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the inquirer: "Don't believe everything a school tells you. Investigate for yourself. Find out if reputable men are active in the administration of affairs. Above all, be sure to avoid any school which holds out inducements that seem to your commonsense unlikely of fulfilment."

It might also be added that the applicant should bear in mind that no school can make an accountant of him if he has not the God-given ability, the honesty and the persistence which are required.

“The Stable Money League" We recently received a circular bearing the title The Stable Money League. At first glance it appeared that this had something to do with the race course. But it is really a more serious if less substantial affair.

Upon looking over the document more carefully we discovered a long list of persons who are described as proponents of “The Stable Money League." There are ex-governors and various other kinds of exes, and there is a numerous company of school and university instructors, and there are also some names of practical persons who should know what they are doing.

The matter would have attracted no lasting attention had it not been for the fact that it seemed to have something to do with economics and therefore might have a bearing on accountancy.

Careful review of the document shows that it is largely based upon the ideas of Professor Irving Fisher of Yale, who has evolved the thought, which is not altogether original, that the dollar or other monetary unit should conform to the value of the thing purchased. It is a beautiful theory, this notion of a fluctuating dollar. It is the kind of thing that would bring unspeakable joy to anyone who enjoys frolicking with the differential calculus. It might even appeal to retired college professors of speculative tendencies. When Professor Fisher's book Stabilizing the Dollar was published it did not seem likely that it would do any great harm and it probably made Professor Fisher feel much better to have produced it. The amazing thing to us is that it should have received such serious attention as to lead to “The Stable Money League.”

One sentence in the prospectus appeals to us largely: "There will be a grade of membership to fit every size of pocketbook and every degree of interest." Quite consistently the grades of membership are to fluctuate with the bobbing dollar. The member with few dollars will find them worth so much more than the dollars of the member who has many that the poor shall be rich and the rich poor, and all will be level, and we shall reach what Don Marquis calls his Almost Perfect State—at least it shall be so in "The Stable Money League."

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Competitive Bidding The readers of this magazine comprise not only accountants but a great many business men and leaders of industry. Many of the subjects discussed in the editorial pages of the magazine are primarily of interest to accountants and to others directly or indirectly concerned with accounting. But there are many matters which are of as great interest to the man of business as to the professional practitioner, and one of these is the question of competitive bidding which has been frequently considered here.

The accountant who enters into competition with his professional confrères is likely to be so desirous of obtaining an engagement that he will undertake work at a price which cannot produce a profit if the work be properly done. It is at this point that the man of business becomes interested in anything that will tend to abolish professional competition.

The arguments have been put forward many times, but occasionally it is well to return to the subject. Recently we have received copy of a letter written by an eminent accountant to the audit committee of a national bank in a distant part of the country. The letter is so clear and incisive that we present it for the information of readers in the hope that if any reader still clings to the idea that competitive bidding is wise he may repent and be converted :

We have to acknowledge the receipt of your letter of May 9th asking us to make a flat price for an audit of the bank.

In a separate memorandum we are making some suggestions in respect of the audit programme which was enclosed in your letter.

The writer of this letter would like to direct your attention with candor and in seriousness to the method you seem to have adopted for determining the selection of your auditors. We hazard the statement that no reputable firm of high standing will make a competitive bid for a professional engagement. The rendering, of a professional service differs from an ordinary commercial proposition which may lend itself to competition.

Were you to retain a lawyer or consult a physician, you would not shop around or ask for bids. You would call in a professional in whom you had

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confidence and take his advice. If he served you well you would be likely to engage him again when you had need for his services. Should your judgment prove faulty you would be more careful another time.

Permit us to ask you to make some inquiries about the professional ethics applicable to the relation of accountant and client. We are satisfied that such an inquiry will dissuade you from either asking for bids or asking that a service be rendered on the basis of a flat price, at least until after the accountant has been your auditor long enough to be entirely familiar with the conditions and circumstances surrounding the engagement. This involves the condition of the records, the system of accounts and the bookkeeping machinery employed, the personnel, the methods of internal check and many other circumstances.

Pardon this blunt, but nevertheless candid and sincere, criticism of your courteous and kindly letter. We could not forego the opportunity of taking advantage of your inquiry to engage in a little educational propaganda.


A regional meeting of the American Institute of Accountants was held at the Hotel Statler, Detroit, Michigan, Friday, April 8, 1921.

There were 165 registrations representing the following states: Illinois, 12; Indiana, 5; Iowa, 3; Kentucky, 1; Michigan, 110; Minnesota, 1; Missouri, 2; Ohio, 25; Ontario, 3; Wisconsin, 3.

The meeting was called to order at 10 a. m. by Frederic A. Tilton.

An address of welcome was delivered by Henry Steffens, comptroller of the city of Detroit.

Mr. Tilton was unanimously elected chairman of the meeting.

D. W. Springer delivered an address on the Educational Requirements for Public Accountants.

The meeting adjourned for lunch.

At two o'clock a paper entitled The Profits and Financing of Manufacturing Corporations was read by E. Elmer Staub.

The paper was followed by a general discussion opened by Franklin Bowman.

A paper entitled Treatment of Overhead When Production Is Below Normal was read by C. B. Williams and followed by a general discussion, led by Robert L. Turner.

L. H. Olson delivered an address on the subject Appraisals and Income Taxes.

The discussion was opened by William C. Rowland.

P. L. Billings, on behalf of the accountants of Iowa, extended an invitation to hold the next mid-west regional meeting at Des Moines in November.

The invitation was accepted with thanks.
The second Friday in November was selected as the time of meeting.

The following advisory committee for the next meeting was elected: P. L. Billings, chairman, Iowa; Albert T. Bacon, Illinois; Cyril N. Bullock, Michigan; Page Lawrence, Missouri; James C. Mahon, Kentucky; George S. Olive, Indiana; C. I. Smith, Wisconsin; Herbert M. Temple, Minnesota; C. B. Williams, Ohio.

A vote of thanks to the committee on arrangements was unanimously adopted.

The meeting adjourned.

A banquet was held in the evening, at which Frederick W. Morton was toastmaster.

The following addresses were delivered:

The Aims of the Institute, by Carl H. Nau; Traditions of the Profession and Their Keeping, by Edward E. Gore; Some Recent Income-tax Decisions, by Archibald Broomfield.


We publish this month the much discussed decision of the United States supreme court relative to taxing income arising from sale of capital assets. The subject matter of this decision and the conclusions are of first importance to accountants. This fact has been borne in upon us by the number of requests that have been received by this department furnish the full text of the decision.

The conclusions of the court are in accordance with best accounting principles and thought, and, like the decision respecting stock dividends, are received with much satisfaction by the accountancy profession.

This issue also contains a number of treasury decisions that should interest the readers of THE JOURNAL OF ACCOUNTANCY, among which we wish to single out No. 3159. This decision deals with a question that is met frequently by accountants.

In the case cited, a receiver of a railroad received in 1918 a lump sum as extra compensation for his services rendered over a period of five years. It had been his habit to make his income tax return on a cash-receiptsand-disbursements basis, but upon receiving the lump sum aforementioned he sought to make amended returns for the years of his service upon the theory that a pro rata share of the extra compensation had accrued to him each year. This method of handling his tax problems was denied by the court hearing his plea.

Because the Income-tax Department has used more than its allotted space in this month's issue, no further comment upon the treasury decisions published will be made, but we urge a careful reading of them, as they are all instructive.


No. 608.-OCTOBER TERM, 1920 The Merchants' Loan & Trust Company, as

trustee of the estate of Arthur Ryerson, deceased, plaintiff in error,

In error to the district

court of the United

States for the northern Julius F. Smietanka, formerly United States

district of Illinois. collector of internal revenue for the first district of the state of Illinois.


(March 28, 1921] Mr. Justice CLARKE delivered the opinion of the court. A writ of error brings this case here for review of a judgment of the district court of the United States for the northern district of Illinois, sustaining a demurrer to a declaration in assumpsit to recover an assessment of taxes for the year 1917, made under warrant of the income-tax act of congress, approved September 8, 1916 (39 Stat. ch. 463, p. 756) as amended by the act, approved October 3, 1917 (40 Stat. ch. 63, p. 300). Payment was made under protest and the claim to recover is based upon the contention that the fund taxed was not "income" within the scope of the sixteenth amendment to the constitution of the United States and that the effect given by the lower court to the act of congress cited renders it

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