The manufacturer begins to see a thriving business on a cash basis
without exposing his weakness, and agrees to allow the banker to
discount his bills.
"In the morning," begins the agent in explanation of his system,
"you send us $1,000 worth of duplicate invoices of the goods which
you shipped today, with shipping bills attached. You attach to the
invoices a note for $1,000, so the account may be kept from the notes,
and not from the invoices which we hold. In return for the note we
will send you a check for $800, less our commission of 2 per cent
a month, just what you are paying now because your business is not
done on a cash basis. The $200, or 20 per cent, we have to deposit in
the bank which loans us the money which we in turn pass to you. When
any bills are paid we will refund your 20 per cent which we hold.
Any bank compels us to have a representative in your store to look
after our interests, as a matter of form. We will just appoint your
bookkeeper--a matter of form entirely. Once a month we will send a man
over to check up your books. He will see that none of our money has
been overlooked."