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MONTHLY AVERAGE.

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10 Days 30 Days 60 Days 90 Days 4 Months 6 Months 7 Months

2.354

966

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Daily Sales Feb., 1907

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900

251

5,000

5,000

6,756

59

6.756

3.992

6,816

10,808

9

2,498

1,676

2,498

679

3,930

4,856

8,786

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12

5,783

5.783

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13

2,213

1,619

54

2,213

400

2,221

4,291

16.512

12

13.024

14

2.733

2,705

2.733

206

10,327

5,645

15.972 13

47,916

15

10,053

3.521

10,053

2.733

13.577

16,310

14

65,240

16

2,221

I,420

136

2,221

136

2,872

4,213

7,085

15

35,425

17

5,010

2,134

5,010

274

7,425

7.425

16

44,550

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31.87) 318.930 | 100 Days from Feb. 1, Due May 12, 1907.

FORM A.

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months is 30 days or one full month. That is, if the focal date month is January and the next month February, it would be taken as one month. If the next month were April, the time would be taken as three months or one month's interest on the total crossaddition of February and three months' interest on April.

Now, the thirty-one columns under each day are added in the total for each day, and the footing covering all the months is made at the bottom of the columns under each day. As we have included the monthly interest in our summary, the daily amounts before the focal date are overcharges, while the amounts after the focal date are an undercharge. We get the interest on the daily amounts by multiplying each daily total by the time between the date and focal date and dividing by 30, as in the sales.

If the amount of the days prior to the focal date exceed the amount after the focal date, the difference between the two is the net overcharge and must be deducted from the monthly earnings. To get the average it is necessary to take 1/30 of 1 per cent on the total returns and allowances for the month (dollars only) and divide it into the interest earned. The quotient will be the number of days from the focal date on which it is due.

The compound average is the balance or net sale divided into the amount of the returns and allowances, multiplied by the number of days between the due dates, viz.:

Sales... ....95626 Due May 12, 1907.
Returns Allce's. 7485 Due Feb. 2, 1907.

88141

7485
99 Days
67365

67365 Net Sales Due May 20 741065(8 Days Adv. on May 12

The 1908 annual meeting of the American Association will be held next October in Atlantic City under the auspices of The Pennsylvania Institute of Certified Public Accountants. As this will be the twenty-first Anniversary of the National Accountancy Organization, a large attendance is assured and an interesting occasion looked for.

Another Fallacy in Bond Values.

BY ARTHUR S. LITTLE.

As every one knows, practically all corporation bonds, and a very large majority of the municipal bonds that are outstanding to-day, provide for semi-annual interest payments; or rather the coupons mature with that frequency, and it is for such bonds that the numerous editions of bond value tables that are in use to-day were prepared; in fact, almost without exception, at the head of each page, or at least on the title page, will be found the words: "Interest payable semi-annually." These various editions have come on the market at sundry times during the last twenty-five years or more, and differ more or less from each other in regard to price, scope, closeness of rates, etc., but upon comparing their contents it will be found that barring a few errors, typographical or otherwise, the corresponding values do not differ from each other beyond one point in the last figure at the most, and when we consider further that each author must have made his own calculations independently on account of copyright laws, it is safe to assume that the tables referred to are correct, or at any rate consistent, and constitute a standard of measurement to which the investing public has adapted itself.

However, the coupons on all securities do not mature at six months' intervals by any means. Monthly interest payments are not unknown; being frequently found in accounts, bank loans, installment loans, and car trust notes. Quarterly bonds are often met with, and possibly one-half of the dividend stocks make payments four times per year. Lastly we have bonds with annual coupons, which, although confined almost exclusively to municipal issues, nevertheless are to be found much more frequently than is generally supposed.†

Now upon consulting any of the ordinary tables heretofore referred to we will find the value given for a 6 per cent. bond running two years to yield 5 per cent., 101.88, and if we examine the

*This refers to the coupons only. The only tables of the earlier editions that I can recall where any reference was made to the income are those of Price, and N. W. Harris & Co.

† A careful analysis of the public municipal bond sales of the United States for the last two years seems to warrant the assertion that at least 5 per cent. of such issues are of this character.

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