with the original claim and the voucher, each designated numerically, and further so as to show clearly the purpose and effect of the payment. Voucher number is also entered after "Authority," and check number is entered on voucher.

The cashier is provided with a revolving expense fund of $250 and a revolving labor fund of $5,000. At the end of each day he is required to make a report of checks drawn that day, of time checks paid, and of the disbursements made from the revolving expense and labor funds.

It appears from this that all vouchers must bear six separate authorizations in addition to any indorsements that may be necessary from representatives of the committee actually engaged in relief work. It is possible that this machinery has moved with exasperating slowness, but on its face the system appears admirably adapted to serve the purpose desired, to prevent waste and misuse of funds, and to preserve in logical order a record of all transactions.

Accountancy the Profession of Business Administration.

An accountant well known in street railway circles was recently auditing the books of a large corporation. The company purposed to make certain substitutions of equipment which was considered out of date and therefore unfit for service. The accountant, finding that this equipment was still in working order and taking a conservative attitude toward the increase in the cost of plant which was proposed, made a report to the president of the company strongly urging the retention of the old equipment. The recommendation was referred to the chief engineer, who had no difficulty in convincing the president that the accountant's recommendations were not founded upon sufficient technical knowledge to warrant their being adopted. In this case the accountant went outside his proper field, and invaded the province of the engineer.

The same company had for several years been operating a pleasure park in connection with its transportation system, and while the enterprise was profitable when the resulting increase of

traffic was taken into account, the park account showed a large loss. One of the administration officials, impressed by the regular recurrence of these deficits, investigated the experience of other companies and came to the conclusion that the various amusement enterprises could be more profitably leased than operated. The result of the change was a return of 20 per cent. on the company's investment in the park. Here was an opportunity for the accountant. The problem presented was one of administration, with which, from his observation of other traction enterprises, he was presumably familiar. In this field he should have been ready to make suggestions and offer advice, and since he spoke from personal knowledge, to speak with the voice of authority, and to demand respectful attention. In this instance the accountant did not rise to his opportunity, but the instance serves to show that there is a dividing line between mechanical technique and operation, and that while the accountant is wasting his time when he invades the engineering field, the province of business administration is one in which it is both necessary and proper that he should further the interests of his clients by placing the results of his wider observation and experience at their service.

We have discussed this proposition with a number of accountants and find a general recognition of its truth. All are apparently agreed that the character of service above described can be rendered by the accountant, that it is a highly important service, and that it is a character of service which can be rendered by no other profession than the profession of accountancy. Some objection is made that it is not fair to a client to use information gained in the examination of the books of his competitor. With equal force it might be urged that the engineer and the lawyer should refuse to utilize the results of their experience in the practice of their respective professions. The accountant must qualify as an expert in business administration and control. Many accountants already occupy such relations to their clients, and it is only a question of a few years, in our judgment, when the profession of accountancy will be recognized as in full possession of this field.

Accountants Confer with Insurance Commissioners.

The Executive Committee of the National Association of State Insurance Commissioners held daily meetings during the last week in June at the Hotel Manhattan, in New York City.

One of the principal subjects receiving the consideration of the Commissioners, on which the Executive Committee intends to make strong recommendations, is the adoption of uniform blanks to be used by the Insurance Companies in making their annual reports. It is also expected that a general rule will be adopted requiring the various companies to file a detailed gain and loss exhibit yearly.

In these connections, as well as with a view to recommending a periodical audit of Insurance Companies by competent public accountants, Mr. A. Lowes Dickinson, Secretary of The American Association of Public Accountants, and Hon. William Harman Black, ex-commissioner of accounts for the City of New York, appeared in behalf of The American Association of Public Accountants before the Executive Committee at their session held on Tuesday, the 26th of June.

After a few introductory remarks by Mr. Black, who stated briefly the representations which had been made on the subject by the Joint Committee of The American Association of Public Accountants and the New York State Society of Certified Public Accountants, to the Insurance Legislative Committee at Albany, and also before the Commission appointed by the State of Massachusetts to recodify its insurance laws, and other State bodies, Mr. Dickinson proceeded to explain the urgent necessity, in the interest of the policy-holders and the public, of remodeling the existing forms on the basis of thoroughly sound accounting principles, and also the desirability for regular periodical independent audits by public accountants.

Mr. Dickinson explained the respects in which the forms which had hitherto been in use were totally inadequate to a proper presentation of actual conditions, and really were responsible for the failure of the State Department to gain knowledge of the depredations revealed by the recent investigation.

As Mr. Dickinson's firm was one of those which had been engaged on the investigations of several of the big insurance companies, the Commissioners manifested considerable solicitude as to the extent of the detail connected with the work undertaken.

In explaining the lines on which the investigations had been conducted, it was pointed out where, in certain instances, a detailed examination had not been made covering the entire period under review, but that exhaustive tests extending over periods selected at random had been made to determine the presumptive accuracy of the whole work in question. This intimation led one of the Commissioners to inquire whether it was not possible for defalcations to have occurred during the periods which had not been subjected to detailed examination and consequently remain undiscovered.

Mr. Dickinson admitted that such an occurrence was perhaps possible, though most improbable, and in any event the method adopted could not fail to detect any systematic continuous defalcations, but an isolated case chancing to have occurred during the period not examined in detail might, of course, escape detection; nevertheless, such an independent audit would establish the fact whether or not the system of internal check was adequate and properly carried out.

The matter of expense in connection with audits of the character under discussion was also one in which the Commissioners evinced deep interest, and in response to their questions Mr. Dickinson specified the terms upon which his and other prominent firms usually undertook this class of work; but when requested point blank to mention the amount which had been paid to his firm by each of the Companies which had engaged them, he said he felt that, in view of the fact that the Commissioners possessed facilities for obtaining information of that nature for themselves, he could consistently exercise his privilege to abstain from making statements on personal and confidential matters. Furthermore, assuming that the point of the inquiry was correctly understood, the question lacked relevancy, since the 'present instances afforded no criterion, seeing that they constituted special audits, which can bear no comparison with annual audits.

The Commissioners then sought to ascertain why, if periodi

cal audits were necessary, and should be decided upon, they should not be undertaken by the State Departments at the expense of the Companies audited.

Mr. Dickinson enumerated various reasons why such a course would be infeasible and fail of success if attempted, several of which reasons obviously could not be the most complimentary to those from whom the suggestion emanated.

The principal reasons advanced were:

I. The great moral effect resulting from an absolutely independent audit by recognized public accountants would be lost.

II. Neither policyholders nor the general public would accept a certificate of the State Department with any such degree of confidence as they do that of independent public accountants of high repute.

III. The prospect of the State Department being any more free from political influences in the future than has been the experience in the past, is very remote.

IV. The State Departments are not in the position where they would necessarily suffer the sacrifice of a high professional reputation and standing as the penalty of carelessness, incompetency or dishonesty, as in the case of public accountants.

V. Experience goes to show that State Department Chiefs, their deputies and assistants are not (nor are they supposed to be) trained auditors or skilled accountants, and consequently are not properly qualified to pass on the proficiency of the accountants which it would be necessary to engage.

VI. The State Departments would have difficulty in obtaining, and could not maintain, an absolutely efficient staff organization, which would be necessary to conduct such audits expeditiously and at a time to permit of the Companies publishing the accounts within a reasonable period after the close of the fiscal year. Moreover, leaving out the question of the difficulty of finding and retaining really first-class men, in point of intelligence, ability, experience and morals, and trained in the work they would have to undertake, the remuneration which the State could afford to pay, based on prevailing standards, would not offer inducements equivalent to what could be procured in professional channels.

VII. The best efforts and results could not be obtained from men whose occupation confined them solely to handling in