Perhaps the necessity for making a thorough check before investing any money and the immense difficulty of making this thorough check can best be illustrated by three situations. Originally I had intended to entitle this chapter “Crooks I have Known/’ but I thought such a title a little harsh and I retitled it “Three Examples of Somewhat Doubtful Credits;” but in order to fit the highly interesting stories into what is meant to be a primer on investment I finally decided to use the academic title “Judging Credits and Making Collec tions.”

In one of the Middle Atlantic states there was a dealership in mobile homes run by three men whom we will call Smith, Brown and Jones. They sold most of the mobile homes on the time payment plan as the majority of dealers do. The prospective buyer put up a down payment and signed a conditional sales con tract for the balance, including interest. The dealership then sent the conditional sales contract to a nearby bank. The bank checked the credit of the prospective purchaser by reviewing the credit report attached to the contract by the dealer. The dealer had previously secured such a report from the local credit agency in order to determine whether he wanted to sell the coach in the first place because mobile home or trailer coach paper is recourse; that is, if the purchaser does not pay, the dealer must pay off the entire balance to the bank. Investment - Read More.