One of the most valuable parts of a banker's education is to learn
whom to trust. Every bank should have a well-organised and thoroughly
equipped credit department, in charge of some one who can be relied
upon to investigate carefully all names referred to him by the
officers. A banker has the right to expect the fullest confidence on
the part of the borrower, and the borrower should furnish him with a
complete and detailed statement of the condition of his affairs. It is
safe to conclude that when a borrower refuses absolutely to give any
information as to his financial condition his credit is not in the
most favourable shape.
Many of the banks have blank forms which they, from time to time, ask
borrowers to fill out. These statements show in detail the assets and
liabilities of the firm in question; they show the notes which are
outstanding, the mortgages on real estate, and many other particulars,
including the personal or individual credit of members of the firm, if
a partnership.
In estimating the value of paper offered for discount the following
points should be considered: