formation on the reputation of the foreign buyer in his local market, and the manner in which his business is conducted. SOURCES OF INFORMATION IN THE UNITED STATES The majority of American exporters do not conduct their business through their own agents abroad and so credit information cannot be obtained directly from foreign sources but indirectly through various channels in the United States. Undoubtedly, the best medium for obtaining credit information is the American bank maintaining international connections through foreign correspondents, or branches abroad. The credit department of such a bank will possess thousands of files which will throw light on the standing of buyers all over the world. This service is expensive to the bank, but is usually given free to its customers. FOREIGN CREDIT INTERCHANGE BUREAU American business houses selling in the same trade can of course furnish worth-while information concerning foreign buyers. While such an interchange of ledger experience would undoubtedly prove helpful, the practice is not generally followed. However, this object has to a large measure been attained through the efforts of the National Association of Credit Men. In 1919 it organized the Foreign Credit Interchange Bureau. It functions as a clearing house for the interchange of the ledger experience of the members, which include several hundred of the most important American manufacturers, merchants, and commission houses and recently a number of banks. The operation of the bureau is best described in one of its circulars which in part reads as follows: As each member is accepted by the Bureau, a number known only to the member and the manager of the Bureau is assigned. Forms for supplying the Bureau with a list of the member's customers in foreign countries and export commission houses in this country are provided. Nothing appears on this list of customers except the number assigned to the member. When the list is received by the manager, he consults the card index files of the Bureau to ascertain if the name is already listed. If it is listed, the number assigned the member is then placed on the card bearing the name and address of his customer. When a name not listed appears on the list, a new card is made out, and the member's number is placed on the new card. This method serves a dual purpose, viz: it enables the Bureau to know where to secure information and in case of receipt of interesting information regarding an account, makes possible a guarded dissemination to only those interested. When an inquiry is received, it is immediately looked up in the files. If a recent report is on hand, a copy is sent to the inquiring subscriber by return mail. If nothing is available from the files, an inquiry is sent to each subscriber that has had experience with the particular firm under investigation. When a sufficient number of replies have been received, these are summarized on a standard report form which is then sent to all members who have contributed information. A typical report is reproduced as Illustration 8. An informal interchange of opinions on foreign credit risks is also conducted through associations such as the Boston Export Round Table composed largely of export managers of firms engaged in foreign trade. The interchange principle is also followed by the American Exporters and Importers Association which furnishes its members with credit data. The value of the system of credit interchange is obvious especially in preventing foreign customers from overbuying, but the information is naturally limited to only those foreign firms with which the members of the organization have, or have had, business relations. Increase in membership is, therefore, most desirable, since it will have a cumulative effect upon the volume of credit information available. TRADE ORGANIZATIONS NATIONAL ASSOCIATION OF AMERICAN MANUFACTURERS Although interested primarily in domestic business, the National Association of American Manufacturers conducts an extensive credit service department. It operates largely through several thousand correspondents including lawyers, bankers, and merchants who for a commission will submit a report on the financial standing of business houses in their respective communities. Operating in somewhat similar manner is the Philadelphia Commercial Museum which for a number of years has been supported by the Government of the United States and State of Pennsylvania, for the purpose of advancing foreign trade. COMMERCIAL INTELLIGENCE DIVISION In line with the development of wider government service to American business interested in foreign trade, has been the establishment of a Commercial Intelligence Division by the Bureau of Foreign and Domestic Commerce within the United States Department of Commerce. The division assembles the reports prepared by the consuls of the Department of State and by the representatives of the Department of Commerce, and from this material prepares classified lists of importers in various lines of trade in all parts of the world. While these reports and lists cannot be regarded as constituting strictly credit information, nevertheless the data have proved most helpful to American exporters. Several organizations interested in collecting foreign credit data have their own representatives in the department for the purpose of obtaining the material direct. COMMERCIAL REPORTING AGENCIES A different type of credit service organization is the commercial reporting agency. While the various trade organizations described above conduct a credit bureau merely as an incidental service for their members, the commercial agency is operated primarily for the purpose of gathering credit information and circulating it among subscribers. The two largest agencies are the Bradstreet Company |