urs, such as dating bills ahead or
the privilege of renewal of notes, one is able to read a certain
unmistakable sign of degeneracy in the customer's credit. New orders
from such a customer will bear scrutiny; and a closer attention to the
present condition of the account may save the firm from some bad
debts.

While it is possible to-day to determine the average losses from bad
debts in the various lines of business, individual risks cannot be
accepted on that basis. Each requires special study. If an applying
customer paints his financial condition in roseate colours, let him be
willing to reduce his statement to writing, and when his signature is
affixed his statement is much more reliable, because he knows of the
impending liability of fraud if he has misrepresented. Men averse to
transforming an oral statement to writing have discredited themselves
immediately. Men who mean to be honest may be optimistic in picturing
prospects and be inclined to set an unreasonable value upon their
property and extent of business. It may be easier to tell the absolute
truth about one's liabilities, because they are such persistently real
things; but assets have elastic qualities in many men's minds and seem
capable of any extension in an emergency. Buyers who impress
themselves most favourably upon the business house are frank in their
statements. The explicit, candid man of few words will merit
consideration. The cringing or pleading kind predisposes one
unfavourably. Stephen Girard said of one who in tears asked for a
loan: "The man who cries when he comes to borrow will cry when he
comes to pay."

To determine the right of a buyer to credit and the safe limit of
credit to be extended to him is the seller's serious problem. It is
customary to request references in order to discover how other firms
regard the applicant's credit. But these references may be cautious of
reply. A selfish desire to retain the customer for themselves, or the
higher motive of a desire to be true to the interests of both the
inquirer and the customer may produce dubious or very incomplete
reports. If a bank be among the references one does not place too much
stress upon a very favourable reply from it, because a merchant
usually learns the lesson of expediency in making a friend of his
banker. And, moreover, one endeavours to reveal only the best side of
his business affairs to the bank. Favourable replies from several
firms showing a uniform line of