distinctions among the terms "capital," "capital stock," and "share capital," and between the subscription to stock and the purchase of it from the corporation, distinctions which are of the utmost value in providing media of exchange for accountancy and law. Then there are the definitions of goodwill, fixed assets, funded debt and floating indebtedness, fixed charges, surplus and deficiency. In making these contributions to the science. of law, accountancy acts both directly and indirectly; directly through accountants as expert witnesses, indirectly through the suggestion of ideas to bench and bar, both of which are growing to recognize that the specialization of accountancy makes it more competent to deal with these matters than either of them. This influence moves in a circle, accountancy proposing the idea and law molding it into a rule which in turn binds accountancy. Hence, a heavy responsibility rests on accountancy not to inculcate in law unsound rules through which the profession of the future would be saddled with mistaken conceptions.

In accountancy's contribution to the art of the practice of law, the direct influence is the appreciable one. Much has been written about the use of accountancy in evidence but there is at least one distinction that has not been drawn. Books and records themselves often are introduced in evidence. A simple case is one involving the shop book rule, under which books kept in certain occupations are admissible to prove small trading items, provided the shop keeper had no clerk who might testify. A more complex situation is that in which are admissible book entries made contemporaneously with the transactions in the regular course of business by a bookkeeper whose only knowledge was from the reports or memoranda made by salesmen or teamsters. But be the case simple or complex, accountancy does not seem to be involved; the assistance rendered here is by bookkeeping alone. Practically the only use made of accountancy by law in this connection is through the expert. He is employed either to investigate facts before the trial, as for instance to determine whether a certain reserve is proper against an income bond holder or whether the earnings of a railroad are such that a rate regulating statute would operate to deprive it of its property; or he is employed to present to the court conclusions which only an accountancy expert could draw from facts already in evidence, as for example the effect of certain book entries on

the business condition of the person making them. Hence many avenues of fact opened by means of books and records are not contributions by accountancy. Sometimes accountancy aids law through the disclosure of unsuspected evidence. For instance, in the course of an audit, it might be discovered that A has signed notes of the X Company as president when in fact B was president. Here a case of forgery could be made against A, which could not have been considered had not accountancy turned up the evidence.

Thus may be defined the new reciprocity of accountancy and law. For the future, more and more will the two professions be called on to co-operate in the constructive movements of business organization and legislation. No longer can the lawyer be the sole adviser of the organizing or reorganizing industry or of the legislative committee contemplating business enactments. His function is still to declare what may be done, but the accountant must have equal voice in advising what can be done.

BY ARTHUR S. LITTLE.

St. Louis Merchants Bridge 6's run 40 years from February 1, 1889, but contain a clause giving right to redeem at 110 on or after February 1, 1909, and several years ago certain conditions arose which made it seem to be a foregone conclusion that this option would be promptly exercised. About the same time a firm of bond dealers who happened to have some good sized orders in these bonds requested me to make a few calculations for them, showing what rate of income the bonds would afford at the prices that were then prevailing, working on the theory that the bonds would be called at 110. This was the nucleus of an extended set of calculations of this character which were later published and offered to the public. The issue being small and the bonds closely held, the market for such a publication of course proved very limited. On the other hand they were as far as I know the first bond values of that kind that had ever appeared in print, and their unusual nature seemed to awaken more or less interest among many who had them brought to their attention; in fact I have some reason to suspect that several orders that I received (the price was nominal only) were prompted by curiosity rather than any real need for the tables.

These particulars of an unimportant and purely private mercantile enterprise are of course not supposed to be of interest to any one, and I have merely cited this incident as a convenient and concrete statement of a general proposition, viz., the valuation of bonds that are expected to be redeemed before maturity at a definite premium, believing that some new lines of thought on the subject in keeping with my text may be found in a detailed analysis of a representative portion of the tables referred to, which I shall endeavor to make by answering in full a few questions that were put to me at that time.

As I recall them they were mainly of this nature:

"Are they right?"

"Can they be right; i. e. yield a uniform rate with return of principal under these unusual conditions?"

"How am I, who know nothing about your 'seven place logarithms' to satisfy myself that they are right? " "How did you figure them?"

The following are the values that appeared in the 4 per cent. income line:

Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. 1908 1908 1907 1907 1906 1906 1905 1905 1904 110.78 111.55 112.31 113.05 113.77 114.48 115.18 115.86 116.53

Assuming that an investor has on August 1, 1904, bought $100 of these bonds at 116.53, we will now proceed to show without resorting to any Black Art * tactics that the tables are right" and that the bond will "pay" him 4 per cent.

But there is no use in attempting, for it cannot be done— at least in a straightforward manner. His head is too filled with the following false concepts:

That he has just bought a bond for $100;

That he has paid a premium of 16.53 per cent. therefor;

That the bond bears 6 per cent.;

That a premium of 10 per cent. will be paid him;

That every six months he will collect $3.00 " interest."

And as long as he is in this frame of mind there is as much chance of making him see where the 4 per cent. comes in as there is of setting the American people right in their perverted conception of the significance and circumstances connected with Vanderbilt's "The public be damned."

One time there was a man who after having made a series of losses through speculation, decided to quit the market entirely, and upon closing out all his trades found himself indebted to his brokers to the amount of $5,826.50. He was not in a position to pay this amount all at one time, but a mutually satisfactory agreement was made by which he deposited with them as security $6,000 choice 5 per cent, municipal bonds that he owned

*The average popular conception of LOGARITHMS. This deplorable and widespread ignorance of such a simple and important matter is due almost entirely to the contemptible modern educational methods. Full attention is given to teaching the life and works of Robert Southey; no end of the precious time of young folk is wickedly wasted filling their minds with a worthless and soon to be forgotten smattering of Greek; their growth is stunted, their lives shortened and classes broken up with the horrors of Cube Root, "Partial Payments" and other useless and impractical matters, and any time that may remain is fully taken up with attempted interpretations of hasheesh dreams concerning bounding hares and leaping greyhounds, or cisterns with seventeen drain pipes of varying diameters. Thus is the future generation of men and women allowed to enter life and grow up, live and die in absolute ignorance of this divine gift to mankind, which deserves to rank with the mariner's compass or the electro-magnet as a factor in the advancement of civilization, progress and enlightenment. Nevertheless about the least distorted conception of the subject, even among intelligent and educated people is that to understand or use logarithms, a complete collegiate course in higher mathematics is essential; which is about as correct as the statement that a profound knowledge of chemistry is necessary in order to be able to scratch a match and light a fire!

and did not wish to sell. It was also agreed that until further arrangements were made he was to be charged interest on balances at the rate of 4 per cent. per annum compounded semiannually, and that the proceeds of the semi-annual coupons from the municipal bonds were to be placed to his credit as collected. It happened that these coupons matured on the same dates on which interest was charged; consequently after matters had run along in this manner for 42 years his account stood as follows:

Meanwhile he had been receiving statements regularly, which he had verified, and upon the receipt of the last one, being struck with the coincidence of his balance reducing to a round amount,