141. Personal Investigation

The credit man should supplement the information contained in the statement and collateral thereto, by personal investigation. He should call at the factory, look over the plant, machinery and stock, and form his own opinion of its value and appropriateness to the business. If he has the time, and it will be time well spent, he should check the statement received with the general ledger. This is a detail that is probably never carried into execution, but if the credit man is familiar with accounting it will certainly be worth his while to do so. In addition to the borrower's own statements and records, the credit man should seek the opinions of others, being careful to obtain his information through such channels and in such a manner that the credit of the borrower will not be injured by his questioning. Rumors may start regarding the credit of a worthy man from the simplest remark that may finally lead to his bankruptcy.

142. Agency Reports

Although agency reports are not perfect, they are the best that can be obtained and are helps in determining credits. Every bank of any size should be able to command the forces of these agencies for its information. The information contained in a rate book should always be supplemented by personal investigation.

When all this information has been brought together, a report should be prepared and adjusted for the officers, which is concise, and yet omitting none of the essential facts. The credit man gathers the information and really decides the question as to whether or not a man's application shall be granted. He may be made the scape-goat for a careless officer, and it therefore behooves him to put his information in such shape that it cannot be mistaken.

143. Credit Files

The files of the credit department should be fireproof, and should be capable of expansion as the bank grows. There should be a file for each borrower. Most banks use manila envelopes marked on the outside with the borrower's name. The borrower's statement and all other memoranda are filed in the envelope. Some banks keep a running record of the average balance and the loans on the outside of the envelope, as shown in Figure 114 on page 244. This information is so valuable that it is worthy of a separate record. Cards are very acceptable records for this information. A stock card sold by the Library Bureau, four by six inches in size, is shown in Figure 115 on page 245. An additional file of condensed information as per card shown in Figure 116 on page 246 may prove to be useful.

B.

D.

Stm't

Net

Introduced By References

Figure 114. Credit Envelope With Record Of Borrowings.

Figure 115. Average Balance And Discount Card.

Library Bureau, A6824

Credits and statements

Name Liquidating Date

Location Business

Officers and Partners

Guarantors Last Statement

Figure 116. Credit And Statement Card.