very essence of business principles, men who have been forced by the nature of their work to consider all questions judicially and impartially? Already the business man has deemed it wise to write into his partnership agreement or into the by-laws of his companies a provision for regular audits and statements of the accounts by disinterested certified public accountants.

One of the best things the accountant ever did for himself and his profession was to get together with his fellows. Ten years ago men in the same state, or the same city for that matter, scarcely knew each other, while men in different states had practically no intercourse with one another.

In closing I feel that the progress of the public accountant, whether certified or not certified, has been immeasurably advanced by this week's work in St. Paul. No one in touch with the spirit in which the important affairs relating to the profession have been handled here both in committee and in open meeting can fail to be impressed by the fact that the future of the profession in this country is in trustworthy hands; that in the American Association of Public Accountants we have an organization in which we can take all pride.

The Accountants of Western Canada.

BY W. SIDNEY RONALD, C. A.,

President Institute of Chartered Accountants of Manitoba.

Our Secretary gave you a brief outline this afternoon of the work which the Chartered Accountants Association of Manitoba is trying to accomplish as an educational body, but he did not mention the work we are endeavoring to do along the line of developing sound business principles. Just as your Association is striving for public recognition as a body of specialists and experts, so are we, but it is a lamentable fact, that men to whom we have conceded the best judgment in business affairs can ignore or be ignorant of the distinction between Certified or Chartered Accountants and "Bookkeeper Auditors."

This latter class obtains to a very large extent in Western Canada, due, perhaps, to the newness of the country, the uncultivated business methods and lack of realization of the vital importance of an accurate diagnosis and presentation of facts for the grounding of future administrative policies, by those whose interests are at stake. Thus our work as yet is of a pioneer nature to an extent, although I am pleased to say that a notable improvement is apparent each year.

Just as a man appreciates the functions of a physician for his bodily welfare, so should he be brought face to face with the functions of a professional accountant for his business welfare. In educating those who have to be educated along this line, the accountants of Western Canada and elsewhere have a question of some delicacy to deal with. This ques

tion is, however, receiving our attention, and we find that results are being attained. Undesirable piratical practitioners upon the public and profession are beginning to find their level with us, as I suppose with you also. The organized bodies of reputable accountants must be ready to make judicious use of such opportunities for the advancement of their own merits, and the instruction of unfortunate clients as to the importance of making the distinctions hitherto unconsidered by them.

I was very much gratified to find, some weeks ago, that a body of men appointed in one of our western provinces to report upon a uniform system of municipal government had strangely recommended, among other things, a compulsory uniform system of bookkeeping, and a compulsory audit thereof by a qualified government appointee with the rider that an outside accountant or firm of accountants might be retained by the municipalities, towns, or cities, if they so desired. This is not as much as we should have liked to see recommended, but it is a straw in the wind indicating that the past has not been all that could have been desired, and that attention is being directed to the betterment of this important department of public affairs.

This convention has been a very instructive and enjoyable affair to every co-delegate and myself. Hazy ideas which had previously come to us in planning the future welfare and activity of our Association have been developed, and plans have become concrete by the deliberations of your gathering.

On behalf of our Association, I extend greetings and the injunction that on no account must any one of you visit Winnipeg without making the fact known to us.

The Relation of the Public Accountant to the

Lawyer.

BY ALBERT N. EASTMAN,

of the Chicago Bar.

While in an ancient bankruptcy proceeding (the year 1720) appears perhaps the first formal report of a public accountant, yet the evolution for good in the profession of accountants corresponds to that of the law. Few professions are linked close together. As opinion, in past ages, has generally associated the profession of the law with that of dispute and trouble, so has it become likewise considered in the practice of your profession. There is of record a saying that: "Accountants make their fortunes by the misfortunes of others." That the world is growing better is evidenced by no more conspicuous sign than the fact that this hitherto common opinion, both as to accountants and lawyers, has changed, and their services are to-day and every day being more and more sought for under constructive conditions rather than destructive.

Without the public accountant and his assistance, we must necessarily return to the small and limited transactions of our forefathers.

Fearless integrity is the foundation stone of both our professions. In the profession of law, the duties of the lawyer, and general practice is rapidly changing to-day (and has in the past), and likewise are the duties and requirements of the Public Accountant. The abstract guarantee companies are absorbing the real estate practice. The great commercial houses with their credit departments: the liquidating and adjustment bureaus: the reporting agencies: All absorb the commercial business or greatly lessen its quantity. The consolidations, great and small, absorb many clients of many attorneys and pass them on to but one, in this manner also, eliminating the chances of dispute and law-suits. The business of these large concerns need and use lawyers as clerks," who in turn become narrowed by their routine clerical work.

These same agencies have created and are rapidly increasing the demand for those in your profession. One man with a small business may keep, or have kept, the accounts under his own immediate supervision. As he takes unto himself partners, the employees increase, and the farther each partner in interest is removed from personal transaction of the business, the greater is the necessity for accountants and auditors. As these ventures become corporations, and their stocks and securities pass current in strange hands, it requires that the accountants and auditore should be publicly stamped as those to be depended upon.

In case of trouble, it is this accountant who must hand to the lawyer the facts that he will lay before the judge, so that the case can properly be dealt with and justice done to all. Time cannot permit personal investigation by each judge, and if it would, the day has long since passed, under the methods of our jurisprudence, when the judge decides by such means. The results are presented to him and it is this necessity that brings together the attorney and the accountant in such intimate association.

If shoulder to shoulder, we would lift the planks of dishonesty and recognize, in the dark, the signs and mysterious paths of fraud and conspiracy, each must have sufficient knowledge of the other's calling, that nothing may escape observation in the investigation. Every Certified Public Accountant should be well versed in the general principles of those laws governing the subject matter of his investigation.

When the attorney can say to the accountant that he desires to know if such and such things exist, and the accountant in turn knows the "signs"-or if he is in doubt is yet sure enough to present to the attorney all (note, I say "all") suspicious signs, then is there complete union between attorney and accountant, and they stand in proper relation to produce for their mutual clients that for which they take their money. Nothing short of this will do, and much more can be required.

As we know it has, in the past, been the custom to think of the lawyer as the only one to go to in time of trouble, likewise, we have seen the public accountant was first heard of as one appealed to for assistance

in unraveling the mysteries of fraudulently kept books. In fact, the only histories or accounts of your profession I have been able to find in public or reference libraries has had to deal alone with this phase of your existence. As speculative commercial interests have increased, so has the demand for your services, and in all such instances, your services have been as efficient as those of the attorney in unraveling these hidden mysteries and bringing the criminal to justice and in returning the rightful owner, in part or in whole, to his lost property. At least, you have usually been able "to tell him how it was done." That, sometimes is consolation.

Many statutes passed have contained special provisions for the employment of a Public Accountant at the expense of the estate, and history shows us that during the last century whenever there have been periods of financial panic, your numbers have increased and the standing and need of your profession have been strengthened and demonstrated. Your services will always be required in times of panic and failure as will those of attorneys, but all of this has to do with destruction not construction.

Means had to be devised whereby vast resources could be developed and used in common venture and risk, and yet with limited liability. The great and only medium to accomplish this was the "corporation," which organization, its life, existence, government or control and use, is the greatest and most prominent question before the world for consideration at this time.

No one has had or will have more to do with its existence than the attorney and accountant.

Do I hear, "What about Legislation?" Yes. But each legislative act must pass the scrutiny of some lawyer, as a judge. They (these corporations) have come to stay, and their chief nurse and attendant has been and will ever be the certified public accountant.

Such a machine cannot exist without money. This life blood flows through many arteries constructed by lawyers; these arteries have many gates in the keeping of the public (many people). These arteries must be properly arranged so as not to clog, for if they do, and the public does not receive the returns, death is sure. It is the certified public accountant who frequently examines the pulse of the patient and gives the result, locates the spot of congestion, which, if it is a healthy infant, is quickly cured and often saves the life of the weak, or the final destruction of the apparently indestructible organization. As the company grows, it is this accountant who by myriads of figures condensed into a few lines tells where it is possible and safe to grow and expand. It is this accountant's annual or semi-annual bulletin that satisfies the investor and creates and maintains public confidence.

I understand that it is approximately within the last fifty years that there has been anything like permanent organization among your profession in the different countries of the old world, and it is a significant fact that your Association was formed in the year 1887, the same year as the passing of the Interstate Commerce Act.

Interstate Commerce and its growth has made possible these great industries and has brought into prominence and is daily increasing the requirements of your profession. It is the development of Interstate and Inter-World commerce that is presenting the greatest questions for accountants to solve.

It has been my fortune for the last ten years in perhaps a small degree, to have somewhat to do with the development of these large commercial enterprises. These consolidations, so termed, I know and you know; everyone knows who has had any experience, or he can and will know upon a moment's reflection, that it is a physical impossibility to conduct these transactions without records and system. And the basis of these organizations are accurate accounts and systems lawfully constructed and conducted.

Is there anything more inspiring than to visit the office of one of these great industrial enterprises and have the president, without effort and in perfect ease and assurance, discuss with you in an intelligent manner any policy pertaining to the business? To do this he must know the bank balance, the daily receipts and disbursements of moneys, the daily receipts and consumption of raw product, manufactured product and shipments, the cost of the completed article and each of the ingredients; the assets and liabilities of his organization analyzed into present and future value and the entire markets of the world. But this is not all. Our wonder increases as we realize that each of these items is subject to daily change, and this information, which enables him to deal with you, is gathered from hundreds of mills and mines thousands of miles apart. How is this officer, who seldom, perhaps never, has seen any of these places, able to at once inform you to the fraction of a cent concerning the cost of each article and each part of it in each stage of development, and then add to this the total sum of innumerable items the fixed or overhead charges, which must be added before the profit can be figured?

It looks simple to the novice to run an automobile. Within half an hour he masters the wheel and with his friends starts out for that glorious ride which he has enjoyed so often as the guest of another. Alas, it stops. Perchance, there is a wreck. He is helpless. Why? The experience of the man with the automobile is similar to that of those who have attempted without accountants to handle these industrial enterprises within the last few years, and it is a wonder that more accidents have not happened on our public streets and in our financial enterprises.

How can the attorney pass upon the value and formulate these gigantic enterprises and keep them out of losses and law suits without this information?

Time and your patience will not permit of me to continue longer. I have but hinted in a vague manner at the volumes which remain untold. This discussion in its ramifications can be made as interminable as your figures seem to a novice who first employs you at $50.00 per to establish these systems in his business and make the figures incident thereto.

I will not further trespass upon your time but content myself with the