12. Which would be better, and how much, to pay $4000 cash for a house, or $4374.93 in 3 yr. 6 mo., money being worth 7% ?

13. I can sell my house for $2800 cash, or $3000 and wait 6 months without interest. I choose the latter. Do I gain or lose, and how much, money being worth 6% ?

SURETYSHIP

Suretyship is a contract whereby one party (usually a fidelity or surety company) binds itself to indemnify another party (usually a person or corporation employing some one in a position of trust or confidence) against loss by the dishonesty, willful neglect, or misconduct of an employee; or an agreement to indemnify one party to a contract against loss due to the failure of the other party to fulfill the contract. The instrument by which a contract of suretyship is made is called a suretyship bond.

Suretyship bonds are generally required of employees in banks; collectors and cashiers; treasurers of companies, societies, cities, villages, towns, counties, and other political divisions of the country; administrators of estates; guardians of infants; managers of business enterprises for others; and persons in many other positions of trust. Contractors in all sorts of undertakings are often required to furnish bonds for the proper fulfillment of their contracts.

Suretyship is generally classed as a branch of insurance; but it differs from ordinary insurance in that the surety receives its premium for services rendered, rather than for risk assumed; and that it does not expect losses when executing its bond. Losses occur occasionally from causes unforeseen by the surety, or arising after the execution of the bond.

The company, before issuing a suretyship bond, inquires into the character of the person applying for the bond, his habits, business standing, and reputation. If these are not satisfactory, the application is refused.

A suretyship bond always involves three parties:

a. The principal, or party required to furnish the bond. (The "Employee," in the bond given on page 401.)

b. The surety, or party joining with the principal in an agreement to pay indemnity for loss. (The Surety Company.)

c. The obligee, or party to whom the indemnity is promised. (The "Bank" in the bond given on page 401.)

The premium paid to the surety company is computed at a certain sum for each one thousand dollars of the bond.

The following form illustrates the essential parts of one kind of

SURETYSHIP BOND

American Surety Company

Amount, $2000

Premium, $8.00

WE, John Doe, as principal, hereinafter called the "Employee,' and the American Surety Company of New York, hereinafter called the "Surety Company," as surety (in consideration of the payment of an agreed premium to it, the said "Surety Company"), bind ourselves for the term commencing January 1, 1908, at 9 A.M., and ending January 1, 1909, at the like hour, to pay the Exchange National Bank of St. Louis, hereinafter called the "Employer," at the home office of the Surety Company in the City of New York, such direct pecuniary loss not exceeding two thousand dollars, as it may sustain of moneys, bullion, funds, bills of exchange, acceptances, notes, bonds, drafts, mortgages, or other valuable securities of similar nature, embezzled, wrongfully abstracted * in the course of his employment as Messenger of said employer.

*

*

In witness whereof, said Employee, as principal, has hereunto set his hand and seal, and said American Surety Company of New York, as Surety, has caused the execution hereof by its President, and Assistant Secretary, and its seal to be hereunto affixed, at the City of New York, this 24th day of December, 1907.

JOHN DOE, Principal [L.S.] AMERICAN SURETY COMPANY OF NEW YORK [L.S.] RICHARD ROE, President

Attest: HERBERT HOOKWAY, Assistant Secretary

Oral

1. Who is the principal in the above bond? The surety? The obligee?

2. How much is the premium? Who pays it? Who receives it? What is the rate per $1000?

3. If John Doe remains in the employ of the bank as messenger for five years, how much will his bond cost him, during that time, at the same rate?

4. How many parties are there in a suretyship bond? Name them.

5. How many parties are there in an insurance contract? Name them.

Written

1. The treasurer of a bank gave a bond of $ 45,000. What did the premium amount to, the rate being $4 per $1000?

2. A firm in Chicago employed a man to manage a branch store in Cleveland, requiring him to give a bond for $7500. He had to pay a premium of $56.25 per year. What was the rate per $1000 ?

3. A cashier procured a bond, paying $5 per $1000. The premium amounted to $22.50. What was the amount of the bond?

4. A tax collector held office for four years, giving a new bond each year. He paid $56 in premiums during the four years on a bond of $3500. What was the rate per year on $1000 ?

5. A contractor furnishing supplies to a large manufacturing concern gave a bond of $12,000 for the faithful performance of his contract. What did he pay in premiums during six years, the rate being % per year?

6. A paving contractor gave a five-year bond for the fulfillment of his contract, paying a premium of 1% per year. What was the amount of the bond, if the premium amounted to $150?

COMPOUND PROPORTION

An equality between a compound and a simple ratio is a compound proportion; thus,

Find the fourth term.

SOLUTION. — First change to a simple proportion, we have, 3 x 4:6 x 8::3:x.

Then divide the product of the means by the given extreme,

1. If 5 men earn $72 in 8 days, how much can 10 men earn in 6 days?

SOLUTION. — Since the answer is to be in dollars, place $ 72 for the third term, and arrange the terms of each couplet according as the answer should be greater or less than the third term if it depended on that couplet alone.

5 men: 10 men 8 days: 6 days

:: $ 72: (x)

Since 5 men earn $72, 10 men can earn more, so we place 10 men for the second and 5 men for the first; and since they earn $72 in 8 days, they will earn less in 6 days, so we place 6 days for the second term, and 8 days for the first. Dividing the product of the means by the extremes, we have,

Consider the answer as the fourth term, and place the number that is like it for the third.

Arrange the couplets as if the answer depended on each couplet alone, as in simple proportion.

Divide the product of the means by the product of the extremes. Cancel when possible.

2. If four horses eat 10 bushels of oats in 5 days, how many bushels will be required to feed 5 horses for 2 days?

3. If 10 men working 8 hours a day can do a piece of work in 12 days, how many days would it take 6 men, working 10 hours a day, to do the same amount of work?

4. If it costs $84 to carpet a room 24 ft. long and 21 ft. wide with carpet 1 yard wide, how much will it cost to carpet a room 25 ft. long and 12 ft. wide with carpet 27 inches wide?

5. If a wheelman rides 144 miles in 3 days of 6 hours each, how many miles can he ride in 5 days of 9 hours each?

6. A section of street 33 ft. long and 20 ft. wide can be paved with 15,840 stones, each 9 inches long and 8 inches wide. How many stones 12 inches long and 10 inches wide will it take to pave a street 12 rods long and 16 ft. wide?

7. If 18 men chop 360 cords of wood in 12 days of 9 hours each, how many cords could 17 men chop in 13 days of 10 hours each ?

8. If 50 men, working 10 hours a day for 11 days, can dig 25 rods of a canal 60 ft. wide, and 5 ft. deep, how many rods of a canal 90 ft. wide, and 7 ft. deep, can 140 men dig in 22 days of 8 hours each?

9. If 60 men can build a wall 150 ft. long, 64 ft. high, 2 ft. thick, in 8 days of 10 hours each, how many days of 8 hours each will 36 men require to build a wall 180 ft. long, 80 ft. high, 21⁄2 ft. thick?

10. How many men will it require to mow 48 acres in 3 days of 12 hours each, if 6 men mow 24 acres in 4 days of 9 hours each?

11. If 4 lb. 6 oz. of tea cost $2%, what will 3 lb. 11 oz. cost? 12. If sufficient flour to fill 8 bags containing 98 lb. each can be produced from 16 bushels of wheat, how many bushels will be needed to fill 14 barrels of 196 lb. each?

13. My gas bill for the month of November is $3.50 when I use 6 burners 3 hours each evening. How much ought it to be for the month of December, when I use 4 burners for 5 hours each evening?

14. How long a piece of cloth .4 m. wide can be made from 175 Kg. of wool, if 45 Kg. make a piece 25 m. long and .6 m. wide?

15. How many hours daily ought 30 men to labor to perform in 10 days a piece of work which is as great as a similar job which 25 men, working 12 hours per day, accomplished in 12 days?

16. If $475 yield $171 interest in 6 years, how long will it take $960 to double itself at the same rate?

17. A bin 8 ft. long, 6 ft. wide, and 4 ft. deep will contain 270 bushels of wheat. How deep must another bin be built that is 12 ft. long and 9 ft. wide, to hold 405 bushels?