The most severe test of a manager's ability and soundness of judgment is found in the writing of a letter of application. The reasons for recommending the loan should be concisely stated and no pertinent fact omitted. In other words, the head office should never have occasion to write back for further information or missing particulars.

A separate letter should, of course, be written for each account, and the condition of the liability and security at the moment of writing should be set forth at the head. The letter should further give a concise statement of:

(a) The amount of credit applied for;

(b) The purpose for which the advances are to be used;

(c) When the advance will be required;

(d) When and from what source payment is expected.

Give full Name or Names of Partners, Age, Business and Residence.

....................................Branch

STATEMENT OF THE AFFAIRS OF

as at 19

Item No.

Assets

Per cent deducted in Mgr's valuations

Liabilities

Sales for past year $

Losses " $

Insurance on Liquid Assets 8

" on Fixed Assets $___

Real Estate Searched

Manager's Abstract Of Above, With His Valuation Of Assets

Liquid Assets:

Cash, Bills Receivable and Accounts

Floating Liabilities:

To Bank Accounts Payable

Bills Payable

Merchandise held for

Sale

To Sundry Parties

Miscellaneous movable property

Fixed Assets:

Mortgage Debts: Surplus

Liability as Endorser or Guarantor not included above, namely on: -

Trade Paper in Customer's Account $

On other Accounts at

Branch $

On other Accounts elsewhere $

Figure 39 244

Name of customer._________.____________.

Comparison Between Accompanying Statement And Last Previous Statement

As per

Last previous

Statement

Dated

___19___

As per

Present

Statement

Dated

19

Increase

Decrease

Liquid Assets:

Dash, Rills Receivable and Accounts

Merchandise held for Sale

Total Liquid Assets

Net

Net

Fixed Assets:

Mortgages and other Investments

Chattels and other Dormant Assets

Premises and Stationary Plant,

Other Real Estate, unencumbered

Other Real Estate, encumbered

Total Fixed Assets

Net

Net

"Total Assets

Decrease

Increase

Floating Liabilities:

To Rank Accounts Payable

Bills Payable

To Sundry Parties

Total Floating Liabilities

Net

Net

Mortgage Debts:

Total Mortgage Debts

Net

Net

Total Liabilities

Surplus:

Increase - Decrease in Liquid Assets___________________$

Increase - Decrease in Floating Liabilities________.___________________________________

Increase - Decrease in Liquid Surplus__________________$

Increase - Decrease in Fixed Assets____________$

Increase - Decrease in Mortgage Debts_______________________________________________

Increase - Decrease in Total Surplus___________________$

19

19

19

19

19

19

Liquid Assets

Floating Liabilities

Liquid Surplus

Fixed Assets

'Mortgage Debts

Fixed Surplus

Total Surplus

Figure 40 245

Sometimes preliminary letters may have been written giving information on some of these points, but the final letter should nevertheless contain full particulars, and reference to previous letters or statements should not be made merely to save the trouble of repeating information, except in special and involved cases. It is much more economical in time and labor for a branch manager to set forth the case fully, rather than to put the head office to the trouble and delay of looking up references.

The reasons leading to the recommendation and any criticism of the account should be carefully and systematically assembled and the information set out in due order and sequence, each subject being discussed in a separate clause, and all to be said on a particular subject brought together in one place as far as possible. This can only be accomplished, as a rule, by the letter being first drafted and carefully corrected before it is written. If the application is from a new customer the cause of the change in his bank account should be reported, and if the application is for a line of trade paper a list of the trade bills under discount with his previous bank should accompany the letter.

If these simple requirements are carefully complied with, the head office will be in a position to accord a prompt authorization or otherwise of the application.