2. "Impressions," which deal with tendencies or rumors. If, for example, a certain dealer is believed to have become lax in his payment habits, or to be dividing his attention between his business and out side ventures, or if his personal habits are said to have become irregular, the matter is reported as being im portant from the agencies' point of view.
3. Special reports prepared upon the request of a subscriber, or for the purpose of completing the agencies' files.
If a district office desires a special report on a dealer who lives outside its immediate territory, the nearest sub-office" in the dealer's locality is notified, and the reporter is set to work gathering the information upon which the report is to be based. Copies of such re ports are usually distributed among district offices in anticipation of requests for them on the part of sub scribers.
4. Dun's and Bradstreet's rating books.—Next let us ask: By what means does the mercantile agency distribute to its customers or subscribers the credit information which it gathers? One way in which this information is made accessible to merchants and manu facturers is thru periodically issued rating books. These books, which are revised quarterly, contain the name and address of practically every person engaged in business in the United States and Canada. Two ratings are given—a capital rating and a credit rat ing. The capital rating is intended to show how much capital is invested in the business, tho it is generally understood to mean "the commercial value or the par value of the assets which the firm rated may be con sidered to have in its business, all things regarding the terms and the business being taken into considera tion." The credit rating expresses the agency's opinion with regard to the degree of confidence to which the firm is entitled. In order to determine the latter, the character and ability of the dealer or firm are considered in connection with the amount of capi tal invested in the business.
It is not to be expected, of course, that these ratings should in every case be in perfect accord with actual conditions. It must be remembered that the agency has no means of compelling the dealer to give out in formation about himself or about his business. If he is unwilling to furnish such information, the agency is compelled to gather it from other sources as best it may. Moreover, inasmuch as about three thousand
changes occur daily in the credit ratings of the country, it is readily seen that the rating book must contain a large number of errors even on the very day of its pub lication. For all that, however, the ratings given by the large commercial agencies are on the whole re markably exact.
5. Special credit reports.—The mercantile agencies usually seek to obtain from every dealer a property statement or its equivalent as a basis for the informa tion to be kept in their files, adding to the information thus obtained such other data as its local reporters may from time to time obtain. From this informa tion special reports are prepared for subscribers at their request. These reports include a record of the 1 dealer's business and personal character, his wealth in and out of business, his debts, his associations and his reputation. They contain, also, a description of the business itself—capital, debts, outstanding ac counts, the volume of annual business and frequently the names of the chief creditors. In a concluding statement, the agency offers its judgment with regard to the worth, credit limit and other factors bearing upon the credit risk involved.
As a general rule, the information on file in the agency's office is revised only twice a year. But since many things may happen within six months to change materially the dealer's financial condition, the cau tious credit man will usually seek corroborative evi dence regarding the customer's credit title before act ing upon the information contained in the agency re port. Mention has already been made of such cor roborative evidence in the form of bank and attorney reports. In another chapter we shall consider still another form of such evidence.
6. Trade reviews and market an other way the large mercantile agency serves the business community—namely, by means of a weekly review of trade conditions and of current market quo tations. Business men regard this weekly review as one of the most authoritative opinions obtainable, on trade and on financial and industrial conditions gen erally. As an aid in gauging the current credit con dition of the country correctly this feature of mercan tile agency service is of no small value.