The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1897-05-17


highly and have SO little caution that they
will risk everything they have. or can beg
or borrow. upon some venture wnich as
often turns out disastrously as otherwise
To me il is sad TO see man plunge not
only himself but his friends into ruin from
his own blind infatuation and cNcrween'ng
vanity.
From these few remarks 1t may be in
ferred that statements are OF no 'alue.
This, however. is not the case. Statements
are OF the utmost value when you have
such an analytical knowledge OF tho matters
as will enable You to give them their true
and proper value The banNer shuulu so
study his borrower as TO know how much
truth and how much error his statement is
likely to contain. Then the contouts of
statements are valuable and SO unerIins
that. properly made and studied, viii pre-
vent any bank from making a 'Oss, There
is no quarrel between tho banks and tier
borrowers They well know that they are
necessary to each othor ana cultivate close
confidential relations. rh" borrower who
has NOT the confidence OF his banker. and
the banker who has not tho confidence OF
his borrower. had best part company When
each has and deserves the confidence Of the
other, wouln suggest that uniform state
mcnts something like the following might
he useful and should he renewed n regular
intervals. whether the borrower receives
constant accommodations or not viz:
BUSINESS RECORD or BORROWER.
Experience in present line of business.
Capital in business
Capital needed in business.
Cash on hand
Good bills rendered on hand. not due and
when due.
Good bills rendered on hand. overdue and
secured,
Bills rendered on hand and no. secured.
Good accounts received, not due and
when due
Good accounts received. overdue and Sc
cured
Accounts received. overdue and not Sc
cured.
Stock OF merchandise on hand
Stocks and bonds on hand.
Miscellaneous personal property
Peal estate rot exempt.
Then should follow liabilities
Bins pay 20 banks, when due and how se-
cured.
Bills pay to others. when duo
Accounts PAYABLE wh,n due.
Other liabilities. il any.
Now for the analysis of such state
ment:
The cash can. Of coursr he taken a, mar
The accounts received and bills rendered
no; due, can In ordinarily ,ypll managed
business houses. be consi.Ia"ed worth 90
per cont of their face; notes and accounts
overdue and secured, ghOull 10 valued at
- per cent notes and accounts. overdue
and unsecured. should he valurl 4, u rer
cout The merchandise should he estimated
at 50 per cont Of cost. Tho e,orke bonds
aud Other property should be taken at
about 90 per cent Of the market value. The
real estate onght scarcely 70 lie ta;,,n INTO
account in most cases. because ii is rel.
dom a quick asset Thou artnr tteso dc.
ductlons and valuations ,ho assot. arr,
twice as much as the Iahili,los. ,nrnllmg
the desired line ~ credit. AMI have rccil
approximately SO for some ilma md am OK
periencod and honest man is in rharso Of
the business. the risk IAN eencrpIlv b. 70.
rarded as good one. II sta'r,,nniv 80
rendered aud So appraised should hc mi
formly required. and IL hanks Wonld Also
u,ely refuse 10 lond loll,r ia any ofCir,r
or director. or TO any corporation in wrich
they are Interested. who often usc mel,
positions TO terrorlze suh,r,linnio cffire,s
fewer items would bo charged 10 profit md
loss and the weeds would much sooner hn
cleared from the commer,inI world. i,,,or-
est rates would naturally decrease and IN.
banks mako moro clear monev
1t may he asked why ,yn sal, III, nm
parent assets on a ,tnt.ne,t +, N ~ I In