consistent progress is to be noted from the very inception of the enterprise. To be sure, it is still far from having attained completeness and perfection, but if the future growth is to be judged by the progress made heretofore, the prospects are exceptionally bright.

Cost of Credit Interchange Service. To purchase a membership in a Credit Interchange Bureau, a certain minimum number of reports must be subscribed for. The sum paid for these, as well as additional reports, varies with different bureaus. Some charge a flat rate of $1 per report; others employ a sliding scale, on the theory that the work is carried on on a decreasing cost basis, hence the larger the initial number of reports subscribed for the smaller the charge per unit. The tendency, however, is toward the adoption of a uniform charge of $1 per report. In this connection it should be observed that, notwithstanding the charge of $1 per report, the actual cost is considerably reduced by the large number of free reciprocal reports furnished members by the bureau, so that in many instances the real cost may not exceed 10 cents each, a feature offering no inconsiderable inducement to the sophisticated credit manager.

TRADE CREDIT BUREAUS

Types of Trade Bureaus. Various trade associations and boards of trade have established their own credit bureaus. These are operated and managed in conjunction with the organization to which they form an adjunct. Thus, there is a Millinery Jobbers' Association Credit Bureau serving only one group of middlemen in a single trade; a Lumbermen's Credit Association operated as a special interchange bureau for lumbermen; and many others of similar composition. The purpose of these organizations is essentially the same as that for which bureaus have been founded by local Credit Men's Associations, namely, to facilitate the exchange of information among credit grantors and to aid their members in guarding against extending accommodations to parties unworthy of credit.

From the standpoint of methods employed in conveying information to members, all trade bureaus may be divided into two classes, although many minor gradations will be revealed. upon closer analysis. One group merely furnishes the inquiring. member the names of concerns dealing with the risk for his

own independent investigation. The other class of bureaus conducts the investigation and renders complete reports.

Incomplete System.-A bureau operating under this plan requires all of its members to register the names and addresses of all their customers. Each member is identified by a symbol, usually consisting of a number. A key containing the names of the members with their respective numbers is subsequently made up and distributed among the members. The symbols of members dealing with a given risk are thereupon recorded on a card made out for the purpose and kept up to date by noting all changes in trade connections. Upon receipt of an inquiry either by telephone or by correspondence, the office consults the customer's card, and informs the inquirer of the codes of all members known to have dealings with the risk. Simultaneously, the inquirer's number is added to the customer's card, if not already there, for by this mode the file is kept up to date.

To complete the investigation, the inquiring member ascertains by means of the key in his possession the names of the houses doing business with the risk. The credit manager may then, at his discretion, resort to one of several means at his disposal. He may personally call upon the respective concerns; he may have a credit department investigator visit them; or, finally, he may communicate with them by means of the telephone or through correspondence.

Complete System.-A bureau operating under this plan follows methods and processes somewhat analogous to those employed by the Credit Interchange Bureau system of the National Association of Credit Men. Members are identified by symbols, a key is made up, a complete list of customers is required of each member, and a card is made for each customer and filed alphabetically in the customers' card file. From this point on, however, slight differences in method of operation are to be noted. In the first place, the card contains not only the symbols of members doing business with the risk, for all pertinent facts needed for a complete written report are recorded thereon. All inquiries received during the day are assembled and classified according to members dealing with the subject inquired upon. Lists are then made up, one for each member affected, bearing the names of all his customers about whom inquiries for information have been received during the day. Some bureaus list daily all the names to be investigated during

the day on a single sheet, and send a copy of that sheet to each member. This method is practical with only a limited membership. Each member indicates on the list opposite the proper name his experience with that customer, and upon returning these sheets to the office, the data is tabulated and a report is compiled and sent to the inquiring party. Each contributing member is also entitled to a gratuitous report. Many of the bureaus organized in recent years, however, follow in practically all details the methods pursued by the Credit Interchange system of the National Association of Credit Men (see Figs. 26 and 27).

NOTE-Do not fold. Return in our addressed envelope furnished you. FIG. 26.-Information blank used by trade credit bureaus.

Advantages of Trade Bureaus.-There is apparently nothing to recommend trade bureaus operating under the incomplete system, save its cheapness. But the value received is no greater, proportionally, than the amount paid for it. For the trade organizations operating under the complete report plan, however, many praises are sung by its adherents. Reference to Fig. 27 will at once reveal the principal, and perhaps only, reason for their success. Obviously, different trades are interested in different items, largely depending upon the peculiar practices characteristic of the respective lines of business. A millinery jobber, for instance, in analyzing a report, lays chief emphasis on re

turned merchandise and seasonal variations in purchases, whereas in other trades the emphasis may be shifted to modes of settlement, whether by promissory notes, drafts, and the like. It is the special type of information that generally appeals strongly to various trades, although on many occasions little difference is to be discovered between trade bureau reports and those issued by Credit Interchange offices of Credit Men's Associations.

Limitations of Trade Bureaus.-These organizations often restrict their field of operation to a single class of persons or firms, such as jobbers or manufacturers exclusively, or else limit their activities territorially. In either of these cases, they are considerably handicapped in the compilation of reports, which are of necessity incomplete and, consequently, fail to reflect accurately the customer's standing. Furthermore, trade credit bureaus are at best limited to a single line of business. So long as exclusive trade shops are under investigation, so long are the results likely to prove satisfactory. When an investigation pertaining to a store handling several distinct lines of merchandise is conducted, however, obviously the information secured from only one group of sellers is totally inadequate as a basis for a credit decision.

SELECTED REFERENCES

ETTINGER, R. P., and GOLIEB, D. E.: "Credits and Collections," pp. 128-141. MCADOW, F. H.: "Mercantile Credits," pp. 64–71.