Appendix B: Report of Committee on Credit Forms

APPENDIX B REPORT OF COMMITTEE ON CREDIT FORMS1 MADE TO THE AMERICAN BANKERS' ASSOCIATION AT ATLANTIC CITY, N. J., SEPTEMBER 28, 1917 Your Committee on Credit Forms practically completed its labors when the three specimen forms were submitted to the membership of the Association through the medium of the Journal Bulletin. A final report has been withheld until this time, that the committee might have the benefit of any constructive criticism offered, and it is pleased to state that several suggestions have been received which it has adopted and included in the amended and improved forms which are submitted as a part of this report. The committee desires to make special mention for the suggestion of two items, "a condensed statement of profit and loss account for the past fiscal year" and "a reconcilement of the net worth or surplus" which was recommended by the Executive Committee of the Clearing House Section.

As stated in the preliminary report made to the Executive Council some months ago, your committee has conducted an exhaustive investigation into the different forms now used in the various lines of business and in many different sections of the country, with the conclusion that a universal standardization of forms is practically an impossibility. Certain fundamental principles were embodied in the forms 1 Journal of the American Bankers' Association, Vol. 10, No. 5, Nov., 1917, pp. 351-356. 356 APPENDIX B 357 we examined and with these ideas as a basis, three different forms have been prepared which your committee believes are sufficient to cover practically all cases. The first of these forms is for the farmer or individual; the second for the firm or individual engaged in the mercantile or manufacturing business; and the third for the corporation engaged in mercantile and manufacturing lines.

In compiling these forms, it has been the aim of the committee to elicit all the information necessary to obtain an intelligent insight into the financial and other conditions of the individual or business under consideration and at the same time to make its questions as brief and simple as possible. Your committee has received voluntary suggestions in such large numbers as to show conclusively the work had enlisted the interest of many of your members, and while some of the suggestions offered were impracticable, others have been found to be of extraordinary merit. The one predominating idea, however, coming from banks both large and small, was for brevity and simplicity in the forms to be adopted. This demand has caused the committee to eliminate a number of ideas of its own and to reject suggestions coming fro¿n others which contain considerable merit. Your coínmittee fully realizes that the forms adopted will not meet the need of every bank or banker in this great country where local conditions and requirements vary so greatly. It is the belief, however, that the forms submitted will meet the needs of thousands of your members, and that minor changes to meet individual or local needs will make them desirable to practically every bank in this Association.

If the result of our work is adopted by this Association, it is the suggestion of the committee that samples of the forms be printed and placed on file in the General Secretary's office in New York to be furnished to members who desire them for "copy."

358 APPENDIX B Your committee, believing it has now accomplished the end for which it was formed, asks to be discharged. Respectfully submitted, NELSON N. LAMPERT, WM. A. LAW, W. P. SHABEB, CHAIRMAN. The action of the Convention was as follows: President Goebel: Gentlemen, you have heard the most excellent report of this committee. What is your pleasure? Unless there is objection, the report will be received with approval and the committee discharged, as requested, with thanks. The Chair hearing no objection, it is so ordered. Note: All members are privileged to use these forms by having them printed by their local printer, but with the understanding that a notice be printed thereon stating that they are the forms of the Association. The forms referred to in the report of the committee follow on succeeding pages. FORMS DESIGNED AND APPROVED BY THE AMERICAN BANKERS' ASSOCIATION Form No. 1 Farmer Statement of Address To Bank of I make the following statement of all my assets and liabilities as at the close of business on .and give other material Information for the purpose of obtaining advances on notes and bills bearing my signature or indorsement and for obtaining credit generally upon present and future applications. If any change materially reduces my means I will immediately notify the bank.

APPENDIX B 359 (Please answer all questions and fill in all blanks) Assets Liabilities Cash on hand and in bank Accounts and notes owed by meLoans and accounts due to me without security(good) Notes or mortgages owed by meFarm products with real estate as securitylive stock Notes owed by me with chattelFarm land and buildings (see mortgage as securityschedule) Other indebtedness (itemized) ,.Farm implements and machinery .....Other property (itemixed) Total LiabilitiesNetWorth Total. Total Location of Land Owned Acres Estimated Value Assessed at Mortgaged /or Title. The title to all above described real estate is in my name solely, except as follows: Buildings. State general character Contingent Liability as indorser orguarantor $Implements. State general character of Accounts and Notes Payable. (Ifthose listed as assets any are past due state amountsand reasons)Insurance. Fire S Lif e S Other Liens. (If any other liens onWho is beneficiary? assets, state amount and oircum-. stances) I hereby certify that the figures and statements contained on both Bides of this sheet are true and give a correct showing of my financial condition.

Signed this day of 19.. Name Reverse Side of Form No. 1 State character of loans and accounts listed as assets If any leased land used, state acreage, nature, use and terms of rental 360 APPENDIX B (The balance of this space may be used for printing any questions desired to be asked amplifying statement of condition as shown on opposite page.) Form No. 2 Firm or Inàimàvxã, Manufacturer or Merchant Name Business Address To the Bank For the purpose of procuring and maintaining credit from time to time in any form whatsoever with the Bank, for claims and demands against the undersigned, the undersigned submits the following as being a true and accurate statement of financial condition on the day of , 19.. and agree that if any change occurs that materially reduces the means or ability of the undersigned to pay all claims or demands against the undersigned will immediately and without delay notify the Bank; and unless the Bank is so notified, it may continue to rely upon the statement herein as a true and accurate statement of the financial condition of the undersigned.

Assets Liabilities Cash o¤ hand and in bank Due on open accountsAccounts of customers (good) Acceptances:Notes and acceptances of customers (1) Issued in payment for mer-(good) chandiseMerchandise (at cost): (2) Other acceptances(1) Manufactured Notes payable for merchandise(2) Raw material Notes payable to own banks(3) Stock in process Notes sold through brokersDue from partners notes, accounts Notes payable to othersreceivable, etc Money on deposit with usPlant and machinery Other current debts (itemized)Furniture and fixturesHeal estate (value-mortgage en-Debt secured by mortgage—whentered in liabilities) dueOther assets (itemized) Net worth, Reserves Notes receivable and acceptances,discounted or sold with endorsement or guarantee (contingentliability) Total Total.

APPENDIX B 361 Between the date of the above inventory and the present time we have had no serious losses through bad debts or otherwise (except) and our condition to-day is fully as good as set forth by the above figures. Condensed Profit and Loss Statement for Fiscal Year Ending 19... Bxpmte Income Coot of material or merchandise Net sales consumed From investments Actual expense of conducting.... From discounts on purchases business. Including rent, taxes, From other sources—itemize insurance, etc Salary drawn by myself Interest on borrowed money Bad debts charged off. Depreciation charged off Net profits Total Total. Reconcilement of Net Worth Net worth at close of previous fiscal year $ Less charges not applicable to current year S S. Add net profits as above íReverse Side of Form No. 2 Contingent Liability: We have no contingent liability of any kind as endorser or guarantor not noted above (except as follows) Our merchandise is insured for $ Plant, building and machinery $ Life insurance carried for $ Beneficiary None of the accounts or notes receivable included hi the within statement have been assigned, pledged or discounted (except as follows) Neither have any of our other assets been pledged or assigned as collateral for any of our liabilities (except as follows) Our partnership terminates.

362 APPENDIX B We have no interest in any other concern (except—name affiliations and location) There are no suits pending against our firm (except) The form of obligation used in the financing of our business is the plain note of the firm (endorsed by) None of the endorsers guarantee or endorse the paper of other concerns or individuals (except) Outside resources of endorsers are . J commercial paper is 1 .... . , , , , , Our \ acceptances are J¯ placed through (¤81116 broker or brok¯ era) Our books ] [ audited by a certified public accountant The date of last audit was made by. Bank Accounts Lines Granted Under Discount on Statement Date General Partners: Personal worth outside of this business $ ;; ;; ;; ;; ;; ;; s (Please sign firm's name here) By (Partner) Date signed Form No. 3 Corporation Manufacturer or Merchant Name Business Address To the Bank For the purpose of procuring and maintaining credit from time to time in any form whatsoever with the Bank, for APPENDIX B 363 claims and demands against the undersigned, the undersigned submits the following as being a true and accurate statement of its financial condition on the. day of , 19.., and agree that if any change occurs that materially reduces the means or ability of the undersigned to pay all claims or demands against it, the undersigned will immediately and without delay notify the said Bank; and unless the Bank is so notified it may continue to rely upon the statement herein given as a true and accurate statement of the financial condition of the undersigned.

Asset! Liabilities Cash cm hand and in bank Due on open accounts Accounts of customers (good) Acceptances: Notes and acceptances of cos- (1) Issued in payment for mertomers (good) chandise Merchandise (at oost): (2) Other acceptances (1) Manufactured Notes payable for merchandise (2) Raw material Notes payable to own banks. (3) Stock in prooess Notes sold through brokers Notes payable to others Notes and accounts due to us by Money on deposit with us controlled or allied concerns Notes and accounts due by us to Plant and machinery controlled or allied concerns Furniture and fixtures Other current debts (itemi<ed) Real estate (value-mortgage en-Bonded debt—when due tered in liabilities) Capital: Other assets (itemized) Preferred Common Surplus Reserves * Notes receivable and acceptances discounted or sold with endorsement or guarantee (contingent liability) Total Total. Condensed Profit and Loss Statement for Fiscal Year Ending 19 Expense Income Coat of material or merchandise Net sales consumed From investments Actual expense of conducting buai-From discounts on purchases.

ness. Including rent, taxes, in-From other sources (itemize).. surance, etc Salaries paid to officers Interest on borrowed money and bonds Bad debts charged off Depreciation charged off.. Net profits Total Total.

364 APPENDIX B Reconcilement of Surplus Undivided surplus at close of previous fiscal year $ Less charges not applicable to current year $ $. Add not profits as above $• dividend. {5ïï£ïï?}:::::SïSSÎ::::·.·.·.·.·.·.::·.·.:::::::: 5::::: Undivided surplus $ Reverse Side of Form No. 3 Contingent Liability: We have no contingent liability of any kind as endorser or guarantor not noted above (except as follows) Our merchandise is insured for $ Plant, building and machinery $ Life insurance for benefit of Company amounts to $ None of the accounts or notes receivable in the within statement have been assigned, pledged or discounted (except as follows) Neither have any of our other assets been pledged or assigned as collateral for any of our liabilities (except as follows) Our company is incorporated under the laws of the State of We have no interest in any other concern (except—name affiliations and location) There are no suits pending against us (except) The form of obligation used in the financing of our business is our plain note (endorsed by) None of the endorsers guarantee or endorse the paper of other concerns or individuals (except) Outside resources of endorsers are Our f commercial PaPer isl placed through (name broker or brok-[ acceptances are J ers) APPENDIX B 365 Oi hnnks / are no* 1 ^di*^ by a certified public accountant....

1 are J The date of last audit was made by Bank Account! Lines Granted Under Discount on Statement Dot* Principal Creditor! References Officers Directors ..: President Vice-Presìdent Treasurer Secretary (Please sign here) By Date ñgned 19..