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It must also be borne in mind that while prepayment meters can be set to deliver the exact, or at least very nearly the exact amount of gas for a quarter on any straight gas rate, they can not be set to do so if a sliding scale of gas rates is now or hereafter established. Nor can they be adjusted to a Readiness-toServe Rate. This is a very serious objection to Prepayment Meters as, even if a Company now has a straight rate in force, a sliding scale or a Readiness-to-Serve Rate may be established in the future, which would make the use of Prepayment Meters impossible, except on a basis of a monthly settlement with each customer. Such monthly settlements would entail not only an excessive amount of work and expense, but would also result in disputes and wrangling with the customers. It is the writer' opinion that a straight rate for gas is unfair to the company and to its customers, and that the gas rates will gradually be established upon a sliding scale with a fixed price for the first, and every subsequent 1,000 feet of gas used through each meter per month, or upon the still more equitable basis of the Readiness-to-Serve Rate.
Having set forth my experiences with and my opinions of the Prepayment Meter in a vein light, but nevertheless true to life, I now pass to METHODS OF SECURING PAYMENTS OF GAS AC
COUNTS. This I have to some extent already covered in a cursory way. Some axioms and rules that I recommend for your consideration to secure good results in securing payment for gas accounts or any other accounts are as follows:
Ist. Do not sell any gas unless you are reasonably sure you will get the money for it.
2nd. The best credit is not as good as cash.
3rd. It is better not to sell, than to sell and not to get your money.
4th. Do not let fear of your competitors over-ride your sound business judgment in the extension of credit. You are better off to have a deadbeat use electric current frına your competitor and not pay for it, than to have him use your gas and not pay for it
5th. It is a safe bet that a customer who can not pay a gas bill for one month, can not pay gas bills for two or more months.
6th. Present bills promptly when due and follow them up persistently and methodically until paid.
7th. If necessary to notify a consumer that his meter will be removed do so by a courteously worded notice, and not by verbal message. The consumer will like it better, and you do not risk the anatomy of your collector.
The honest consumers finally pay the gas bills of the dishonest consumers and it is your duty to keep the amount of these bills as low as possible so that when the proper time comes, you will not be prevented from lowering your gas rates by the large amount of your Bad Debts.
Keep an alphabetical list of your Uncollectable Bills so that when the parties apply for gas in later years, your clerks will spot them immediately and collect the old bills before a meter is set.
If you accept guarantees explain to them plainly that you expect them to pay all arrear bills on presentation. Remember that the more promptly and the oftener you present past due bills the larger your chances of collecting them. The older a bill is, the harder you will find its collection.
Remember that if you make a profit of say twenty cents per thousand feet of gas sold, and lose $60.00 per month in Bad Debts, you have to sell 300,000 cubic feet of gas per month and collect the money for it in order to make up for your Bad Debts. It will hurt no one of us to ponder on this occasionally.
My experience is that large losses from Bad Debts are usually due more to lax and incapable management and the collection methods of the gas company than to the customers.
In the Collection Department all statements should have a neat record on the back stating the date of each call, the information obtained and the initials of the collector. A code system will prove a time saver. Office ticklers should be used for the filing of the statements, and the first thing in the morning the collector should remove the previous day's partition, so that all statements that should receive attention are each day brought automatically to his notice. If a debtor has promised to pay to the collector on June the 16th, and the collector does not call on him until June the 18th, the debtor has a good excuse for putting the day of payment off for another week.
Before the collectors go out over their routes each morning, the cash collections should be posted on the statements up to the minute. This will prevent the presentation of bills after they have been paid. There is nothing that will more exasperate the public against the Company than mistakes of this kind.
I regret that I have not been able to do more justice to the subject assigned to me.
I thank you for your attention.
DISCUSSION. Burton R. Laraway, Jackson: Consumers' Deposits:
I wish to endorse Mr. Shaldelee's ideas on the desirability of securing consumers' deposits. If properly handled, there is no reason for friction with consumers, and this is about the only way to secure the last bill of a large number of consumers who are constantly leaving town.
I have had some experience with a company whose franchise prohibits the requiring of consumers' deposits, and, without such deposits, it is an exceedingly difficult task to keep down the amount charged to Bad Debts. Prepayment Meters:
Under certain conditions, prepayment meters are undoubtedly valuable, but where a sufficient deposit can be secured I think that the expense saved by eliminating the prepayment meters will more than offset the profit that might be lost on account of business it would be impossible to secure because of the deposit demanded.
One objection to using prepayment meters is the fact that perfectly good consumers insist on having them in exchange for their regular meters, even being willing to be classed among the "Dead Beats” in order to secure one.
A suggestion made by Mr. J. M. Robb, of Peoria, was to use prepayment meters for collecting contract accounts, his scheme being to set the meter at say çifty cents above the gas rate and apply the difference on the contract account. Methods of Securing Paynients of Gas Asccounts:
I do not think it pays to employ boys for collectors; a man can accomplish results that will more than offset the additional salary necessary.
There are some accounts which it seems impossible for a collector to obtain that may be secured by means of a letter signed by either the Secretary, the Treasurer, or the General Manager. To be effective, these letters should be as personal as possible. A few hundred letters of this kind sent out each month, and properly followed up, will bring excellent returns.
Jas. L. Geddes, Detroit:
Having been asked to give a discussion on Mr. Shaddelee's paper on "Consumers' Deposits, Prepayment Meters and Methods of Securing Payment of Gas Accounts," I would say that, in my opinion, the paper has been excellently handled and covers the various points very fully.
The best credit record is for the clerks upon receipt of application to fill out a form showing all previous transactions with applicant, turning the same over to the employe whose duties it is to pass on credits. If the applicant is a new consumer, a letter fro:n employer, guarantee, or cash deposit should be obtained. If he is in business on his own account, his responsibility should be easily established through one of the mercantile agencies, to which mostly all companies are subscribers.
Reference to applicants who profess to own their own homes.
Credit is usually given property owners. This is of course unsafe in many cases, as a goodly percentage of those who purchase property simply pay a small amount down, with a promise to pay a stated amount monthly, or quarterly—a little more than sufficient to pay interest, and run on paying nothing more on principal untii bad health, business depression, or bad luck overtakes them, then they cease to be property owners, and your account goes to the Bad Debt Account.
Mr. Shaddelee recommends the card system for keeping consumers' deposits accounts. I think a loose leaf ledger is preferable and niuch easier balanced. The ledger should show the name in alphabetical order, and subdivided as found necessary, beginning the first sheet with such names as Aaron, Abel, Abbott, and on to, say, Ac— , and so on. The sheet to show name, address, number of deposit receipt, date of issue, and amount, with space for date of refund, and column for remarks, with amount of interest paid. This gives you all the necessary information ,and by addition and deduction you find the balance due consumers on the different pages, as well as individually. If a delinquent gas bill has been applied on the deposit, you have full particulars in the "Remarks” column.
Cards get worn from constant use and sometimes rough handling. "Prepayment Meters."
Mr. Shaddelee makes the statement that "gas rates always go down, never up,” which is a fact, but as everything else has gone up, why should not gas get a boost? Of course the introduction of modern appliances have enabled gas companies to reduce the cost of production, but we are now at such high efficiency that it is not possible to further reduce the cost per M., nor has it been with the larger companies for some years, and were it not for the increase in sales, which of course reduce the fixed charges, office and distribution cost per M, the net earnings would show a large decrease. But take the case of a city at a standstill, some of which there are, and with coal, oil and every article, as well as labor, increased, if the "standstill" city was making only fair returns as formerly, would not an increase in gas rates be justified? The so-called Beef Trusts increase the cost of making gas, as your employes must have more money in order to be able to live.
Referring to the prepayment meter, it is an expensive and unsatisfactory agent, a collector of known and unknown coins. The meter itself is expensive and costs about double the amount of an ordinary meter for reading, collecting and answering complaints, so that what you do not lose as bad debts you expend