At the end of our last article we were speaking of the Post Office as
a banking establishment, and we did not finish all there was to say on
the subject.
Being both bankers and letter-carriers, the postal authorities offer
unusual facilities to the public for sending money to different
places, either in the United Kingdom, or in the colonies, or in
foreign countries. This department of their business is divided into
two branches—that dealing with _Money Orders_, which are an old
institution, and that occupied with _Postal Orders_, which only came
into use in 1880.
Money orders were first started in 1792 by three Post Office clerks,
with the idea that they would be of service for sending small sums
safely to soldiers and sailors. The business gradually extended, and in
1838 was taken over by the Government.
The charge for remitting was at first eightpence in the pound; but it
has been reduced from time to time, the last reduction being made only
a few months ago. It now stands as follows:—To remit to any place in
the United Kingdom any sum not exceeding a pound costs 2d.; from one
pound and not exceeding two pounds costs 3d.; from two pounds and not
exceeding four pounds costs 4d.; from four pounds and not exceeding
seven pounds costs 5d.; and from seven pounds to ten pounds you have to
pay 6d. No single order is issued for more than ten pounds; but if you
have to remit, say, thirty pounds, it is an easy matter to get three
orders.
To get a money order, the first thing you have to do is to fill up an
“application form,” to be had gratuitously at all money order offices.
All post offices, by the way, are not money order offices. Here is a
form filled up:—
MONEY ORDER REQUIRED
For £9 2s. 3d.
Payable at _Pepperness_.
To _Miss Flora Sprat_.
Sent by _Esmeralda B. G. Constable._
Residing at _Grumblethorpe_.
The amount of the order required, along with the commission—the total
in this case would be £9 2s. 9d.—is handed over with the form to the
postmaster, or whoever is acting for him. No order may contain a
fractional part of a penny. To make an order more secure, it may be
“crossed,” just as we mentioned could be done with cheques. In that
case it is payable only through a bank.
When a money order is to be paid in London, or in any other town where
there are more money order offices than one, the sender should say at
what particular office she wishes it to be paid. Should she not do so,
and only say, “Payable at London,” or “Manchester,” or “Edinburgh,” the
receiver of the order will get payment at the head office in the town
only.
As a precaution against dishonest people, it is recommended that when
the sender of the order is well known to the receiver, the letter
enclosing it should be signed with initials only. When she is not well
known, safety may be given to the order by making it payable ten days
after date, or by having it crossed like a cheque, or by registering
the letter containing it; or the name of the sender may be sent in a
separate letter from that containing the money order. If ever you make
a money order payable ten days after date, you must on obtaining it
affix to it, in the presence of the postmaster, a penny adhesive stamp,
and write your signature across the stamp.
When an order is presented for payment, the person presenting it
is asked “Who sent this order?” and if this question is correctly
answered, and the order is properly receipted, the sum is at once
handed over, “unless the postmaster have good reason for believing that
the applicant is neither the rightful claimant, nor deputed by him or
her.”
Money orders are not only to be obtained for places in the United
Kingdom. They are also issued on France, Belgium, Switzerland, Germany,
Italy, Holland, Denmark, Norway, Sweden, the United States, and
several other foreign countries, and on most of the British colonies
and foreign possessions. The rates of commission charged for these
foreign money orders are—For sums not exceeding two pounds, 6d.; from
two pounds to five pounds, 1s.; from five pounds to seven pounds, 1s.
6d.; and from seven pounds to ten pounds, the highest limit of a single
order—2s. The regulations affecting foreign money orders may be seen
in the useful Postal Guide, which is published, as we mentioned in our
first article, once every quarter.
There has been a considerable falling-off of recent years in the number
of inland money orders issued, colonial and foreign orders having,
however, on the other hand, increased in number. The decrease has been
brought about by the introduction of postal orders, as they are called,
which have been found much more convenient in some respects, not to
speak of their being, for small sums, decidedly cheaper.
These postal orders, payable on presentation without previous notice,
are issued for fixed sums from a shilling up to a pound, and are to be
obtained at all money order offices in the United Kingdom, as well as
at Malta, Gibraltar, and Constantinople. Here are the amounts for which
they are issued, together with the “poundage” payable on each order:
There are orders for 1s. and 1s. 6d., on which the charge is ½d.; then
there are orders for 2s., 2s. 6d., 3s., 3s. 6d., 4s., 4s. 6d., 5s., 7s.
6d., 10s., and 10s. 6d., which cost 1d. each; and, last of all, there
are orders for 15s. and 20s., on which one has to pay 1½d. A postal
order is in the following form:—
To the Postmaster in charge of the Money
Order Office at.....................
Pay to........................., at any time within Three
Calendar Months from the last day of the month of issue,
the sum of Ten Shillings, on account of Her Majesty’s
Postmaster-General.
When one has to remit broken amounts, say 4s. 2½d., or 8s. 3d., or 10s.
9½d., postage stamps may be affixed to the face of the orders; but the
stamps used in this way on any one order must not exceed fivepence in
value.
Every postal order issued has this regulation printed on it:—“The
person to whom this order is issued must, before parting with it, fill
in the name of the person to whom the amount is to be paid, and may
fill in the name of the money order office at which the amount is to
be paid.” The word _must_ is underlined in the Postal Guide; but the
public having discovered that postal orders are a very convenient form
of small currency, have never taken the regulation seriously. In fact,
postal orders are coming more and more to be passed from hand to hand
like coin, the blank spaces in the order being only filled in when it
comes to the last holder.
When circulating in this way, however, postal orders have an
inconvenience: they must be cashed within three calendar months from
the last day of the month when they were issued, otherwise a sum equal
in amount to the original “poundage” is charged for every additional
three months that passes before the order is presented for payment.
Suppose a postal order kept on circulating, it would fall in value
every three months. A shilling postal order at the end of a year would
only be worth 10½d.; at the end of two years its value would be 8½d.;
and suppose it remained uncashed for six years, all you would get for
it would be ½d.
Before a postal order is paid, the blank spaces must be filled in,
and the receiver of the money must sign her name at the foot. Should
a postal order be “crossed” like a cheque, payment will only be made
through a banker.
Leaving money and postal orders—which we have spoken about fully
because they are such everyday documents—we come now to speak of
_Insurance_. And this is a subject about which all prudent people
should know something.
The object for which insurance exists is to guard against certain
accidents to which we are all liable, such as the destruction of
property by fire, or the loss of future earnings by disablement or
death. An agreement is entered into by which one party, known as the
_insurer_ or _assurer_, agrees to pay to another, called the _insured_
or _assured_, a certain sum in the event of the particular event
insured against happening.
The document which states the conditions of this agreement is called
the _policy_, and the payment made on account of the insurance is known
as the _premium_.
Insurance of houses and goods against fire began in London in 1667, the
year after the Great Fire, in which the citizens had so terrible an
experience of the character of the all-devouring element. The business
has now attained gigantic proportions, the insurance companies of our
own day being as a rule very wealthy and profitable concerns.
The rates charged for insurance are calculated at so much per cent.—or
so much for every hundred pounds—of the sum insured. They vary in
amount according to the nature of the risk. If there is little danger
under ordinary circumstances—as in a dwelling-house—of the property
being destroyed by fire, the sum to be paid is low; if, on the other
hand, the danger is considerable—as in a sugar refinery—the charge is
high.
Risks may be divided into three classes—common, hazardous, and doubly
hazardous. Common insurances are charged 1s. 6d. to 2s. per cent. per
annum, with certain exceptions; hazardous insurances are charged 2s.
6d. to 3s. 6d. per cent. per annum, with certain exceptions; and doubly
hazardous insurances are charged 4s. 6d. to 5s. per cent. per annum,
with certain exceptions; and in the case of the exceptions the rate may
run to 10s., 15s., or even more per cent.
In describing the property to be insured, you must be careful to tell
the whole truth about it, so that the company may know what risk they
are running in insuring it. Suppose, too, after the insurance has
been effected the risk should become greater—say by the erection of a
stove—you must not fail to keep yourself safe by communicating with the
company. There are some kinds of property, such as ready money, books
of accounts (their value as documents), bank-notes, stamps, bills,
bonds, and other written securities, which insurance companies will not
undertake to insure on any terms.
Insurance premiums are usually paid once a year at one or other of
the four quarter-days. Fifteen _days of grace_ are allowed after the
expiry of annual policies, and if the premium is not paid before the
end of these fifteen days, the insurance company holds itself free from
all risk. All policies, however, are not annual ones. You may insure
for any length of time. No days of grace are allowed on “short-time
policies”—that is, on policies for less than twelve months.
If one has any property to speak of, it is always well to insure, for
accidents will happen. Perhaps, after paying for many years without a
disaster, one may be inclined to lament having insured at all, and wish
that all the money paid in premiums were in her own pocket; but this is
not the right way of looking at it. The money sunk in premiums is well
spent in buying ease of mind. A person insured can sleep in comfort,
knowing that if fire should overtake her property she will recover full
value; whilst one uninsured may pass many sleepless hours thinking, If
I am burned out, what will become of me?
_Life Insurance_ is quite as useful an institution as insurance against
fire; indeed, it has been called “one of the greatest blessings of
modern times.” In it, by means of an annual payment, varying according
to the age of the person whose life is insured, a sum is secured in
the event of death. A girl may not have any necessity for benefiting
survivors in this way, but she should know something about the matter
for all that.
In insuring one’s life the applicant is required to furnish information
as to her own health and habits of life, and some particulars as to her
family history. If the application should be rejected on the ground
of ill-health or a tendency to hereditary disease, you must just try
elsewhere: offices are to be found that will insure unsound lives, the
charge being, of course, proportioned to the risk.
The cost of life insurance is based on the expectation of life at
different ages. The expectation of life, for example, of a girl of ten
years of age is about 48 years; at fifteen about 44 years; at twenty
about 40 years, and so on, decreasing year by year, till at last it
dwindles down to nothing at all.
A period of grace, most commonly thirty days, is allowed after each
life premium falls due. If it is not paid within that time, the
conclusion is come to that the policy-holder intends to drop the
contract.
It is a matter of great importance to be insured in a good office,
and the most careful inquiry should be made on the subject before
taking out a policy. “Safety,” says one writer, “ought to be the first
consideration, and economy the second; but really, economy ought to be
put first, for there is no economy in insuring in an unsound office,
however low its premium may be.”
Life insurances on a small scale can be effected better, perhaps,
through the Post Office than through any other channel. The
Postmaster-General is authorised by an Act of Parliament to insure the
lives of persons of either sex. The lives of children under eight years
of age cannot be insured; from eight to fourteen they can be insured
for not more than £5; and from fourteen to sixty-five they can be
insured for any amount not less than £5 or more than £100. The security
for the payment of the money at the proper time is the best in the
world.
Forms of proposal for the insurance of lives are to be obtained at any
Post Office Savings Bank, and anyone can see there the tables of the
premiums to be charged, and obtain all other necessary particulars. As
examples of the various ways in which insurance through the Post Office
can be effected, take the following:—The life of a girl between fifteen
and sixteen years old may be insured for £10 by an annual payment
through life of 3s. 10d., or by an annual payment to the age of sixty
of 4s., or by a single payment of £3 17s. Or she can assure £10 at
the age of sixty years, after the payment of the final premium, or at
death, should death occur before that age, by an annual payment of 4s.
6d., or by a single payment of £4 7s.
There are some companies which insure lives by the payment of a small
sum weekly or fortnightly, a collector calling for the payments when
they become due. This is a dear system; no more profitable than the
purchase of tea half an ounce at a time. In these days of savings
banks it is no excuse that it suits scantily filled purses. Instead of
adopting it, it would be far better for their own interest if people
of small means would lodge the sums they would otherwise have paid
the collector in the Post Office Savings Bank, and at the end of the
year direct that the amount be applied to the payment of an insurance
premium.
Besides the two forms we have mentioned there are other varieties of
insurance. You can insure plate glass against breakage, boilers against
bursting, and crops against hailstorms. The lives of horses and cattle
can be insured, and pig insurance companies are not unknown.
Insurance against accidents is another useful variety. It dates
back from 1849, when a company was started to insure against the
consequences of railway accidents. In return for a payment of 3d., 2d.
or 1d. made by first, second, or third class passengers respectively,
for insurance during a single journey, it undertook to pay £1,000,
£500 or £200 in case of death by such an accident, or a certain weekly
allowance in respect of personal injury not resulting in death. A
few years later the business was extended, and people can now insure
against accidents of all kinds by a yearly payment proportioned to
the degree of risk supposed to attach to various occupations or other
conditions of life.
There is another kind of insurance worth knowing about: Fidelity
Guarantee Insurance, it is called. By means of it employers are
guaranteed against the dishonesty or insolvency of their servants.
Previously, people in positions of trust often got others to be
surety for them, but the system of private suretyship led to many
hardships. Solomon was right, and let all wise girls take note of it:
“He that is surety for a stranger shall smart for it; and _he that
hateth suretyship is sure_.” The guarantee of a company, given as a
pure matter of business, and for an annual payment, is now generally
preferred. Of course, before giving a guarantee the company makes
very particular inquiry regarding the character of the person and the
checks to be used by the employer. Some companies insure only against
embezzlement, whilst others protect the employer against any failure to
make good the sums entrusted to the _employé_. The premiums to be paid
annually range from 10s. to 60s. per cent. of the sum guaranteed.
_Annuities_ are our next subject. An annuity is a periodical payment
made either for a fixed number of years or whilst a given life lasts.
It may be paid yearly, quarterly, weekly, or otherwise. It may come to
one as a gift, or be left as a legacy, but it can also be purchased
through an insurance company by the payment of a certain sum of money
supposed to be its equivalent in value. Annuities bought in this way
may be either _immediate_—that is to say, the payment of them beginning
at once—or _deferred_; in other words, the enjoyment of them postponed
till after a certain number of years have elapsed. If, say, £100 is to
be received each year by anyone, he or she is said to have “an annuity
of £100.”
For young people, with all the chances of life before them, the
purchase of an annuity is seldom wise. The sum, observe, sunk in this
way can never be had back again, even though an opportunity should
occur for making a much more profitable use of it. But when people grow
up, it is often the best way to make the most of a small capital, and
to prevent their becoming, perhaps, a little later in life, a burden
on their friends. The great thing, in settling whether to invest money
thus, is to discuss the matter with common sense, and to ask, “What
should I do, so as to be most useful to myself and to others?”
Annuities, both immediate and deferred, are granted by the Post Office
for any amount not less than £1 or more than £100 to any person not
under the age of five years. Forms of proposal for purchasing them are
to be had at any Post Office Savings Bank. The sum charged varies with
the age and sex of the person on whose life the annuity is to depend,
and, in the case of deferred annuities, with the number of years which
are to elapse before the commencement of the annuity.
The payment of a deferred annuity may be made in one sum, or it may be
broken up into a number of small payments at regular intervals. You
can, by a slight increase on the payment for a deferred annuity, secure
the return of the purchase-money to your representatives in the event
of your death before the commencement of the annuity, or to yourself,
should you for any reason wish to be out of the bargain.
A word of advice is given by a sensible writer to all who are life
annuitants. “They should bear in mind,” she says, “to live well within
their income, as generally the whole of their money is one of _life
interest_, and there will be no fund to fall back upon to pay funeral
expenses, doctors’ bills, wages, etc., when they die, but their
savings.”
Fire insurance, life insurance, and the purchase of annuities are
amongst the sensible transactions of prudent and saving people. But
sometimes the prudent and saving, quite through innocent misfortune,
come down in the world, and have a difficulty in making both ends
meet for the present, let alone providing for the future. Under these
circumstances people without much experience, and especially women who
are not business women, are very apt to fall a prey to the wiles of
the professional money-lender. To the artful ways of the money-lending
fraternity we shall devote what remains of this article.
If anyone is in want of a little ready money she has only to turn over
the morning papers, and she will there see a score of advertisements
headed “Money,” and all offering “loans on easy terms.” How is she to
know, unless she has been told, that these petty money-lenders are one
of the most serious evils of our present state of society, and that
there are hundreds of them preying on the ignorance, the impulsiveness,
and the necessities of their fellow-creatures?
“There is considerable variety,” says a writer in the _Leisure Hour_,
“in the bait used by these angling money-lenders, but great sameness
in the general form of the cruel hook by which poor silly fish are
caught. Some of the advertisements are from ‘loan offices,’ others from
‘private gentlemen’ who are ‘willing to advance money’ and who have
‘no connection with loan offices.’ They all seem to have unlimited
resources, from £2 to £1,000 being at the disposal of every borrower.
The invitations are to respectable persons, male or female, in town or
country; distance no object; personal application preferred, but not
necessary. ‘Strict secrecy and prompt despatch’ are usually promised;
answers to application ‘by return of post’ and money sent ‘at a
day’s notice.’ So obliging are these gentlemen, ‘forms will be sent
_gratis_,’ and in some cases the borrower is assured there are ‘no
law costs’ and ‘no office fees.’ More convenient still there are ‘no
securities required.’ To borrow is an easy matter after all.
“But of course there must be securities of some sort. Well, the
borrower’s ‘note of hand’ is sufficient, with deposit of deeds, leases,
life policies, or, if preferred, a bill of sale on furniture or other
goods ‘without removal’ (_i.e._ at the time of borrowing). Then the
repayment may be by ‘easy instalments.’” How accommodating!
Many of these assertions the needy borrower will find abundant reason
to doubt before the loan is completed. On application she will be
puzzled to reconcile the terms named to her with those in the alluring
advertisement, and will find the rate of interest to be truly “five
per cent. and upwards,” fifty per cent. being no uncommon demand,
in addition to expenses connected with and deducted from the loan.
Should she complain about the expenses, she is usually told that they
are rendered necessary by the existence of some special risk in her
particular case.
The writer whom we have just quoted tells a sad story of a poor
widow lady, who, being pressed for her rent, saw a money-lender’s
advertisement and answered it. The money-lender came, and obtained the
lease of the house as a security, “only a form, you know.” He was such
a polite, kind man; and interest, she understood, was to be only £5 per
cent.
Soon after the widow had an offer for her house and furniture, so she
went to redeem the lease held in security by the money-lender. The
poor woman, who had signed the papers presented to her, either without
reading them or without thoroughly understanding them, then learned
for the first time that “£5 per cent.” did not mean £5 a year for the
loan of a hundred pounds. The money-lender’s advertisement did not
say “£5 per cent. per annum.” He lent his money at £5 per cent. per
month, or £60 for a year for £100, besides various fees and charges.
The moral of the story is that it is very foolish to have anything to
do with money-lenders, and that it is still more foolish to go into any
transaction without making perfectly certain as to the exact amount for
which one is liable.
There are some money-lenders who only pretend to lend: as a matter of
fact, they never do. Their profits are derived solely from booking
fees, office expenses, and charges for the sham “inquiry,” which always
is of so unsatisfactory a nature that the loan cannot be granted. It is
true the advertisements of these gentry often state that no preliminary
fees or office expenses of any kind are charged. The borrower, however,
is in such cases informed that these payments are dispensed with only
in the cases of certain classes, in none of which, we need hardly say
is she fortunate enough to find herself.
(_To be continued._)
THE SHEPHERD’S FAIRY.
A PASTORALE.
BY DARLEY DALE, Author of “Fair Katherine,” etc.