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to justify the belief that the expectations of the Council that the Association would make a permanent appeal to the profession in this country are more than likely to be realized. The degree of success which a foreign professional organization can obtain cannot, of course, be measured by that of a native institution.

In establishing its American Center, the Central Association of Accountants did not desire in any sense to place itself in competition with any of the native professional organizations. It is obviously the duty of every man to support his native institutions first, thereafter extending his patronage or support in such other directions as he may consider will best serve his interests. Moreover, it is scarcely likely that any foreign organization can offer to the native citizen all the benefits he may reasonably look for from his own institutions; but it is quite within the bounds of possibility that there may be some advantages and benefits to be derived from alliance with a foreign professional body, though the determination of this must of course rest with individual applicants considering prospective membership. To a native professional practitioner, for example, whose sphere of operations is very limited, a foreign organization could offer few advantages, and to such, therefore affiliation with the Central Association, or any other foreign body, would not be very likely to appeal. On the other hand, in the cases of those practitioners whose operations are on a larger scale, and whose connections are more widespread, the benefits of foreign affiliation will be more readily appreciated.

The primary objects of establishing an American Center of the Central Association of Accountants was to place at the disposal of practicing accountants in the United States of British birth or origin the advantages to be derived from affiliation with a parent body; the success which has attended the establishment of other centers in the various British colonies and possessions seeming to warrant such a step in this country. When later it was decided to extend the privileges to citizens of the United States who could qualify and who were willing to subscribe to the rules and regulations of the Association, and so gradually to endeavor to bring its work and aims to the notice of the entire Englishspeaking race, it was not anticipated that the project would appeal to all in quite the same sense in which a similar invitation from a native professional organization to recognized practitioners in their own country might reasonably be expected to appeal. Indeed, except perhaps in the case of a few practitioners whose connections are sufficiently widespread to extend outside the boundaries of the United States, it is perhaps a question whether any special advantage would accrue to the American practitioner from affiliation with a foreign accountancy organization.

As having some bearing on this subject, however, it may be of interest to mention that there is at present a movement on foot in England to obtain parliamentary legislation to regulate the practice of accountancysuch proposed legislation being intended to establish a scheme of registration on lines similar to those governing the legal and medical professions. The effect of such legislation would, of course, be to define the status of the public accountant and auditor and give him official recognition as a licensed practitioner. All the members of properly incorporated British bodies of accountants existing at the time the act is passed would be admitted to registration simultaneously-admittance to registration thereafter being only obtainable by passing the prescribed examinations.

It is obvious, therefore, that under the above plan practicing accountants in the United States affiliated with any incorporated British accountancy organization would be admitted to registration whenever the legislation above referred to was obtained and became operative; and it is a logical conclusion that the certificates of accountants practicing in the United States and admitted to registration in England would then be accepted in the latter country without question.

Book Department. AUDITS, by Arthur E. Cutforth, A. C. A., London, 1908. 151 pages.

Price $2.00.

This book in the words of the author “has been compiled ... to lay down

the main duties of auditors and the principles affecting their work. Secondly, regard has been had to the needs and requirements of students for examination, in the choice and treatment of the subject dealt with."

This is not a treatise containing a great many original ideas; in fact it is rather a compilation of the ideas of Mr. Pixley and Mr. Dicksee, respectively, in a condensed form, giving information as concisely as possible. It is very doubtful whether American students of accountancy could advantageously use this book, in view of the admirable American edition of Dicksee's Auditing. Practitioners may find some parts of use, especially those portions which are stripped of Acts of Parliament or law reports.

There is this much to be said in favor of this edition: The subject matter is very clear, and it is arranged in a systematic, consecutive order. It is brief and concise where the case demands it, yet expanded where important items occur. In contradiction to most books on auditing, this little volume contains quite a number of forms in the shape of specimen accounts of various concerns, such as Banks, Building Societies, Gas Companies, Insurance Companies, Brewery Companies, Mining Companies, etc.

CORPORATE FINANCE AND ACCOUNTING, by Harry C. Bentley, C. P.

A., Legal Notes by Thomas Connyngton. New York, 1908. 525 pages. Price $4.

The book treats of corporate finances and securities; the corporate books of account; reports; negotiable instruments; and the powers, duties and relations of the corporation treasurer.

While the term Accounting is prefixed to the title of the book, it is hardly justified. Out of its 525 pages, not more than about 140 pages are devoted to Accounting proper. The forms given are of little help inasmuch as they are in such miniature form as to be hardly distinguishable.

The two points mentioned do not, however, reduce the value of the book. A reader will find in it a good deal of reliable information, and, what is important, will find it arranged for ready reference.

The part treating of “Negotiable Instruments " is admirably arranged and classified for study as well as for reference, and will be found useful not only to students of accountancy or to professional accountants, but to business men as well.

The various duties and responsibilities of corporate officers are well described and the description is in clear and untechnical language and in practical form, very desirable for corporation officers. The manifold definitions pertaining to corporate securities, accounting, etc., are all treated in accordance with modern principles.

To sum up: The author is right in his statement that this book is “ A reasonably complete manual for the use of the corporation treasurer and for all others interested in corporate finance and accounting.”

LEO GREENDLINGER. THEORY OF DOUBLE ENTRY BOOKKEEPING, by C. M.Van Cleve. New

York, 1907. 59 pages. Gratis.

In this little pamphlet the author attempts to explain the underlying principles of the relation of accounts in the double entry system of bookkeeping. The substance of the author's theory, as we understand it, is that the owner's (proprietor's) account should be used in connection with each transaction. A cash sale of merchandise when recorded, Cash to Merchandise, is incomplete. It would, according to the author's reasoning, be more correct to have it read: Cash to Owners, and also, at the same time, Merchandise to Owners. In other words, he would debit and credit the proprietor's account in connection with each respective transaction. Though it seems to us doubtful whether Mr. Van Cleve's explanations would be accepted by most skilled accountants without adverse criticism, yet his sincerity of purpose is evident, and his attempt to find a new basis for double entry accounts deserves due credit.

A C. P. A. Law in Ohio.

The Ohio Assembly passed on April 30, a “ Bill to Establish an Ohio State Board of Accountancy for the Regulation of the Practice of the Profession of Public Accounting.” The bill is substantially in the model form approved by The American Association of Public Accountants. Examinations are prescribed in the usual four subjects, “Theory of Accounts,” “ Practical Accounting,” “Auditing” and “Commercial Law as Affecting Accountancy.” The reciprocity clause is as follows:

SECTION 6. Any person who is a citizen of the United States or has declared his intention of becoming such citizen, over twenty-one (21) years of age, of good moral character, and who has complied with the rules and regulations of the board, and who holds a valid and unrevoked certificate as a certified public accountant issued by or under the authority of any other state, or of the United States or the District of Columbia, or any territory of the United States, or by or under the authority of a foreign nation when the board shall be satisfied that their standards and requirements for a certificate as a certified public accountant are substantially equivalent to those established by this act, shall receive from the board a certificate as a “certified public accountant,” and such person may thereafter practice as a certified public accountant and assume and use the name, title and style of "certified public accountant” or any abbreviation or abbreviations thereof, in the state of Ohio.

Current Magazine Articles.

The periodical literature of business is enormous in volume, but not impressive in quality. Too much of it is mere gossip or disguised advertising or superficial rehash of what sensible business men already know. But among the chaff there are always a few grains of wheat which ought not to be allowed to go to waste. It is the purpose of this department to pick out and summarize some of the articles that are worth attention. As no one man could possibly cover the whole field, the editor will be grateful to any one who will take the trouble to call his attention to articles that have been found useful.

Who is responsible for the Crisis of 1907? Professor A. Piatt Andrew of Harvard in the April number of the Bankers' Magazine gives his conception of the causes of the late crisis.

Secretaries of the United States Treasury previous to Messrs. Gage and Shaw, he states, had used the national banks as depositories only in exceptional cases and had regarded the Federal Treasury and Sub-Treasuries as the normal custodians of the national funds. It was not until the administration of Secretary Gage that the Treasury's policy was influenced by the rate of interest prevailing in the financial centers, and by the condition of the stock market. In 1898 the Government deposits with the banks rose from $29,000,000 to $95,000,000, and, again in 1899, to $111,000,000, which was almost double the maximum reached under any previous Secretary.

The change in policy foreshadowed and initiated by Secretary Gage became a full-fledged reality with Secretary Shaw. The independent Treasury system became practically extinct. Mr. Shaw apparently could conceive of but three evils in the financial world: high interest rates, a decline in the prices of stocks, and a contraction of credit; but these evils, in his opinion, were so serious that they were to be corrected at whatever cost.

In 1902, he went so far as to offer to accept other than Government bonds as security for deposits of public money, in the hope that he could stimulate an enlargement of the public deposits and of the note issues at the same time. Also he made cash reserves against the holdings of public funds in depository banks unnecessary.

He then announced that he would deposit Government money with any bank which engaged to import gold, so that interest would not be lost in transit. The effect of this policy has been a constantly expanding banking credit. Nearly a billion dollars was added to our supply of gold and about three hundred millions to our bank circulation. A considerable part of the increase passed into bank reserves and naturally formed a basis for enlarged credit. The community's credit, as registered in bank deposits, had increased far more rapidly than the money supply.

One of the reasons for this anomalous condition unquestionably was that Mr. Gage and Mr. Shaw had for the greater part of ten years resisted, with all the vast resources of the Government Treasury, the natural tendency of interest rates to follow the rising level of prices. They had, in fact, succeeded in keeping the money rate of interest below the rate which would have been "normal" or "natural" with a depreciating currency. They had helped to raise the tower of credit to a tottering height, and the slightest agitation of any sort was sure to bring collapse.

Secretary Cortelyou, in Professor Andrews' phrase, “out-shawed Shaw.” The policy inaugurated by Secretaries Gage and Shaw was of necessity carried on by Cortelyou. The fiduciary structure fostered by his predecessors began to waver and the only remedy consisted of stronger doses of the same medicine.

Such is the story of the Treasury's decade of paternalism. Beginning modestly under Secretary Gage, it developed flamboyantly under Secretary Shaw, and has reached its logical and helpless end under Secretary Cortelyou. The completed record of these ten years shows very clearly the importance for the future of again divorcing the Treasury from the money market.

Standardizing Purchases.

In a paper read before the New York Railroad Club and printed in the Railroad Gazette for May 1, 1908, Mr. W. V. S. Thorne, Director of Purchases of the Union Pacific System and the Southern Pacific Company, explains how the Harriman railroads buy their materials. As a study in systematic economy the paper is well worth careful reading. Mr. Thorne says:

The company realized the importance of selecting definite, uniform standards of the best practicable designs for many articles used in large quantities by the different departments. In numerous conferences, the chief officials of each department have recommended exactly what many of these standards should be. Decisions have been made after considering the advantages from a mechanical and practical as well as from a commercial point of view after opportunity has been given for argument or suggestions from many experienced and technical men, who have used or manufactured the devices or material in question. When formally approved by the Director of Maintenance and Operation, they have thus been adopted as common standards for all the associated lines.

This method has been found to work most satisfactorily in practice and without too much red tape to be objectionable.

Some advantages of this system to the purchasing department are as follows: The variety of similar articles to be purchased is reduced to a minimum. Many standards for all the associated lines being uniform, stocks of material carried on hand at different points are interchangeable to a much greater extent than formerly, and in case of emergency material can be drawn with little delay from other than the usual store houses, thereby avoiding the necessity of carrying as much on hand as formerly.

When competing manufacturers are furnished with carefully prepared specifications, and the necessary drawings also showing exactly what is wanted, they are then able to figure the closest prices they can afford to name without having to make any allowances for uncertainties. In designing all types of common standard freight cars the principle was strictly adhered to of using identically the same parts in different types of cars wherever suitable, in order to minimize variety and to have as many parts as possible interchangeable. This plan is not only of great advantage to the railroad companies from a maintenance point of view, in facilitating the making of repairs without delay, but it also lessens the variety, amount, and value of material necessary to carry in stock.

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