Of these books, one of the most important is the " Information Book." 1 There is no doubt that a banker of great experience, and of a strong memory, may always bear in his mind a very correct estimate of the standing and character of all the houses that usually come under his notice. But this does not supersede the necessity for recording his information in a book. His memory may fail, and that too on important occasions; and certainly if he leave the bank for a short time, as he must sometimes have occasion to do, he will carry his memory with him. But if the "Information Book" be closely kept up, he will record his knowledge for the use of those who will have to take his place. It is no valid objection to the keeping of such a book to say that the position of houses is perpetually changing. Those changes should be recorded, so that their actual standing should always be readily referred to. If a banker is requested by a customer to make inquiry about a house, he should record the information he gets for his own guidance, in case any bills on that house should afterwards be offered him for discount.
1 It is now the almost universal practice in London to record the information obtained, on cards, instead of in an "Information Book." The cards are arranged alphabetically in drawers, and the information on each can be added to from time to time much more readily, and is more accessible, than if recorded in a book.
A banker will get information about parties from inquiry at their bankers, as we have mentioned at page 219. This information may be defective in two ways. In the first place, their banker may judge of them from the account they keep - that is, from the balance to their credit - and thus he may give too good an account of them. Or, secondly, their banker may have an interest in keeping up their credit, and under this bias he may not give them so bad a character as they actually deserve. Another source of information is from parties in the same trade. Houses in the same trade know pretty well the standing of one another. Wholesale houses are well acquainted with the retail shopkeepers who buy of them. Most bankers have among their own customers some houses in almost every trade, who can give them any information respecting other houses which they may require. The bills that pass through his hands will also often give him some useful hints respecting the parties whose names are upon them.
It is of great importance to a banker to have an ample knowledge of the means and transactions of his customers. The customer, when he opens his account, will give him some information on this subject. The banker will afterwards get information from his own books. The amount of transactions that his customer passes through his current account will show the extent of his business. The amount of his daily balance will show if he has much ready cash. The extent and character of the bills he offers for discount, will show if he trusts large amounts to individual houses, and if these are respectable. On the other hand, the bills his customer may accept to other parties, and his payments, will show the class of people with whom he deals, or who are in the habit of giving him credit. But one main source of information is to see the man. This, like other means of information, will sometimes fail; but, generally speaking, the appearance and manners of a man will show his character. Some people always send their clerk to the banker with bills for discount, etc. This is all very well if they want no extraordinary accommodation; but if they ask for anything out of the usual way, the banker had better say that he wishes to see the principal. And if he had a doubt whether his customer was tricky or honest - speculative or prudent - let him be guided by his first impression - we mean the impression produced by the first interview. In nine cases out of ten the first impression will be found to be correct. It is not necessary to study physiognomy or phrenology to be able to judge of the character of men with whom we converse upon matters of business.
A country banker has greater facilities than a London banker of ascertaining the character and circumstances of other parties. In a country town everything is known about everybody; a man's parentage and connections - his family and associates - the property he has already received, and what he may expect to receive from his relations - and, above all, his personal habits and di§-position. Upon the last point, we will make a short extract from an excellent series of "Letters to a Branch Manager," published in the "Banker's Magazine," under the signature of "Thomas Bullion."
"Next in importance to a study of his accounts, the habits and character of a client are deserving of your attentive consideration. If a man's style of living, for example, becomes extravagant, and he gives himself over to excess, you cannot too promptly apply the curb, however regular the transactions upon his account may seem; because years may elapse before mere irregularity of living will make any impression on his banking account; whereas irregularity in business will exhibit itself immediately, and for this reason, - that whereas improvident habits of living involve a continuous waste in small sums, spreading over tolerably long periods, improvidence in business may involve in one fell swoop the loss perhaps of thousands. I hold, then, that you are not warranted in all cases in feeling satisfied of a man's perfect responsibility until his banking account exhibits indubitable evidence to the contrary."
A banker should always have general principles; that is, he should have fixed rules for the government of his bank. He should know beforehand whether he will or will not advance money on mortgage, or upon deeds, or upon bills of lading, or warrants; or whether he will discount bills based upon un-commercial transactions, or having more than three months to run. These are only a few of the cases in which a banker will find it useful to store his mind with general principles.