considered as one of its chief topics the inadequacy of the agency reports, and at some of the earlier meetings representatives of the Dun and Bradstreet agencies were present to defend their methods. It was urged that signed statements should be secured from the merchant in all instances when possible, and if the latter refused and the information had to be secured otherwise, this fact ought to be so indicated in the report of the agency. It was claimed that agencies ought to have efficient reportorial staffs who were experts in dealing with business men and in reporting business conditions; that a search of records ought to be made in every instance, and that no indefinite reports should be given; that all ratings should be revised at least every six months, and that new information should be furnished promptly on request; that all statements should be carefully tabulated. It was urged that a large number of the reports were written by men in various communities, usually by lawyers, who relied largely on hearsay evidence, and that the reports in no way indicated the sources of information. It was claimed that especially in country districts reports were inaccurate and special reports were received tardily. In all cases where a regular reportorial staff was collecting information it was claimed to consist frequently of an inferior set of men, and that much of the antipathy of business men for the agencies and the inadequacy of information was due to a lack of tact and diplomacy in the reports of the agencies.

The agencies looked upon the claims of the credit men as ideal and visionary. The latter were informed that the carrying out of the recommendations suggested would involve a very great expense, and that the receipts of the agencies would not warrant the undertaking of the improvement suggested.

The agitation in favor of a higher standard had an immediate effect in improving the efficiency of the agencies. The president of the Bradstreet Agency claimed that in 1898 his company expended $150,000 more than in former years in improving the service, and it was said that extra expenses were incurred by the Dun Agency for the same purpose. The reports were better arranged, more promptly rendered, and were secured by a more efficient set of men.

For five years the Mercantile Agency Committee compiled statistics on the comparative efficiency of the Dun and Bradstreet companies covering in general the following points: (1) Aver

age time between asking for reports and receiving them; (2) average age of the first report received; (3) percentage of reports containing signed statements not more than one year old; (4) the promptness of reporting changes; (5) arrangement and form; (6) classification of reports according to excellency by districts. These data were furnished by the local associations and the members of the National Association. When these facts were first published they at once showed the comparative efficiency of the two leading agencies and at once a vigorous rivalry was created. So long as no method exists to show definitely the comparative merits of rivals, vigorous competition will be lacking; while the fixing of a definite standard for determining superiority stimulates efforts to excel as nothing else can.

The credit men claim that the suggestions made to the mercantile agencies have received consideration and that the service of the agencies has improved in every way. The feature complained of most frequently at present is the lack of accuracy in the detailed reports. One of the resolutions presented at the 1905 meeting and passed unanimously was "That R. G. Dun & Co. and the Bradstreet Co. be requested to discontinue in their reports the expression, 'He is the reported owner of real estate,' etc. The ownership of real property is a matter not of supposition but of fact, and easily determined; and we have a right to expect that they will search the county records and establish the facts as to whether the real estate referred to stands of record in the name of the reputed owner or some one else." This resolution indicates the feeling of the credit men regarding certain classes of the reports of mercantile agencies.

The Mercantile Agency Committee has endeavored to secure signed statements from merchants upon uniform blank sheets made out by them. To this end they have endeavored to prevail upon the agencies to use their signed statements, but so far their efforts have been unsuccessful. While the agencies have modified the form of the blanks formerly used, they have been unwilling to adopt those suggested by the credit men. As stated above the signed statement has many features to commend it. While statements rendered in writing may be inaccurate, they are as a rule much more truthful than verbal reports. The necessity of making a signed statement causes merchants to know their business more accurately and to keep better books. A signed statement

has a legal significance. The merchant who makes a signed statement does so with a view to secure credit. If this statement is manifestly false, his offense comes under the head of securing goods under false pretenses, and the offender is criminally liable. So in all cases where preferences are allowed and the bankrupt has made some signed statements, the advice of his attorney is invariably to take care of such creditors first.

It is well known that different localities have a different class of agency service. Everything depends on the efficiency of the man having charge of the territory. In some places the service of one agency is far superior to that of the other, and in other localities the reverse is true. A resolution providing for the continuance of the investigation of the relative merits of the two agencies generally and also an investigation of localities where each is deficient was passed at the June meeting 1905.

As other private concerns the agencies are of course interested in profits, and this is kept in mind in the introduction of improvements in service. That the service rendered is not all that is desired by business houses is seen in the tendency of large wholesale and banking houses to employ experts whose exclusive duty it is to investigate customers' affairs and to study conditions which directly influence credits. In doing this they are reducing agency service and depending more and more on their own agents. In this development we see a return to conditions prior to the organization of the agency service. How far this tendency will go before the agencies will meet the demands made on them will remain to be seen.

The Committee on Credit Department Methods has labored f om the outset to secure the adoption of uniform inquiry blanks and statement blanks. At the first meeting forms were proposed and sent out to the various local associations to be topics for discussion at the meetings in 1897. Forms were adopted at the convention of 1898 which provided for giving the creditor a clear idea of the standing of debtors, and were sufficiently binding to make the debtor criminally liable in case of false statement. Both the uniform statement blanks and inquiry blanks are now generally used by houses when they seek to learn directly the standing of the establishments with which they deal. Much is gained in the adoption of a single form of report. Merchants are not confused by having different kinds of reports to make out,

they know what to expect, and the binding nature of the report becomes generally known.

At present the Committee on Credit Department Methods furnishes two classes of forms (1) on the exchange of credit experience and (2) property statement. These are sold to members and others. Of the first class, the exchange of credit experience, but one form was handled in 1904-1905, and the total sale amounted to 213,600.* Several forms were furnished on property statement, and the total sales of these were 44,500. The forms now used are the result of experiment since the association was organized.

It soon became apparent that in order to have uniformity in bankruptcy legislation, it was necessary to secure the passage of a national law instead of trying to bring about uniformity through the coöperation of the various state legislatures. No matter with what skill state laws would be drafted, state legislatures could always be relied upon to modify the laws sufficiently to make the legislation of the various states diverse. On this account the National Association of Credit Men, as well as most of the local associations, vigorously supported the Torrey bill when it was before Congress, and later the present Bankruptcy Law. Since the law has been in operation, the Legislative Committee has been very aggressive in proposing amendments, with a view of removing the worst features. During this time, however, the interest of the Legislative Committee has never lapsed in procuring reforms in state legislation.

The National Committee usually works in coöperation with the state associations to secure local legislation. In all cases where bad laws are on the statute books cases are introduced to test their constitutionality. In 1896 the New Orleans Association, with the consent of the National Association, took charge of all legislative questions in Alabama, Arkansas, Texas, Georgia, the Carolinas, Mississippi, Florida, and Louisiana. Two laws were passed by the Louisiana legislature in 1896. The laws introduced in Alabama and Arkansas were passed in 1899. The chief reform in Louisiana prevented preferences. The preference abuse had attained enormous proportions. Out of the 334 failures which occurred between January and September, 304 were deeds of trust. This was manifestly a discrimination in Monthly Bulletin Nat. Assoc. Credit Men, June, 1905, pages 35-36.

favor of the resident jobber. In 1899 laws were passed to prevent merchants selling goods in bulk in the states of Oregon, Minnesota, and Maryland. The local credit men's associations were responsible for the law in Oregon, the retail grocers in Minnesota, and the Baltimore association was responsible for the Maryland law. In Ohio the Cincinnati Credit Men's Association secured the introduction and passage of a law preventing preferences of all kinds. As soon as the law was passed five thousand dollars was voted by the association to prosecute men who failed fraudulently.

Several years ago the National Association of Credit Men began a crusade in favor of laws regulating the sale of goods in bulk. From the beginning this sort of legislation has been opposed by the class of traders who occasionally operate bulk sales. The lawyers opposed it because they did not believe in regulating by statute the method by which goods should be sold in bulk. The legislative committees labored persistently, and at present laws regulating bulk sales have been passed by twentyfive states.* In the absence of such legislation it was held that practices exist which are injurious to trade. Credit is granted because of the necessity of paying debts from the proceeds of goods purchased. It is granted under this assumption that the customary methods of trade will be followed by the retailer. When goods are sold in bulk, the customary methods of the merchant are abandoned, the seller needs to make no provision to liquidate the liabilities, and the creditor has no claim whatever against the stock.

To correct these abuses the National Association of Credit Men has proposed a specific law, the chief provisions of which have been incorporated in all the laws of the states which have restricted sales in bulk. The important provisions of this law are the following: Five days before the sale, the seller and purchaser must make a detailed inventory showing the quantity and as far as possible the cost price of each article to be sold; (2) five days before the sale the purchaser must make an inquiry as to names, places of residence or of business of all creditors of seller and amount owing each creditor. A written answer to these inquiries must be secured from the seller and retained six

Louisiana, Oregon, Minnesota, Maryland, Indiana, Washington, Tennessee, Wisconsin, Ohio, New York, Colorado, California, Idaho, Utah, Oklahoma, Virginia, Massachusetts, Connecticut, Georgia, Kentucky, Illinois, Maine, Pennsylvania, District of Columbia.