Banker, the borrower, and the account;

              ATLANTA HASKINS & SELLS PHILADELPHIA
BBOASLTTOIMNO RE CERTIFIED PUBLIC ACCOUNTANTS PPOITRTSTLBAUNRDG H
BUFFALO SAINT LOUIS
CHICAGO SALT LAKE CITY
CINCINNATI BULLETIN SAN FRANCISCO
CLEVELAND SEATTLE
DALLAS TULSA
DENVER WATERTOWN
DETROIT KANSAS CITY
LOS ANGELES HAVANA
LONDON
MINNEAPOLIS PARIS
NEW ORLEANS EXECUTIVE OFFICES SHANGHAI
NEW YORK HASKINS & SELLS BUILDING
37 WEST 39TH ST.. NEW YORK
VOL. V NEW YORK, MARCH 15, 1922 No. 3
The Banker, the Borrower, and the Accountant
THE banker holds the purse. Whether
or not the strings are tight may de­pend
upon the point of view. The condi­tions
surrounding individual cases may
also affect the situation.
The loanable fund of the banker must be
kept intact It must not be jeopardized
nor allowed to pass beyond the liquid state.
Its proper use is to facilitate and finance
current business processes; not to furnish
permanent capital for business enterprise.
The very essence of bank credit lies in the
fact that it shall flow here—there—when­ever—
and wherever needed.
The banker recognizes the principle of
trusteeship. He loans from the purse
funds entrusted to him. His policy is gov­erned
by his sense of responsibility. His
rules are formulated with a view to pro­tecting
himself in this responsibility.
Having in mind the theory of bank
credit and the responsibility of the banker,
there is small wonder that he is particular
about the loans which he makes. Good
business judgment dictates that he shall
demand satisfaction as to the financial
standing of the prospective borrower, his
capacity and character as a business man,
and his ability to repay according to the
terms of the loans.
Upon the commercial borrower falls the
burden of satisfying the banker. He is in
a position different from that of the bor­rower
on collateral, who lays down his se­curity
and lets it speak for him. The
commercial borrower must furnish evidence
of his condition, capacity and character.
There is no help for it. The immutable
laws of bank credit, not the whims of
bankers, demand it. The sooner the ap­plicant
reaches the frame of mind wherein
he is willing to make a confidant of the
banker, the sooner will he, if he is entitled
to credit, find the way made easier for him.
Many who are in a position to know
think the practice of making loans on
character and "hunches" is swiftly passing
into disuse. It is being very generally sup­planted
by scientific investigation based on
financial statements. The information sup­plied
by such statements is far reaching.
It goes beyond the meager balance sheet
of the past, which was framed to give as
little information as possible.
The statements representing the most
advanced thought on the subject probably