New Ulm review. (New Ulm, Brown County, Minn.) 1892-1961, 1916-03-22
CREDIT BUREAU IS
A VITAL NECESSITY
MILL CITY EXPERT EXPLAINS
COMPLEX PROBLEM OF
PROPER RATING.
LOCAL MERCHANTS WILL DIS
CUss FORMATION OF CLUB
NEXT FRIDAY.

No large business enterprise, either
wholesale or retail, can get along or grow
without large amount of credit business.
according to O. R. Parker, manager of
the Minneapolis Credit and Rating
Bureau, who spoke to the business men
OF New Ulm at the Commercial Club
rooms last Friday evening. In a pros
porous community this is true to
greater extent even than in sections of
the country where adverse conditions
prevail. Credit business is necessary
and has come to stay. What the
merchant of today must look out for
is to protect himself from the professional
deadbeat usually found in We floating
population of the larger cities.
A system of rating must be established
which will minimize the losses incident
to bad debts. A rating of that sort can
not be established with any degree of
reliability for all business men collectively
but each Individual business man must
follow his own rules even after he has
been notified of the fact that certain
persons are slow pay or undesirable
customers. A number of things must be
taken into consideration, among them
the kind Of business the prospective
creditor is in and the kind of debts the
man asking for credit has neglected or
failed to pay. Mr.. Parker gave number
OF Instances among customers of Mime
apolis stores where they are absolutely
gilt-edged and still are slow pay.
The giving of credit and the system of
rating revolves around the three C's,
capital, character and capacity. While
the first probably is the first essential to
the credit men, the character of the man
asking for credit is really the thing that
counts. A man may have an income
say of So, 600 year. That would be his
capital stock with which to do business
with the merchants. If he manages to
spend this amount, however, and several
hundred dollars more, his credit rating
would not compare favorably with the
one given a man who earns but two
dollars day and manages to live within
that income. The worst class of ac-
counts according to Mr.. Parker are those
Of the good fellows whom it is
almost impossible to refuse credit.
The speaker stated that one of the
large department stores doing business
in Minneapolis to the extent of over two
million dollars a year has the credit
rating down to such fine point that
their losses amount to less than one
tenth of 1 per cent. Others again where
the margin of profit is great deal larger
suffer greater per cent of losses because
of more liberal policy of giving credit.
Minneapolis has the matter of rating
down to a science. When new family
takes up residence in the Mill City it's
record is Immediately looked into before
credit is asked for. The information is
gathered from various sources. some
from the banks and some from the
record the family has left behind at its
former. place of residence. In no case
do they take snap judgment. All of the
information is gathered first and then
dovetailed SO as to form complete
record.
Mr.. Parker was in doubt as to how the
merchants of New Ulm could proceed
along this line as the city really is too
small to employ salaried secretary or
manager and without this the scheme
would be apt to prove failure because
the information gathered should be avail
able at moments notice. The idea of
giving each fanily's rating to every
business man would prove a failure be-
cause each family's rating would soon
become public property and libel suits
would be the result in many instances.
A plan was suggested to the business
men present, however, and it is possible
that this will be put into effect. A
meeting of the business men of the city
is called for next Friday evening at the
rooms of the Commercial Club at which
time the feasibility of organizing a credit
and rating association will be thoroughly
discussed. ~ W
An illustrated lecture IN Tnd;o will ho