MANAGEMENT OF COOPERATIVE SOCIETIES. 24] 



dence on the part of directors will nearly always be a sufficient 

 guard against embezzlement; and in all events there will be 

 the security of a bond. And this bond, by the way, should 

 always be that of a security company, and not that of an 

 individual. No man's integrity can be absolutely assured, 

 and tlicro is no reason in asking an uninterested third party 

 to pay for his mistaken confidence in the honesty of a fxiend. 

 Besides, such bonds are often unsafe and uncollectable. The 

 bond of a security company for $1,000 is better than a friendly 

 bond for $10,000. In the first place, the thorough investiga- 

 tion w^hich the company must make, before insuring, is a 

 great safeguard, and, secondly, the absolute certainty of 

 prompt and relentless prosecution to follow the discovery of 

 any wrong-doing is the most powerful restraint on any such 

 inclination. The usual charge for such insurance is one per 

 cent per annum on the amount of the bond. It amounts to a 

 reduction of salary to that extent, and should be paid by the 

 corporation, who will in that way most readily secure a bond 

 of that kind. It will be hard to refuse the tender of what 

 appears to be a sufficient individual bond, and the tendency 

 of the employee will be to save himself the expense of the 

 security bond by inducing some friend to become responsible 

 for him. 



But there are more serious temptations, arising from the 

 power of the manager to throw business, and against this no 

 bond can provide. If there are purchases to be made, he can, 

 if he will, secure private commissions on these purchases; and 

 if there are sales to be made through brokers, he can obtain a 

 private interest in the brokerages. 



The Manager Is Sure to be Tempted. — Sooner or later these 

 advantages will be offered him by some unscrupulous person 

 who believes that all men have their price. It is not likely, 

 at first, to be a direct and open offer which can be openly 

 resented and reported, but there will be conversation opening 

 the way to advantages of some kind to be given to the man- 

 ager, in return for undue favors, which will rapidly crystallize 

 into actual business, if the manager proves susceptible. And 

 it is possible for so large an advantage to come to him, with 

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