audit, a chart in the hands of his representatives will furnish all the information and advice they need. To the student of accountancy charts should prove invaluable as the easiest, shortest, and most comprehensive method of study of that particular subject.

As no one system can be made to fit all businesses, charts must be prepared and arranged in accordance with the special requirements in each case. The charts should show in a condensed, easily comprehensible form all of the accounts necessary, with ledger folios and other desired information, classified in their proper groups. Each group should contain an additional account, which acts as the clearing house of that particular group. Each group is in the form of a large dial, with a small dial in the center representing the result in that particular group, which at the end of a period is taken to where the arrow points.

The application of this method is similar in all accounting, no matter whether government, municipal, bank, brokerage, railroad, manufacturing, or commercial. To illustrate, take C 169-Chart A. Group A contains all of those accounts which relate to production: the result of this group is the cost of production, which is then taken to Group E, or trading account. Group B contains the several sales accounts, the total sales to be taken to E. Group C contains all of those accounts which properly constitute the cost of selling, and whose result is also to be taken to E. Group D shows the cost of packing and shipping, also to be taken to E. After all of these items have been taken to Group E, the results are the trading profits, which are then transferred to Group H, or profit and loss.

Group F shows all of the accounts pertaining to office, management, and executive, the result of which is to go to Group H. Group G, reserve against bad and doubtful accounts receivable, completes those items properly belonging to Group H. The result of Group H is the net profits, which are to be taken tø surplus (Group I), out of which surplus dividends (Group J) are declared.

History of the National Credit Men's Association.

BY J. E. HAGERTY, PH. D.,

Professor of Economics in Ohio State University.

The Credit Men's Association can be traced to a Commercial Congress held at Chicago at the World's Fair in 1893. One section of this Congress which was presided over by P. R. Earling of Chicago, was devoted to the subject of credits. The chief paper presented, entitled "The Value of Signed Statements," was read by Mr. W. H. Preston of Sioux City, Iowa, who has since been prominently identified with both National and local Associations of Credit Men. But few took an interest in the Association and a committee was appointed to consider the advisability of organizing a National Association. On account of the crisis which followed, it was thought a very inopportune time to organize a National Association of Credit Men, and the matter was delayed. Finally in 1896, after several local organizations of Credit Men had been formed, arrangements were made for a National Association to meet in Toledo, Ohio.

When the National Association was formed in 1896 there were thirteen local associations in the following cities: Detroit, Cincinnati, Sioux City (Iowa), Portland (Oregon), St. Joseph (Missouri), St. Louis, Kansas City, Memphis, New Orleans, Louisville, Nashville, St. Paul and Minneapolis. Within three months after the National Association was organized, eighteen local associations were affiliated with it.

Opposition to the National Association came from three sources. (1) Mercantile Agencies feared that it might constitute itself into a reporting agency which would displace them, or that it would demand from them better service than they could afford to give. (2) Attorneys feared that it would be to their disadvantage in regulating fees, etc. (3) Retailers feared that it might be oppressive to them.

The purpose of the National Association was well stated in Article II. of the Constitution: "The object of the Organization shall be the organization of individual credit men and associ

ations of credit men for the purpose of making more uniform the basis upon which credit rests; to demand a change of laws unfavorable to honest debtors; and the enactment of laws beneficial to commerce in the several States; to improve methods of diffusing information and of gathering data with respect to credits, to improve business customs; and to provide a fund for the protection of members against injustice and fraud."

The membership was divided into two classes: (1) the organized membership, to consist of credit men representing individuals, firms or corporations, who may join through the medium of local associations; (2) the individual membership, to consist of credit men representing individuals, firms or corporations who may join the Association directly. The latter are from sections of the country where no local association exists. In communities where there are local associations affiliated with the National Association, the members of the local association represent it in the National Association. The organized membership thus includes the membership of all the local associations affiliated with the National Organization. At the Toledo meeting in 1896 is was estimated that the volume of trade represented by those present amounted to $213,000,000. The growth of the Association is indicated from the following facts. The organized membership in 1900 was 2,511, while the individual membership was 490, making a total of 3,001. This was an increase of 465 over the membership of the previous year. On the first of June, 1904, the organized membership was 4,528, and the individual 799, making a total of 5,327.* On the first of June, 1905, the organized membership was 5,085 and the individual 976, making a total of 6,060, or an increase of 557 organized and 177 of the individual membership over that of the preceding year. In June, 1906, there were 52 local associations which were affiliated with branches of the National Organization. Every section of the country is represented.

The Association meets annually and the work is carried on chiefly by committees.

The scope of the work is indicated by the names of the standing committees: Membership Committee, Legislative Committee, Business Literature, Committee on Improvement of Mercantile Agency Service, Committee on Credit Department Methods, *Monthly Bulletin of the National Association of Credit Men, July, 1905, p. 24.

Committee on Credit Coöperation, Committee on Investigation and Prosecution, and Committee on Fire Insurance. The last committee was organized recently.

From the outset the National Association and the local associations undertook the same kind of work. The interchange of information in regard to credit, to make credit men more intelligent, and to improve legislation in the interest of credit men were the early objects sought. Gradually plans were devised to place the organization on a broader basis and new standing committees were organized. Some of the local associations saw that their effectiveness could be increased and enthusiasm for them would be promoted by their undertaking practical work such as the organization of bureaus for the exchange of credit information and adjustment bureaus. The National Association has come to see that it must be organized on a broader plan, and as a recent president of its organization has said, "it must stand for the general improvement of credit conditions, act as a cement force between the various local organizations, be devoted to the ethical phases of credit, and act as an educational center of economic problems." While its work and that of the local associations overlap somewhat at present, the tendency is for each local association to undertake the decidedly practical work and to consider the problems of credit peculiar to its locality. The National Association is limiting itself more and more to the general problems of credit and is supplementing and coördinating the work of the local associations and is coöperating with them on general problems such as those of legislation. There is yet a Committee of the National Association on Investigation and Prosecution, but its experience seems to demonstrate that this sort of work can be better conducted by local associations where they exist. Here as elsewhere the National Association finds its chief efficiency in securing the coöperation of the various local bureaus. rather than in undertaking this sort of work itself.

The most effective committees have been those on Improvement of Mercantile Agency Service, Committee on Credit Department Methods, and the Legislative Committee.

From the outset the credit men manifested a desire to coöperate with the agencies in inducing merchants to make better reports. The National Association from the beginning

*F. W. Standart, Monthly Bulletin of the Nat. Assn. of Credit Men. January, 1905, P. 7.