In some instances these associations, thru assess ment of their members, provide the necessary funds for the maintenance of a local office and for the em ployment of a secretary-in-charge. In other in stances, the associations are private enterprises main tained for profit, local merchants being admitted to membership upon payment of an annual fee.
In the larger cities, such associations do not usually include merchants of more than one line of business, tho merchants of closely allied lines are generally ad mitted to the same association. In smaller cities the associations may include not only merchants of every kind but professional men, bankers, real estate agents, insurance agents, loan agents and others.
10. Two systems commonly em ployed by retail credit bureaus are of two kinds. One is what is sometimes called the "affirmative-negative" system; the other, the "negative." The name of the first indicates that the bureau collects and records in formation of every kind, both favorable and unfavor able, that has any bearing upon the credit-standing of a customer.. The negative system concerns itself solely with credit information of an unfavorable na ture. The latter system, tho possessing certain defier ite advantages, notably the saving of time and labor, has this disadvantage, that its records really consti tute a "black list," whereas there is not always abso lute certainty that a person listed as "bad pay" really deserves such designation.
The negative system has the further disadvantage that it does not make room for that large class of cus tomers who, altho never prompt in paying their bills. eventually pay them—some taking longer time than others. In what is known as an aflirmative-negative system, room is left for suitably designating such cus tomers without having to class them as bad pay. This is clearly of advantage to the merchant, just as it is only fair to the customer.
H. Rating blanks.—In some organizations a re quest for credit information is sent to every newcomer in the community. The request is usually in the form of a letter inelosing a slip upon which are printed spaces for recording name, address, occupation, em ployment, age, etc., and for answering questions, such as "How many in family?" "Do you own real estate?" "Where have you lived before coming here?" "Of what church, if any, are you a member?" "What lodge?" "Of whom did you chiefly buy in your former place of residence?" The letter accompanying the inquiry slip is usually prepared in facsimile typewriting, and is a courteous request for cooperation in the bureau's effort to es tablish the credit reputation of all persons who are in the habit of paying their bills promptly, and thereby to protect local merchants against those who do not pay their bills.
Failure to comply with this request for informa tion is by no means to be regarded as proof that the person has something to conceal or as indicating that he is undesirable as a credit customer. However, such failure suggests that the person should be vis ited by a representative of the credit bureau and that the aim and object of the bureau should be care fully explained, at the same time that information about the newcomer is sought first-hand.
12. A typical credit bureau.—In a certain city in Ohio an organization of grocers, numbering over five hundred, maintains a reciprocal credit information bureau. The operation of the bureau is as follows: Each participating member files with the secretary of the association the names of all his customers, to gether with such information as he may possess relat ing to their credit-standing. This information cov ers, as far as possible, the value of each customer's possessions. It also states the highest amount of credit thus far allowed him. Furthermore, it in cludes, whenever possible, an estimate of his moral character, his earning capacity, his habits and his at titude toward paying his debts. The report covers a wide range of information, often embracing the amount of fire insurance carried by the customer, and at times even including the social aspirations of his wife, and the ability of the family to live within their regular income.
This information, when it is received at the bureau, is entered upon cards and arranged by the secretary for ready reference. Upon application from a mem ber, the secretary answers such questions relating to the customer's credit-standing as may be answered from the information at hand.