Arizona republican., 1917-01-30
THE NECESSITY OF A
 CREDIT STATEMENT

CREDIT STATEMENT l
 The reasonableness of a banks re- quest for a written statement from d borrower as to his financial condition should be apparent to any just and right thinking individual. A banks resources are not essentially it's own. It's capital and surplus belong to shareholders. It's deposits are the property Of it's patrons. It therefore exercises q sort of trusteeship for the public and it's custodian of the funds of others In the lending of this money for any purpose il is imperative that the bank use all due precaution to guarantee it's repayment iil full at a special time. This can only be ac.
 complished by having full information as to the worth and ability to repay of the individual seeking the loan. Such assurance can be definitely given only through the medium of detailed credit statements in writing, obtained from the borrower and analysed and verified by the bank. The oank, in eX- tending credit becomes. in | sense, a partner in the business of the borrow CT fer the time being, and as such certainly has a right tc know the solvency and prospects of the enter prise in which he is engaging together with the moral and financial worth of the person or persons with whom i it is associated.
 The furnishing of credit statements 1 is often of decided advantage to the borrower as well as protection to the ] bank Every worlhv banker is. or may 1 be, the confidant of his customers. | Why, therefore, should it be unreason- 1 able for a borrower to acquaint his banker fully with his true financial ! condition and the specific purpose for which accommodation is sought if he is
 honest and financially responsible. the disclosure cannot injure him. Ii he is
 interruptions and insolvent. most as | sUredly the banker needs to have
 knowledge of all the facts in making l his decision to withhold or extend the ! credit asked for. Frequently it occurs
 that the making of a credit statement to q bank. which is subjected to a | thorough analysis, gives to borrower
 the first intimation Of his real finan- l cial condition. It may be. also, that | this analysis of the statement may en- | able the banker, through his experi-
 ence in such matters and lis unbiased l judgment, to point out defects and wrong practices, which, if persisted in
 might eventually lead to disaster to i the borrower.
 ! The difficulties confronting the 1 country banker ir securing credit | statements rom cuSlOnltTS OllltI III l degree only from those which the city
 banker must encounter. Both deal with individuals, firms and corpora 1 tions. The purpose for which money l is desired and the proportionate | amount of credit which may be eX- | tended are similar. As a rule country merchants and manufacturing con- cerns which keep books regularly; take i inventories and make commercial re- | l. NIf pl, i ing credit statements to banks. for 1 they can see the wisdom and reason 1 ableness of such a thing. The coun- | try banker may meet a real problem, 1 however, when he endeaVors to per suade his farmer customers that credit | statements in writing from them
 would go far towafd materially light
 ening the burdens of banking. Ere 1 quently, such q request is met with an i instant and indignant declination. Ac- | companying this is an air of injured | pride and an unconcealed conviction l that an attempt is being made to re- | fleet on his integrity and standing II, ! the community. The less tact used by
 the banker approaching the subject.
 the greater the indignation registered
 by the customer.
 Few farmers keep books on them
 selves or even make a record of their
 operations, consequently they are un-
 able to furnish q correct detailed i statement of thier financial condition. i Agriculture and stock raising are as
 much g. serious business as any other
 enterprise. Much stress is now being placed on farm accounting and when the practice of this principle becomes | general, farmers will see the wisdom
 of it and be able to compute the gain
 or loss in their operations for the
 year. Thes will not decline to make
 statements because of an unwilling
 ness to admit their neglect of a neces-
 sary business habit.
 There are two things about which
 any same human being is naturally reticent, viz, his family and financial
 affairs. An attempt to pry into either
 is met with an immediate rebuff As
 soon as the farmer is convinced, by
 reasonable arguments, of the business
 necessity. for showing his financial
 condition when credit is applied for,
 and that the request is not made in
 an effort to meddle in his affairs, this
 antipathy will likely disappear.
 Generally speaking. all the difficult
 ties mentioned may be successfully
 obviated by the use of reasonab ble arguments, tacI and diplomacy in
 preaching the subject of credit state
 ments. After all success in this direc .
 ton is a matter of education and in wolves the use of a method suited to the particular case in hand. Little
 trouble should be met in getting statements from those making first application for credit Borrowers of lorg standing. who have been acus- toned to receive accommodation on q mere statement of their needs, may marvel at the innovation of written statements for while and even com- bat the idea, but tactfui handling of the situation will doubtless result in attaining the desired result-C. w Gordon, cashier Farmers Savings bank Marshall, Missouri member Agricul-