Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-06-08


give to the merits OF g. new industry
or the expansion of an old, or ne"
security in which customer Is dpout
to invest? How often are we aole
to give them the result OF a IeaI
Investigation? Recently nervy
crook. working on the theory that the
telIers would not take time to have
checks looked up, endeavored to cash
many worthless checks on several
banks Bankers were not given quick
information of this action. save
through the daily press the next day.
A bureau could do that publicity work
Immediately to each bank ana put
The bureau could investigate any
enterprise. investigate borrowers
statements and do ii without divulg-
ing source of information through the
use of numbers identifying each bank.
Financial statements should be ob-
tanned from all borrowers of $4,000
and over"
Mr. Amick then referred to r. p.
Andrews paper at the last convention
urging cooperation with the credit
bureau of tie Merchants Association,
and approved of the suggestions.
"The bureau could keep up infor-
nation of paper offerings and furnish
statistical figures on local bank ac-
Invites. 1t could compile ana NAN
tain a list of undesirable borrowers,
not with the idea of furnishing II to
the banks, bat each applicant could be
checked and report made without ref
erence to the bank reporting The
party deliberately responsible Tor dis-
Recently man of considerable wealth
indorsed a note OF a VIGOROUSLY worth
less individual, for ten dollars. The bank
was offered the note.
1.-THE bank called the indorser and
was ordered to pay the money, which
- hn "a Later.
the cashier, knowing the indorser to
be perfectly good, failed to protest
the note and saved the man $3.50.
When informed OF the saving. the IN
dorser exclaimed oh, well. that lets
me out This man has since cost
his creditors 500. 000."
Mr.. Amick urged that the position
of secretary of the association and
manager of a credit bureau might
well be combined. paid secretary
A convention. He urged that the
cost of the bureau should not be con-
sidered as one more item of expense
but as insurance against future losses.
He declared that bad checks are re-
sponsible for the loss OF thirty mil
lions a year.
"The Handling of Transit Depart
ment." This subject was handled by
r. A. Cissell OF the Commercial Ma
tional Bank. He said. in part:
I'VE have all, more or less looked
upon the rediscounting possibilities of
the federal reserve system as the only
redeeEiing feature of the plan and, If
not redscounting, considered the loss
in our earnings through being com
PEELED to keep such a large, part of
our funds there unemployed in our
berefit."
The speaker reviewed at length the
good features of the collection system
of the Federal Reserve Board and the
objections of some banks to the sys-
tenn because of loss of exchange
charges and proceeded to a technical
discussion of routing of checks in
transit to federal reserve banks and
through various branch banks and the
profit to be made by anaiyzing this
source of profit and showing the direct
loss through bad routing. He closed by
referring to the collection through the !
federal reserve banks during 1919 of
s136.00o. 100000 in checks in one-haif
of the time required by old methods.
Foreign Exchange.
George H. Mckee of the Riggs
National Bank read a very interesting
paper on this subject. showing the
present day methods Of handling this
business. now become larger with
each day and more interesting also
the gradual recovery of price
levels from the low point of the war
period.
The Collection Department.
B. S. Bowles of the Potomac Savings
Bank handled this subject. He pre-
a large number Of forms show
ing modern methods of handling col
lections and some not so up to date,
all of which were critically inspected.
He also offered "a large amount xsf !
technical Information sug-
costing forms for all manner of con-
ditions to be met in banking in the
special department treated.
Your committee believes that the
depositor's account should be exam
ined and ii II does not justify free coll
lection service that minimum fee Of Is
to Is cents be charged. and If an ex-
change fee Is added out of the city, that,
Many banks lose large amounts OF
money through generous. too generous,
service where. accounts do not warrant
backing up notes be discontinued"
"In conclusion. we urge each bank
to study its forms and strive to bet
ter them, that reasonable charges be
for collections. and that
up notes be discontinued.
Discussion OF Papers.
There was a very general discussion
of the papers in which all present
took part. after which the conven-
ton adjourned for luncheon and an
hour on deck.
Reassembling. Howard Moran. vice.
president of the American Security and
Trust Company, read an able paper on
Value of Borrowers Financial State
ments."
He said in part:
Considering this subject from a
local point Of view, it has been more
than difficult to educate the business
interests to the point of furnishing
such statements from the fact that
among banks has been
SO strong that some OF our bankers
have approached business men and
agreed upon a particular line Of credit
in an effort to obtain their business
cial responsibility of the borrower
other than obtaining reports from
agencies. This informa-
ton is helpful but credit should not
be given on such reports. Most of
the banks in the District are now
requiring statements and are more
careful in giving credit.
1.-THE adoption by the D. B. A. of a
uniform statement formula has been
most helpful in educating the public
along this line and has aided the
banker in obtaining state
ments from borrowers because where
concerted action has been taken it is
easier to convince the business man
of the need for giving the informa-
ton.
THE value Of these statements will
be more and more apparent to all
banks II they will insist upon them
and valuable to the business man
making the statement, as the banker
may show him defects in bookkeep-
ing and give him advice that will en-
able him to better handle his finan-
cial affairs. Borrowers must UNDER
stand that bankers treat their state
ments in confidence. as their main
objections to furnishing the state
ments has been the belief that the
information might be released to bust
ness competitors. It is we'll to be