COMMERCIAL DEBT PROTECTION.
Scam progress has been made in the formation of a Commercial Debt Insurance Company. The practicability of the scheme rests upon the improved state of debtor and creditor law, and the greater certainty and promptitude with which the assets of insolvents can be realized and appropriated to the benefit of ereditors.
This is an extension of that system of pfoteatiwhich already, exists, and -which enables individuals to guard awrust losses and contingencies incidental to business and the uncertainty of health and life. The Sea Insurance Office, the. Fire Office, the Life Assur- ance Office, the Guarantee Society, the Sick and Burial Associa- tions, are all of that class. An agreement to" over a debt in the event of the debtor's failure is not more extraordinary than a policy to make good a certain sum in the event of a ship being lost' or' a house being destroyed by fire, or a clerk proving a defaulter. But the probable effect of a general resort to the Pietection against loss offered by the Commercial Debt Instirance Company is on first view startling. Within what bounds can the book or bill debts of a mer- cantile country like England be confined ? Take a single street of a busy town, and attempt to form an idea of the outstanding debts which may be due to the business occupiers : the attempt may give some idea of the difficulty of arriving at the truth : but if so of the town, what of the kingdom ?
'It is not fanciful to suppose, that should the proposal prove prac- ticable, (there appears to be little doubt about its desirableness,) the practice will be introduced of covering, on certain terms, all the bad debts which may ocour to individual firms in a year. This involves, of course, perfect confidence in the discretion of the in- sured in respect of the orders he executes. Such an arrangement will greatly simplify the transactions, as well as reduce their number. After all, it is merely thii adoption of the principle under which a sea insurance company will run' the risk'-of ship- ments to take place during a year by vessels of a certain class ; the names, the number, and the times of sailing, being unknown
• , • when the contract is gone into. . I1 , • e ,
Let the operation, howeiver, of guaranteeing k )debt, be looked at in the form it is likely to assume at the milsetft-tliat is to-say debts due by particular persons. Orders, for' goodthire,generdlii. taken by the agents of the wholesale dealer resident in towns, or' by " travellers" who visit localities periodically. I It is not likely that a guarantee will be sought for against a debt incurred by a man of known standing and substance. It is the new beginner,' the man of doubtful circumstances, or the trader who has already gone through the Bankruptcy Court, whose case will come under- the rigorous scrutiny of the Commercial Debt Insitrance Company. That concern will not run the risk nuless sonic 'be known of the debtor; and if the " parent " establishment WbAendon, the' appointment of an agent in every locality whereDlinsiness may be done, and whose duty it will be to make lrinigIf tmenuiinted with the circumstances of every man in Irtieineas, becomes an indispensable part of the machinery. .The • consequences are worth looking at. The " traveller " who sees a new door open, before he enters to solicit an order, will naturally rePair to the So- ciety's agent, and ask his terms for guaranteeing' rt4e'bt from-Finch and such a person ? If the rate bell h, it *ill heeeme a question ir
how far an order should be either ti ifor or taken. Trades- men of doubtful standing , will , be 'pith with in a similar way.
Here is an element of cantle t, Whireliqh-titstWorking must strike an effectual blow against theTleta6fite-'xif {4ra:4+mi/64:late credit. As matters stand, nothingria more diffibultrthinto-arrive at a satisfac- tory estimate of the trnstworthineskin. a 'Money pointof view, of a particular person. The best infhtmation Shouldini most instances be found on the spot ; but person43wlio live in the' sane place feel a delicacy, if not a sense Of danger, in pronouncing. a decided opinion, should truth reqUire that opinion to be adverse. But no delicacy will be felt by the guaranteeing party : the preminin asked is the exponent of the opinion entertained of the position and circum- staluieti of the debtor.
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