agencies business men, by paying an annual fee, are enrolled as
subscribers and furnished with books of ratings, as they are called
To be a recipient of the valuable information afforded by these
agencies business men, by paying an annual fee, are enrolled as
subscribers and furnished with books of ratings, as they are called.
Besides this book special type-written reports with elaborate details
respecting a firm”s credit are sent upon the request of the
subscriber. The volume of information recorded in these agencies
concerning any one”s credit is obtained through the effort of
officials of the agencies known as reporters. These men of experience,
integrity, and discernment are seekers after truths. Usually each
reporter has a distinct line of trade assigned him for research and
investigation. This brings him into intimate acquaintanceship with
every trader in his particular field. He is a constant solicitor of
the banker and merchant for facts. His business is not merely to
gather information respecting the resources of business men, but to
investigate rumours that in themselves may be detrimental to one”s
credit, and to disprove them where possible and sustain and support
the credit of a house. Too often it is supposed that the reporter is
seeking evidences of weakness when in reality his business is most
frequently that of discovering elements of strength. Information is
freely given him as he interviews men whose businesses and experiences
are the depositories for a wealth of credit information. He soon
becomes a confidant of the merchant himself, who not only tells him
all he knows about the customers and their accounts upon his books,
but his own business affairs as well. Indeed, the relation becomes so
very reciprocal that the reporter often furnishes information to the
merchant in the interview on some matter of credit of pressing notice.
In this way a corroboration of facts or the denial of a rumour may be
effected. He inspects the books of the offices of public record to
find the evidence of mortgages, judgments, and transfers of property,
and have the same recorded on the agency”s books. It is the reporter
who finally has gathered the information that determines a firm”s
ability to have and to hold a line of credit.
corporation issuing them
INCOME BONDS are usually secured by a mortgage on the earnings of the
corporation issuing them. Interest on such bonds must be paid before
dividends are declared to stockholders. It is customary when such
bonds are issued to set aside a percentage of the earnings as a
sinking fund to meet the bonds at maturity.
The next most important item in our list of exports is PROVISIONS.
But, like ‘breadstuffs,’ ‘provisions’ also is a composite term,
including two main divisions, ‘meat products’ and ‘dairy products.’
Practically there are three main divisions, ‘beef products,’ ‘hog
products,’ and ‘dairy products.’ We have in these great products of
our country an export trade of $165,500,000 per annum, and if we add
‘animals,’ a similar item, we have $46,500,000 more, or a total of
$212,000,000 per annum. Our export of fresh beef is nearly 300,000,000
pounds a year. Almost the whole of this goes to Great Britain. Our
export of canned beef runs from 40,000,000 to 60,000,000 pounds a
year. About three fifths of this goes to Great Britain, the remainder
going principally to Germany and other parts of Europe and to British
Africa. We have about 50,000,000 cattle upon our farms and ranches,
and our production of beef is estimated to be the enormous amount of
5,400,000,000 pounds a year, which is between a third and a fourth of
the total quantity produced throughout the world. Of course the
greater portion of this is retained for our own home consumption, for
we eat more meat per inhabitant than any other people in the world
except the English. In addition to our beef we export about 400,000
cattle annually, more than seven eighths of which are taken by Great
Britain, our other principal customers being the West Indies and
Canada. The principal export, however, among our ‘provisions’ is our
HOG PRODUCTS. We export annually of these products 100,000,000 pounds
of pork, 850,000,000 pounds of bacon and hams, and 700,000,000 pounds
of lard, with a value greater than $110,000,000. As with our beef
products, so with our hog products–by far the greatest share goes to
Great Britain. Great Britain, however, does not import largely of our
pork or of our lard. And though she purchases from us over four fifths
of our total export of bacon and hams, she does not pay for them so
much as she does for the bacon and hams of Ireland, Denmark, and
Canada. The reason for this is that as a rule our corn-fed bacon and
hams are too fat–a fault that could be easily remedied. After Great
Britain our next best customers for our hog products are Germany
(principally in lard), the Netherlands, Sweden, and the West Indies
(the latter principally in pork). We keep on our farms from 40,000,000
to 50,000,000 hogs, and our production reaches nearly to 4,600,000,000
pounds of pork, bacon, hams, lard, etc., per annum. A great drawback
to our swine-raising industry is the terrible swine plague which so
frequently devastates our swine herds. Were this plague stamped out by
thorough preventive measures our swine industry would soon become very
much larger and more profitable. The third principal item in our
provisions export trade is ‘dairy produce.’ Our export of butter now
amounts to 30,000,000 pounds a year. Our cheese export, once much
greater, is now about 50,000,000 pounds a year. As in our beef
products and in our hog products so again in our dairy products Great
Britain is our chief customer. But our butter export to Great Britain
is only one twelfth of her total importation of butter, and our cheese
export to Great Britain is only about one eighth of her total
importation of cheese. Our cheese has lost its hold on the English
market because of its relative deterioration of quality, and its
export is not more than a half or a third of what it once was. Much of
our butter also is not suited to the English taste. But both our
cheese and our butter are now improving in quality. Our great
competitor in the cheese export trade is Canada. Canada”s export of
cheese to Great Britain is $15,000,000 annually, while ours is only a
fifth of that amount. Our great competitor in butter is Denmark.
Denmark”s export of butter to Great Britain is $32,000,000 while ours
is not more than a fourteenth of that sum. Our competitors in the
markets of Britain for cattle are Canada and Argentina, but their
exports together, however, are less than a third of ours. Our
competitors in the British markets for the sale of meats are
principally the Australasian colonies and Argentina, but their
principal exportation so far is chilled mutton, which they send to
Britain to the amount of many million dollars annually (Argentina
alone $5,000,000 a year, New Zealand alone $10,000,000 a year), while
our exportation of mutton is practically nil. We do, however, export
$1,000,000 worth of sheep a year, but in this item we are frequently
far exceeded by Canada. CHICAGO is, of course, the great commercial
centre of the continent for ‘provisions’ and ‘live stock,’ and NEW
YORK the great shipping port. Of the entire export trade of the whole
country New York does two fifths. BALTIMORE comes next with about one
ninth. Then (in order) come PHILADELPHIA, BOSTON, and NEW ORLEANS. The
chief centres of our great provision and live-stock trade, other than
Chicago, are CINCINNATI, KANSAS CITY, INDIANAPOLIS, BUFFALO, and
OMAHA.
6. What is a certified cheque? Brown gives A an ordinary cheque for
$1000, and B a certified cheque for $1000. He fails before either
cheque is presented. Why is B”s security for his claim considered
better than A”s?
2. (_a_) What is a stock certificate? How does it differ from a
mortgage bond? (_b_) At what rate must United States 4 per cents
be bought to net 3.2465 per cent.? (_c_) Give the successive and
necessary steps in the formation of a stock company. How can the
stock of a company or corporation be increased?
number of the banks incorporated under the laws of the several States
were organised as national banks
Upon the establishment of the national banking system the greater
number of the banks incorporated under the laws of the several States
were organised as national banks. With others, however, the rights of
issue did not outweigh some inconveniences of the national system, and
as a result there is now an important class of banks, and loan and
trust companies, organised under State legislation and carrying on a
deposit and loan business. The regulations under which they work are
necessarily diverse, and the amount of public supervision over them
varies in different states. The State banks in existence when the
national banking system was organised were obliged to retire their
note circulation, owing to the fact that the government imposed a tax
of ten per cent. on their circulation. The object of the tax was to
secure the retirement of the State bank-notes to make room for the
circulation of the national banks. The internal mechanism of State
banks differs but slightly from that of national banks.
limit exceeded
or in buying real estate, or stocks, or bonds, you may find it
necessary to get the cheque _certified_
If you wish to use your cheque to pay a note due at some other bank,
or in buying real estate, or stocks, or bonds, you may find it
necessary to get the cheque _certified_. This is done by an officer of
the bank, who writes or stamps across the face of the cheque the words
‘_Certified’_ or ‘_Good When Properly Indorsed_,’ and signs his name.
(_See illustration._) The amount will immediately be deducted from
your account, and the bank, by guaranteeing your cheque, becomes
responsible for its payment. Banks will usually certify any cheque
drawn upon them if the depositor has the amount called for to his
credit, no matter who presents the cheque, and this certifying makes
it feasible for a man to carry in his pocket any amount of actual
cash. If you should get a cheque certified and then not use it,
deposit it in your bank, otherwise your account will be short the
amount for which the cheque is drawn. In Canada all cheques are
presented to the ‘ledger-keeper’ for certification before being
presented to the paying teller.
limit exceeded
industries and becoming a manufacturing and commercial nation instead
of an agricultural nation
Germany, like England, is rapidly changing the character of her
industries and becoming a manufacturing and commercial nation instead
of an agricultural nation. This is the cause of her well-known anxiety
to secure control of territories in Africa, Asia, etc., as exclusive
markets for her manufactures, for, unlike England, Germany is at
present a believer in exclusion in trade, both at home and in her
colonies. Fifty years ago about four sevenths of the people of Germany
were engaged in agriculture; now only about one third of the people
are so employed. The growth of the great cities of Germany is eight
times faster than that of the rural districts, and in fifty years the
aggregate population of the six largest cities of the empire–Berlin,
Hamburg, Leipzig, Munich, Breslau, and Dresden–has grown sixfold,
namely, from 600,000 to 3,600,000. In fifty years, too, the
manufactures of Germany have nearly doubled, the commerce nearly
trebled, the shipping increased more than fivefold, and the mining
output more than sixfold. While all this is true, it nevertheless is
also true that the area of cultivated soil in Germany is double what
it was fifty years ago. But this is because much land, formerly waste
or in pasture, has been brought under cultivation. Yet even now only
one half of the land of Germany is cultivated, and thirty-three per
cent. of the total food consumption of the people has to be imported.
Fifty years ago only five per cent. of the total food consumption was
imported, and this small fraction consisted almost wholly of
luxuries.
SURPLUS FUND. It is not customary to pay a larger dividend than good
interest. The profits remaining after the expenses and dividends are
paid are credited to what is called a surplus fund. This fund is the
property of the shareholders and is usually invested in good
securities.