Here is a man that is worth twenty thousand dollars; he is doing a
thriving manufacturing or mercantile trade; you are retired and living
on your money; he comes to you and says:

"You are aware that I am worth twenty thousand dollars, and don't owe a
dollar; if I had five thousand dollars in cash, I could purchase a
particular lot of goods and double my money in a couple of months; will
you indorse my note for that amount?"

You reflect that he is worth twenty thousand dollars, and you incur no
risk by endorsing his note; you like to accommodate him, and you lend
your name without taking the precaution of getting security. Shortly
after, he shows you the note with your endorsement canceled, and tells
you, probably truly, "that he made the profit that he expected by the
operation," you reflect that you have done a good action, and the
thought makes you feel happy. By and by, the same thing occurs again and
you do it again; you have already fixed the impression in your mind that
it is perfectly safe to indorse his notes without security.

But the trouble is, this man is getting money too easily. He has only to
take your note to the bank, get it discounted and take the cash. He gets
money for the time being without effort; without inconvenience to
himself. Now mark the result. He sees a chance for speculation outside
of his business. A temporary investment of only $10,000 is required. It
is sure to come back before a note at the bank would be due. He places a
note for that amount before you. You sign it almost mechanically. Being
firmly convinced that your friend is responsible and trustworthy; you
indorse his notes as a "matter of course."

Unfortunately the speculation does not come to a head quite so soon as