Back to chapter 26 about strength
Translated by Ralph Anzarouth and an anonymous friend
Cowardice is the opposite of bravery [a form of strength] and in the words of the philosopher it takes three forms: the first entails being in a state of self-induced and totally causeless fear, like when somebody imagines numerous troubles besetting him even before they arise. The second entails fearing something more than it warrants. The third is when somebody cannot sustain any form of adversity.
Rabbi Shlomo Ibn Gevirol wrote that this trait is found in the lesser souls etc. and it will deprive [the coward] of many benefits, since he will tell himself that he will not undertake any business venture lest he make a loss; he will not fast lest he become ill; he will not give charity lest he become poor. In this way he will not undertake any action, as it is written (Proverbs 22, 13): "The lazy man says 'there is a lion outside prowling in the street'." However, in situations where danger is real, his fear is justified, as it is related about the person who, when his friend wanted to send him to a place of danger, refused to go; and when his friend berated him he replied: "I'd rather take your insults and remain alive than receive your praise after my death."
We can see this trait of cowardice in the hare, which is the most cowardly of animals. When it is in the forest it will flee even from the sound of a falling leaf.
[King] Solomon said in the book of his wisdom that nothing scares man more than knowledge of the wickedness of his deeds since he fears the punishment that he will receive for them. Tullius (Tully) said : “Fear of death is worse than death itself. If you want a life without fear, do good and say little”.
We find it written that Dionysius, the zealous ruler of Syracuse, was the most cowardly of people who from his great fear and cowardice was never relaxed nor at ease all his days. He had a faithful friend1 who was constantly praising and admiring his rank and status and used to recommend that he should give thanks to the Lord for all the good and benefits which had been bestowed upon him. Dionysius summoned him one day and sat him on a chair beneath which he kindled a large fire and above which he suspended a sharp sword pointing at his head and hanging on a thin linen thread. He also ordered that a table be set in front of him with all kinds of delicacies. When the friend realized the danger, he immediately started to scream and plead to Dionysius to remove him from there. Dionysius then told him: "[I will do so] if you will cease praising my status and lifestyle, since I find myself constantly in a worse state of fear and trembling than that which you were unable to endure even for a short time. This is because I think all the time that Gehinom is gaping beneath me and the sword of the Lord's vengeance is over my head as a result of the burden of ruling which rests on my shoulders and which one must conduct with utmost integrity."
Note of the translators:
 This is the famous Damocles.
The whole book Tzemach Tzadik in Hebrew (printed in Rashi characters) can be downloaded in PDF format and read online at Hebrewbooks.org. Chapter 27 about cowardice is found at pages 55-57.