It is not to be denied that an attorney report, if carefully prepared, contains information not easily obtained from any other source. As a sample of the character and amount of information sought by means of a free report a form commonly used for that pur pose is shown in these pages. As may be judged from the nature of the questions, the preparation of the re port requires the expenditure of considerable time and labor. It is easily understood that the attorney who receives in his morning's mail from six to twelve such inquiries is not likely to look upon the free-report system with special favor. Accordingly, in most in stances only such questions are answered as may be answered offhand. Frequently indeed the inquiry goes into the wastebasket unanswered.
For the purpose of comparison, another form of attorney report is presented, with which the sender incloses one dollar as compensation for the attorney's services. It is easy enough to say upon which of these reports the attorney looks with greater favor; it is equally easy to determine in advance which of them will be of greater value when returned to the inquirer.
Opinions differ among the larger houses of the country regarding the value of attorney reports. Some firms make extensive use of such reports, others use them only occasionally.
14. Banks as sources of credit information.—Sup plementing the local attorney as a source of credit in formation, the local bank renders a similar service of ,value to the business world. These institutions in the course of their daily business acquire a wealth of re liable information touching the financial condition, the business and social standing of local merchants and of other business men in their town.
The bank's attitude toward the commercial world • differs somewhat from that of the commercial attor ney, inasmuch as the bank may have an interest in the affairs of a local merchant just as great as that of the distant wholesaler who is applying for information.
If the merchant in question is a borrower at the bank, the bank is necessarily anxious that nothing should take place that might endanger the borrower's ability to repay his loan.
It should always be remembered that banks are not usually so well acquainted with a local dealer's condition as is the latter's jobber, since the banks, owing to the greater caution generally exercised by them, usually demand security for their loans, while the jobber or merchandise creditor exacts no security. Accordingly, the jobbers or wholesalers are compelled to exercise closer supervision over the account, hence their experience with a debtor is likely to be of greater value as affording more dependable credit informa tion than the opinion of the bank which holds the debtor's security for its loan.
For this reason among others, many large houses rarely make use of banks as sources of credit informa tion. Others do so only under certain circumstances, as when the customer himself gives the bank as refer ence. Still others are inclined, even under these con ditions, to discount the value of the bank's report, un less, as expressed by one credit manager, "the informa tion is secured for us by our own bank." The last statement carries its own suggestion, tho we do not maintain that the statement is in every sense fair to the banks.
Banks have been accused of undue delay in an swering inquiries for credit information, and this de lay has been advanced as an objection to the use of banks in this capacity. We are inclined to think that this charge could not be uniformly sustained, since banking institutions as a rule are models of efficiency.