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log with no intention of buying and to treat the writer accordingly, call for almost occult powers. The president of one of the large machinery companies putting out a cement mixer selling at $850.00, relates that one of the company travelers visited Detroit in response to an apparently good lead and found a twelve-year-old boy wanted a dozen cement mixers “to go into the mailorder business with.” Some companies putting out expensive catalogs write a letter asking a doubtful inquirer to fill out an information blank before sending a catalog. The correct interpretation of the personality of a writer means the saving of dollars of expenditure as well as the ability to write him correctly. In a fire insurance concern employing hundreds of agents it would be easy for a manager to inform himself through his special agents as to each agent's nationality, education, experience in the business, etc., and vary his correspondence accordingly, while a mail-order house might have no means of judging a man but by his bare letter.

Form Letters.-A form .etter is one of a series of letters, to be sent on similar occasions. Such letters are usually in imitation typewriting with blanks left for the name of the party addressed, and when carefully executed are a close imitation of a typewritten letter. Form letters vary from those not to be distinguished from actual typewriting, to the stock letters of collection agencies, in which no attempt is made to imi. tate the machine. Some writers use a number of short forms or inserts which they use in dictating to avoid a repetition of dictation.

Letters of Recommendation,-The promiscuous writing of letters of recommendation has done much to cheapen the effect of recommends. Many firms refuse such letters entirely. Perhaps the best plan is to have an employé, when leaving, use his former employer's name as a reference.

CREDITS The science of credits is not an exact one and not one to which the same rules are applicable at all times and for all lines of business. The endeavor of the credit

man is to keep his losses as near the zero point as possible without needlessly limiting sales.

Knowledge Necessary to Credit Man. The credit man of a house selling a line of goods over an extended territory should have a complete knowledge of the several phases of business minutely associated with exten. sion of credits.

General Financial Conditions. The condition of a territory as regards money is important. A comparatively small area may be experiencing business depression because of continued wet weather, extension of a new railroad cutting off trade, crop failure, or similar causes, while other territory in the same locality is enjoying phenomenal prosperity. Some towns in local option districts enjoy good trade at certain times only, depending on the predominance of the “wet” or the “dry" faction. No condition affecting financial conditions is too small to aid in determining the financial future of a district.

Business Detail.—The cost of production, amount of stock on hand, and in fact all the operative details of his own business should be thoroughly understood by the credit man. The more complete his knowledge is of the details of his firm's business, the better he will be able to judge wisely in putting out goods.

Knowledge of Customer's Business.-In order to grant credits intelligently, a credit man should know how the customer's stock balances, and what per cent he is selling him. A buyer running a general store may be rated good for $15,000, and yet $1,000 worth of a certain line of goods may be in excess of his credit and out of proportion to the remainder of his stock.

Knowledge of Finance and Law.-In judging the relation of incoming money to the financial strength and policy of his house, the credit man should know something of finance, while a knowledge of the law of credits, collections, exemptions, bankruptcy and allied subjects is of vital importance.

SOURCES OF CREDIT INFORMATION. To bring the making of credits down to a systematic and scientific basis there are four sources from which the credit man may draw: Mercantile agencies, re. ports from the trade, reports from the salesmen, reports from local banks or attorneys. COLLECTIONS In collections the main thing is to get the money when due. This is more than it seems on the face of the statement. The ideal condition will never be reached when each customer pays his account when due, asking and expecting no favors.

Mercantile Agencies.—The report of a mercantile agency is the basis from which a credit man can work, all additional information qualifying the report given him. His past experience must determine its degree of accuracy and to what extent a report is to be absolutely relied upon. The effect upon the merchant of the existence and supervision of the agency, is a salutary one, giving an extra incentive to keep his commercial record clean.

Trade Information.-By exchanging information with other credit men in the same or allied lines of trade, many problems in credits may be simplified. Such information, however, has the disadvantage of being slow to secure, as a merchant's creditors may be widely separated.

Salesmen's Reports.-Information from salesmen, under ordinary conditions, is peculiarly valuable. The salesman is posted as is no one else by frequent visits, knows the buyer's strong and weak points, the general condition of trade in the town and surrounding coun. try, and if shrewd, can intuitively sense the moral hazard of an account from actual contact with all the conditions surrounding it. If a salesman reports his opinion of each risk assumed by the house it does not take long to tell the value of his observations and whether he possesses the capacity for giving a dependable rating.

Local Sources.-Information obtained from local sources is open to various faults, partiality or hostility to the one reported on or indifference to the correctness of the report, being among the number. Banks often take the attitude that they are not called upon to make a report, particularly upon a customer not a depositor and of whom they have no accurate knowledge other than of a general nature. Attorneys' reports are of all kinds, frequently carelessly irresponsible, the ordinary attorney not being an accurate judge of the financial condition of a business man.

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Prompt Payments.-Customers can be educated to the fact that payments are to be met unconditionally at maturity of account. Prompt payment of bills is no more to ask of a customer than is the prompt delivery of goods ordered by him. The country trade often takes this stand: “We buy of your house. They should consider it a favor to get our trade. Hence, if we desire to wait a few days in the payment of a certain bill, the house should not hurry us, as one overdue account cannot make any difference to them.” This stand would be comparatively reasonable if the credit man could know, first, the exact condition of the business affairs of the debtor; second, that he desired a reasonable extension, and was not simply ignoring communications with a view of not giving them a square deal. As collections are made, this tendency must be combated and overcome, and those customers habitually making such an excuse must be educated otherwise.

Rendering Statements.—Statements should be rendered at the time the account matures, not the first and the fifteen of each month. Then the statement as sent means something decisive-"remittance expected.”

Sight Draft.—The efficacy of a sight draft as a means of collection except in small towns or country neighborhoods where a bank holds up merchants close to the credit line, is fast growing less. There was a time when the return of a draft meant impairment of credit for the debtor, but that does not now always hold, particularly when the draft is drawn through a bank other than the one at which the drawee does business. It aids to no small degree to send drafts through the bank at which the debtor has his deposit. If he has not the money to take up the draft he cannot give an evasive request for return, the notification is much more liable to be, "Wants extension, will write.” Some houses have a rule to draw through the First National Bank, if there be one. This is not to be recommended, as both the bank and the customer will be better pleased and result be much more satisfactory if the bank at which the customer is a depositor is used.

Letters Following a Draft.-When a draft has been refused payment, if the customer does not write immediately, a tactful letter from the house should go forth. This should not be a collection letter demanding immediate payment, or worst of all, a form letter, but a heart to heart letter, asking why payment has been delayed.

SPECIFIC APPLICATION. Collections vary so much in character, size and surrounding conditions that anything like a general rule cannot be prescribed. Classified as to size, the following methods may be considered representative:

Under Ten Dollars.—Where one or a number of small collections are outstanding, a statement is first sent to each debtor, followed in five days by a personal letter, either with or without notice of draft to be drawn in a specified time. After draft is drawn and refused send collection to Justice of the Peace if delinquent lives in small town or in the country. Justices of the Peace commonly are very thorough in their collection methods, are usually well acquainted in their district and rarely if ever misappropriate funds, while their charge is nominal, often being but 10 per cent, where an attorney would charge several times that sum. Banks often effect small collections, but seldom do more than notify the delinquent. Bank charges on a collection are uniformly reasonable. Collection agencies using the "letter system" should be used sparingly if the trade of the delinquent is a consideration. The “letter system,” in which a series of letters threatening suit, attachment, and the like are mailed the delinquent, are peculiarly effective for a list of country collections, the cost averaging probably 50 per cent. Small collections not closed off by the above method may be considered practically worthless. Where trade is to be retained, tactful personal letters following a statement are best.

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