The use of printed or mimeographed letters for this purpose is usually to be condemned, because these are likely to suggest to the debtor that tardiness in the payment of accounts is of frequent occurrence among customers of the house—the very impression to be avoided. Tho form paragraphs and standard letters are often used, each letter should be written separately and be made to fit the occasion, for this procedure conveys the impression that the occurrence is unusual and that the matter is regarded by the creditor as de cidedly important.
If the first letter fails to bring a prompt reply, a second should be sent immediately. The second let ter, while still confident in tone, should express sur prise at the debtor's continued silence, and may prop erly inquire whether misfortune of any kind has over taken him. It may even, in evidence of the creditor's confidence, express readiness to render financial as sistance, if such is needed.
In each case, circumstances will necessarily deter mine, to a large extent, the kind of letter to send the delinquent. All such letters, however, should have this in common: they should invariably make clear the credit man's insistence on being informed of the ac tual cause of the non-payment of a past-due account. Needless to say, such letters should invariably be courteous in tone and even sympathetic in expression, in order that they may invite the confidence of the debtor.
Possibly, however, the first letter brings a request for an extension, and gives what appears to be good reason for the debtor's present tardiness. If this re quest is granted, a definite payment date should be set and there should be an understanding that no further extension is to be asked. At times it is better to grant even a little longer extension than the delinquent asks for, since by such generosity the cred itor emphasizes both his anxiety to accommodate his customer, and his expectation of receiving payment promptly upon the new date granted.
5. Letter teith a notice of a draft.—If, how ever, the credit man's first letter fails to bring a prompt answer a second letter should be sent without delay. This letter may contain notice of the inten tion to draw upon the creditor for the amount due, and fix a date when this is to be done. The date is set just far enough ahead to permit an answer to be received by mail. Unless before that time the debtor remits or writes, the draft goes forward as announced, payable to the debtor's bank (if known).
There was a time when to dishonor a draft was vir tually to declare oneself insolvent. Such is no longer the case, and little is thought nowadays by the average dealer of returning a draft unpaid. Nevertheless,
the draft, even tho it may not bring the money, usually elicits some expression from the debtor as to his posi tion or his intentions, and thereby gives the credit man a valuable clue to the course he should follow in order to effect a collection of the account as speedily as possible. The draft is frequently the means of inducing a delinquent to pay, for he naturally does not wish the bank to learn of his delinquency.
Some credit men prefer to send the draft to an other bank in the debtor's town, on the principle that the stranger-bank will be more prompt than the debt or's own bank in presenting the draft for payment. It is doubtful whether this advantage is a real one.
Formerly banks received and presented drafts free of charge, but since the largely increased use of drafts in the collection of accounts has made this service in creasingly burdensome, banks now usually require a small fee for their services. At a cost of ten, fifteen or twenty-five cents, drafts may be sent to the debtor's bank for 'prompt presentation and for return, with notice of reason for non-payment when the debtor fails to honor the draft. On sending a draft to the bank for collection, it is advisable to inform the debtor that the draft is under way, so that he may have an opportunity to provide the necessary funds before the draft is presented by the bank.
6. When the draft is ignored.—Frequently a draft will be returned with the notation, "No attention," in dicating that altho the bank gave clue notice to the debtor that it held a draft against him, the latter ig nored the bank's request that he honor it. In that case, another letter should at once be sent. Possibly also another draft may be presented thru another bank; if this is done, the letter courteously assumes that notice of the former draft was not received by the debtor in time for him to take up the matter with the hank, for which reason another opportunity is to be given him. Such a letter might read as follows: Dear Sir: The Fourth National Bank of your city has returned to us our draft on you, dated April '25, for $---. The bank's notation indicates that altho you received due notice of the draft, no attention appears to have been paid to the matter. Inasmuch as we took pains to inquire in advance what your wishes were with regard to the draft, we necessarily assumed, since you did not notify us to the contrary, that you would honor the draft on presentation. Had you definitely indi cated your preference as to manner of payment, we should, of course, have been glad to respect your wishes.