the applicants, that there is now a movement among them to hold a joint conference on the subject. They wish to exchange their experiences, debate their various theories, and, in short, go as far as they can toward the formation of a definite set of rules for their guidance in the misty and complex maze—the region of human nature—in which they adventure their fortunes as the merchants of old times risked their agrosies in unknown seas.
There is already in existence an institution which might be termed a clearing house of human character— a company in Philadelphia which the surety companies support, and to which they send reports of their experiences and methods, these reports being exchanged among the companies. What the companies seek is nothing short of absolute standards of honesty. The confess that they are still far distant from that ideal.
Turning to the actual conditions to-day, let us look at the workings of these complex organizations. How, actually, do they now judge their applicants for bonds? Who are the honest men, according to these practised judges of honesty? Are married men, for instance, as a class more honest than single men?—city dwellers than countrymen?—college men than the less formally educated ?— native-born than foreign citizen? The list might be indefinitely extended, but the consideration of these questions will throw light on the subject; and to some of them definite answers can be furnished.
And to many others definite answers cannot be given. The accurate judging of the qualities and circumstances which complicate the question of a man’s actual or potential honesty is a big, hard job—and none are readier to admit this fact than the surety company officials themselves. So many complex considerations affect the problem! You can’t dissect a man’s soul as you may his body. You can’t count and name his impulses, emotions, temptations as you may his nerves and his muscles.
Here, however, are some of the general conclusions which the surety company people have arrived at.
Broadly speaking, married men are better risks than single men. He is more settled. Pie has a greater sense of responsibility. He is more stable. And yet, too, there are many disadvantages. You may have too many children to support, having regard to the amount of your salary. Your wife may be evtravagant. Or you may have invalids among your family, the care of whom increases your expenses. Thus the very duties which call upon the manhood of those on whom they devolve, may, by becoming too onerous, break down the barriers of their honesty.
You are a college man? Or you are not? Well, it makes little difference, speaking broadly, with the surety people, so far as your honesty is concerned. But you were an athlete at college? A point in your favor. Your physical condition, your stamina, is apt to be good, which decidedly “helps some” in the preservation of your moral strength.
Government employes — federal, state, county or city officials, are not as safe risks as the employes of private concerns or individuals. The trouble is that so many public officers are place-hunters, spoilsmen, politicians seeking to feather their own nests rather than to be faithful to their obligations.
You are a foreign-born citizen? The fact in itself is not against you. But if your family and friends are living aboad; if you have struck no roots into this soil by marriage, or by having your family here, then it may be that some day the affliction of that very real ill, nostalgia, homesickness, may come to you, and drive you back to your own land—with somebody else’s money.
Countryman or city man—all’s one to the surety people, provided that in either case your environment, your friends, family, your standing in your little world, are good. Suppose, however, that you live near a race track, where the bacillus of temptation to bet is in the air—or in a poolroom neighborhood—then the surety people consider that fact in your disfavor.
I suppose that you have heard (what is quite true), that there are newspaper reporters who develop what is termed the “sense, or nose, for news” until it reaches a degree almost incredible—a veritable sixth sense, an instinct ; they become able to “smell news” from afar, as an experienced Arctic sailor can smell distant ice. Well, some of the surety bond officials develop their keenness of judgment of character until it is akin to the newspaperman’s “news sense” —until it reaches a pitch almost uncanny. They read faces as no professional physiognomist ever docs. They trace character in handwriting. They become unconscious mind-readers— their gift is intuition rather than reason. Here is one instance of the application of such an instinct :
“It was when I was with a company in the Middle West, as claims agent,” said the official of a big New York company. “I was sent to a country town to investigate a claim made on us by a bank from which a young clerk had absconded, several, thousand dollars short in his accounts. Our inspectors, as we call our detectives, were placed on his trail and he was arrested, put into jail, and confessed.
“Now, it is a fact that I myself possess much of that strange faculty we have been discussing, and, do you know, as I entered the bank and shook hands with the president, whom I had never met before, through my mind there ran vividly the thought, that something was wrong with the president himself. I cannot say why it should have been so ; but so it was ; distinct as an electric shock. At once, however, it faded. The president was pleasant and agreeable ; a man of high standing in the business world ; to all appearance just what he was supposed to be ; and I went on with my work, dismissing that queer impression from the surface of my mind. It abided, however, in the depths.
“My investigations showed that the younk clerk—he was a mere boy—had yielded to a sudden temptation. He had been lured into gambling at a poolroom ; lost his bets ; had stolen to make good the first debt he had contracted ; and then stolen to cover up the theft. Then, seeing no issue out of his dilemma but flight, he had taken several thousand dollars in cash and fled, leaving his accounts in a badly muddled condition. So many of our stories may be told in about the same terms.
“His mother came to see me, to beg me to be lenient with her boy, and it was most painful to have to tell the pathetic widow that I had nothing to do with the boy’s prosecution and could not interfere in the matter, as it rested now, with the bank officials to prosecute. She cried, then, breaking down completely and pitiably, saying between her sobs : ‘Then Billy must go to prison. The president is determined to put him there.’ I became interested in the sad case. Believing as I do, that you ruin a young man, in the majority of cases, by putting him into prison—that his life is blasted—that you simply confirm him in crime, I determined in this case to do what I could to help the lad and his mother. I was convinced that the boy might turn out a decent man if given another chance. So I went to the president and laid my views before him and begged him to give the boy a chance.
“He banged his fist down on his desk vehemently, crying: ‘No sir; no man can steal from this bank and escape the consequences : That kid goes to jail—he deserves it, too!’”
Here the claims agent paused and looked at me strangely.
Said he : “And—at that very moment—that— —” (let us charitably slur over what the claims agent here said) “that blanked scoundrel was himself an embezzler to the tune of ten thousand or more. Think of it !
“It will remain as a blessed memory to me that I was able to get the best of that infernal hypocrite. The strange impression I had received when I shook hands with him at our first meeting recurred strongly to my mind, and stayed with me, haunted me like an obsession which I could not shake off—and to-day I know, by experience, better than to try to get rid of such feelings without probing for their causes. It stirred me into a little investigation beyond the immediate field of my work ; and I looked into the president’s affairs—and it ended in my discovering, with documentary evidence to prove my discovery, that the president was an embezzler—worse—that notes which
he had himself collected had been charged to the boy’s account, after the boy had absconded, thus heaping on the lad’s already burdened shoulders the crimes of his superior.
I shall never forget the scene when I walked into the president’s office and bluntly told him what I knew, and what I wanted him to do. I have been in other dangerous situations in my life, but I think that never have I stood so near to a violent death as then. He jumped up, fumbling at a drawer in which I knew he kept a revolver, and the will to kill me was fairly flaming from his eyes. I got busy.
“ ‘Stop right where you are,’ I said. ‘I’ve got you covered and will shoot you through my pocket if you stir a hand.’ This was a bluff, for I had no gun. But the bluff was not called. His wrath cooled—or, anyway, he mastered it ; and I brought him to arms. He signed an agreement not to prosecute the boy, and signed a release on my company for the larger amount of the boy’s bond, 4we simply making good the lad’s actual shortage, which did not amount to nearly what the president had claimed; and he also made good his own shortage. The documents in the case are in existence to-day, tucked safely away in a vault. The boy is doing well, and the president seems to be walking circumspectly in the dangerous paths of frenzied finance. But we do not bond his clerks.”
While, as we have seen, the surety companies emphatically declare that most of their clients are honest, they neglect no precaution that «their great experience suggests to keep the clients honest, and never forego the punishment of those who go wrong, except in such exceptional case as the one just related. Powerfully do they impress upon the money handlers that no coins must stick to their fingers by the relentless manner in which the defaulters are hunted down. The companies will grimly spend an amount far in excess of the bond they have to make good, in order to bring the defaulter to the bar of justice. The president of one company showed me the documents in a case just then finished. A ticket seller in the employment of the railroad had absconded. The company had to pay a bond of one thousand dollars. The company’s detective—or inspector— had run down the man, and the cost of the job was just v$4,200.
All the surety companies maintain large staffs of expert man-hunters. Among them are many remarkable detectives. As an instance of intuitive genius on the part of one of these detectives—worthy of the best feats of Sherlock Holmes—let me relate the story of the claims agent for a western surety company and a Chicago meat market cashier with a taste for literature.
This claims agent is a remarkable man even for his remarkable business. He has been for years in the detective branch but was too good an executive, too good as a business man, to be kept in that department, important as it is, and so he was placed in the claims department. He possesses a natural genius for detective work, which he
utilizes in his present work on many occasions.
In the case in point he had been sent to Chicago to investigate the books of the meat market cashier, who had absconded. While he was at work in the defaulter’s office, the detective of the company entered. The detective was at the end of his rope ; and morosely confessed his inability to get a clue to the runaway’s whereabouts. Three days had elapsed since the cashier had disappeared. He was as a man who did not exist. The detective had once before looked through the defaulter’s desk, and was now bent on making another investigation, with the vague hope that “something might turn up” to help him—a Micawberish hope which showed how helpless he felt. The claims agent suspended his own work to help the detective. They again went through the papers in the defaulter’s desk. There were old love letters ; there were bills, memoranda; much to show why and how the cashier had stolen, but nothing that the detective considered would be a clue to where he had fled. Then the claims agent picked up a slip of yellow cardboard issued by a free library. It contained the defaulter’s name and old address, and a number of dates stamped in columns marked despectively “Books Issued,” and “Books Returned.” The claims agent examined it, and then tossed it to the detective.
“Here is your clue, I think, Tom.”
“Fine !” cried the detective, eagerly grasping the library card. Then his face grew overcast, he scanned the card back and front, went over it with a misroscope, and then glared sourly at the claims agent.
He said: “It’s a poor joke, Mr. Mac.”
Said the claims agent: “It is no joke. Doesn't it seem queer to you that this fellow should have joined the library and read so many books during the time when he was up to his eyes in troubles here. Compare the dates—you see, it has been during the past month or two that he has been reading so much. Go to the library and find out what he has been 4reading. You may gain a light on his character. Some indication of what such a man might do in his situation may crop out.”
The detective growled : “Oh cut it out, Mr. Mac. He’s, been reading love yarns, I guess. Anyway, I’m no Sherlock Homles. These tricks are too fanciful for yours truly.”
The claims agent said: “All right; give me the card and I’ll try my luck.” “Oh, I’ll go with you,” said the detective. “It’s a blanked long shot, though.”
“They win, sometimes,’’ said the claims agent.
Then the two men went to the library. The claims agent interested the librarian in his idea. A list of the books issued to the defaulter was given him. The first book on the list was Prescott’s History of Peru. The second was the history of the South and Central America republics. The third was on rubber planting in the Isthmus of Panama. In short, of a score of books, all dealt with South or Central America.
“Well,” said the detective, gaping at the claims agent, “Well—well! The long shot certainly looks good to me, now !
Said the claims agent: “Sure--it's plain as the nose on your face. Tom. Our man is going South. He’s been reading up on the business doing down there. Let's get busy.”
They hurried to the office of the Pinkertons. Telegrams containing a description of the defaulter were rushed through to El Paso, Eagle Pass, Laredo, San Antonio and other points near or on the Mexican border, and also to New Orleans and Galveston.
By noon of the next day a telegram came from the Pinkerton agent at New Orleans, reading, in substance, as follows :
“Caught your man in office of Morgan Steamship Company buying ticket for Mexico.”
An instance in which a man’s handwriting proved the agency whereby a surety company tracked him down, after he became a defaulter, was told by the same claims agent. The defaulter was a ticket seller in New
York, at the time when he ran away and disappeared with several thousand dollars. The detectives failed to locate him, and then the claims agent took up the job. The records, of the man’s previous life were closely studied. At one item the claims agent paused, considered, and then acted. The item was to the effect that the absconder had formerly been employed, not once, but several times, with different traveling shows, and with a circus, as a ticket seller. The claims agent thought that the man might again try to get a position in a similar capacity. So he inserted an advertisement in the New York Clipper—a widely circulated theatrical and show periodical—purporting to be from the business manager of a circus, asking for the services of an experienced ticket seller, who also could make himself useful in other directions. Within a week a large number of applications had been received. Then the claims agent spread a sample of the defaulter’s hand-writing before him and compared it with the hand-writing in the letters of application for the circus job. The fifth letter he opened was in the defaulter’s hand-writing— above another name, of course, but giving his address. A detective was hurried right along and the next day the defaulter was under arrest.
And sometimes the chase for defaulters will go on for years, but it is seldom thát the surety company is defeated. The defaulter may grow careless, or trust that time has buried the memory of his crime—but the surety company never forgets, never gives over the hunt. If at the end of a year, say, a defaulter has not been captured, and the chase is seemingly at an end, the papers in the case are filed away, makred to be brought forward again at the end of three or six months. The hunt begins again. If it again fails, it is again put by for another period, and then resumed. But it is never abandoned. And the detectives develop a most remarkable memory for faces. They study the actual features of defaulters—if the opportunity comes—or photographs (and in one wav or another most of the companies see to it that they are in possession of photographs of their clients), and engrave them upon their minds indelibly. A curious instance of this faculty came to my knowledge only a few weeks ago.
More than six years ago a ticket seller at a remote countiy station on a New England railroad absconded. There was not much money involved, but as usual the surety company set out to capture him. The attempt was fruitless. The detective on the case failed completely to locate his man, whether through the - defaulter's cleverness, or through his luck. The detective had never seen the absconder but had once seen a photograph of him. Every six months or so the case was brought up for consideration, but nothing resulted, and the years went by.
Then one day on Broadway „in New York, at the corner of Liberty Street, a gunshot from the office of the surety company, the detective, while on his way to the office, saw a man standing with his head turned back gaping at the skyscrapers—a countryman whom the cows were still missing, by every indication. Something in the man s aspect brought the detective to a standstill—as a bird-dog stiffens to attention when scenting a quail. He seemed to discern in the rustic’s face a resemblance to the photograph of the defaulter for whom he had been looking for six years. Three times he walked completely around the absorbed countryman, each time narrowing the circle, uncertain, and yet strongly impressed by the idea that this might be his quarry. Then he decided upon a bold plan—to take the man by surprise.
Walking briskly up to the countryman, he clapped both his hands on his shoulders, crying:
“Why, Tom Jones! How are you! Tom, why did you steal that money at Mountain Meadow ?”
Quickly came back the answer, flashed out of the man by the shock of the surprise : “I was up against it hard, and I just had to!”
“All right, Tom,” said the satisfied
detective, “and now come along with me !”
“Who are you?” gasped the man.
“Tm from the American Surety Bond Company—come up and see the president.”
And the defaulter meekly followed.
The whole continent of North America is covered with a network of the surety companies, and their agents and detectives, although even yet the bulk of the bonding business is done by individuals. The companies are rapidly absorbing it, however, as they are safer than individual bondsmen, and business naturally seeks to be protected. The work of the companies has also done good in other directions than in better insuring the honesty of money handlers.
By refusing to bond men for large concerns where the companies considered that the wages paid did not give the money handlers sufficient to live without pressing temptations to steal, the surety companies have very often forced up the wages of thousands of men. They have also bettered methods of book-keeping and of safe-guarding funds, by their recommendations to business houses, and to state and city officials. Interesting, however, as are all the details of this business of trading in honesty, the scores of true stories of human interest—the tales of adventures in which the detectives pit their wits against defaulters—the tales of men and women involved in defalcations—form the most fascinating parts of this peculiar business.
Are You Needed?
Have you made yourself important ? Are you needed in your place ?
You complain that >011 are slighted ; gloom has settled on your face ;
Younger men are passing onward to rewards you cannot claim.
And you cry that luck betrays you, but is luck alone to blame ?
Others blessed with little talent have been pushed ahead,
you say ;
But their services are needed and they give the best they may ;
Would the world care if to-morrow you sat on some distant star ?
Have you made yourself important—are you needed where