A Disgruntled Correspondent

A manager in the service of one of the larger banks, who had been endeavoring to keep his collection business on a proper basis by charging regular rates to other banks, received the following letter from a disgruntled correspondent:"Dear Sir,-I regret to note that you have again " charged us 1/8 on a collection bill in your settlement " draft 21791, $261.90. All we are able to get on these " items is 1/8, so that we make nothing and lose our " postage.

" If you will allow me to say so, it is only inviting " competition to overcharge in this way, as one of your " branches has already discovered. We had been " sending to one of your branches, and they were " charging more than the present scale among banks, which resulted in another bank going in-then they " were anxious to give any kind of low rates. With the " competition among banks such as obtains now, to my " mind it is much wiser to be moderate, as, should oppo-" sition come, one would be pretty sure to hold his " business.

"Of course, this is only my unasked opinion."

Yours very truly,

X. Y. Z., Manager.

Suggested Remedies For Over-Competition

If the country manager were to keep in mind that when he makes too free an offer of his facilities to other banks he may be putting into the hands of those banks weapons that will enable them to compete the better for the metropolitan business of his own bank, he would not, perhaps, be so ready to make his exceptional offers. Every offer of par collections to another bank puts that bank pretty much on the same level as the collecting bank's own branches with regard to the particular point at which it is made.

Several remedies occur to the mind as being likely to have an effect in reducing competition in collecting to reasonable limits. One is for the banks to appoint other banks as correspondents in regular order of preference, and for each bank to insist upon all its branches sending all their collections to the properly appointed correspondents, regardless altogether of offers of cut rates that might be received from particular points. Some of the more dignified institutions already pursue this policy. If all could be prevailed upon to do so, conditions would become better all round. Again, some good would be effected if care was taken to acquaint the general managers with specific particulars of cases of flagrant cutting of commission rates by any of their managers. Too often the cutting is done with the general manager in complete ignorance. It is not to be supposed that he would concur readily in the action of one of his branches in placing all of its facilities freely at the disposal of his competitors.