The daily morning journal and courier., 1905-03-30
GETTING CREDIT AT A BANK.

Statments on Which Accommodation
 Should Be Based-Yalue of Cles- Analysis.
 the Fourth National Bank of this city, who was one of the first in the United States to point out the necess- ity of credit departments for banks, in speakin on Bank Credias' at the re- cent convention of the New Jersey Bankers Association at Atlantic City made these points:
 Tt is becoming evident to students of financial affairs that there is a gradual change of method in the buy ing and selling of commercial paper from that which obtained in former times. Borrowers no longer confine themselves to one place, but go where funds can be procured to the greatest advantage. Mercants in the smaller towns go away from home to borrow money, and bankers in smaller cities go away from home to procure invest ments. Often bankers do not feel that they can break the rate locally, but it frequently happens that they will send to the large money centres and buy paper of their home merchants at a lower rate than they would feel that they could take the note for direct. One-eigth per cent. will take many business man from home for his ac- commodation. The practice is growing for the banks in larger cities to buy commercial paper for their correspon- dents, and in the face of these changes in method it becomes more and more imperative for bankers who handle commercial paper, and who are To- cated in the large money centres, to be fully informed in the widest mea- sure upon the credit of borrowers.
 "The cornerstone of credit science may be said to be the requiring from borrowers of statments of the condi- ton of their affairs. This has now be- come an accept custom in the re- lation between banks and borrowers on commercial paper. It has come to be recognized that the practice Is of value to both the bank and the borrower, and this may be considered the reason for it's success. Furthermore, the making of statements oftentines renders con- ceriis themselves aware of weakness in their methods of operation, finan- cial practices and results of business. The banker, having a substantial in- 1 terest in the success of the borrower, may frequently give wholesome advice or timely warning from his wide .ex- perience in commercial affairs and his foresight in monetary matters.
 "I wish to make clear my convic- ton that a statement which is not submitted to analysis is menace. Be- cause, first, if errors have been made if lack of judgement on the part of the management of the concern has been shown which is not brought to the at tention of the borrower; if reckless methods have been indulged in or any dishonesty has been practised, the | very fact that a statement has been received and accepted by a banker
 either lulls into sense of security the careless or needless borrower, con firms the reckless financial habit, or establishes the dishonesty if such ex- l ists. I repeat that an unanalyzeo
 statement Is worse than no statement
 at all. Frank and open statements i bearing upon their face the evidence
 of a true condition of affairs are, te
 my mind, the greatest factors in es. {tablishing credit, Nothing will more I firmly cement the union between Dor.
 rover and banker than such a state, lment, and nothing will be of more. value to 8 banker and of less harm tc
 an honest, contemplating borrower. Hid, den facts are revealed by analysis, ant
 skill in reading between the lines |
 an important part of the credit mans
 training. By this means, weakness ma. ' frequently be discovered and propel
 steps taken to avert trouble before acute difficulty. arises" ...