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Les diagrammes suivants illustrent la mAthode. 1 2 3 4 5 6 / ^xpert Bool^-I^eepi^^, A PRACTICAL WORK For the use of Business Men; Shareholders, Directors, Officers, Auditors, &c., of Joint Stock Companies, Associations, Societies, Municipalities, &c., and for advanced students in the science of accounts. BY ©. A. FLejVIIISfQ. Principal or the northern business Colleqe. A member of the institute of Chartered Accountants of Ontario, Author of ^'The Laws of Business," '' Practical Maisuratio,,;' ^^ How to Write a lUisiness Letter;' Thirty Lessons in PunctuatioHr ''Self- Instructor in Penmanship^ ir-c. OWKN SOI'M) : Printed and I'uhlished at the Nortbcrn Ikisiness College Steam Press. 1 Hl»'_'. Entered according to Act of the Parliament of Canada, in the year one thou- sand eight hundred and ninety-two, by C. A. Fleming, in the Office of the Minister of Agriculture. PREFACE. This work is an advance text hook on Book keeping intended principally for the use of officers, auditors, and shareholders of Incor|)orated concerns, business nit-n gen- erally and students who have studied the ordinary texts on this subject. It deals very largely with Joint Stock Companies and other corporations as to their formation, incorporation, government, management, liook-keeping, &c. It also contains a large anv)unt of practical informntion as to partnerships and settlements of varici, , '-inds, investments, and of expert hook-keepers' work in dealing with Reserve Funds, Balance Sheets. Auditing, Li(|uidation of Corporations—useful alike to hook-keepers, auditors, and all persons seeking a thorough knowledge of accounts. There are a lar^e number of forms of special liooks exemplified, and much descriptive matter relating to the special hooks and to accountants' work generally. For a general idea of the work, the reader is referred to the short table of contents on next page. F'or easy reference to any forms of books, documents. &c., we have appended an index of forms on page 333, and to enable the reader to refer readily to any subject treated in the book, a complete index has been placed at his di. >iosal, beginning on page 334. The author submits this work as the result of many years experience as .a teiuher of Book-keeping and as Book-keeper, Auditor and Consulting Accountant for all kinds of Monetary, Insurance, Tr.iding, Mercantile, Manufacturing, Contracting, and Kleemos\nary Corporations, Partnerships, &c.,and while he has found all kinds of work— good, had, in- different, and very indifferent, while attending to his duties as a professional accountant, he hopes that the perusal of this work may aid in saving the work of the book-keeper, and in bringing about a better style of hook-keeping generally in incorporated and unin. corporated concerns. NORTHKKN Bi;Sl.\K.SS CoLI.KllE. June i^th, 18(^2. TABLE OF CONTENTS. ("orpiiratioiis — Division of 'The Dominion Dompanics Art (Questions on ihe Dominion Act The Ontario Joint Stock Companies Act and Amendments Pai.f. 5--^ 7-23 24 — 26 27—45 Qucstif)ns on Ontario Acts • • • 46—4^ The formation and incorporation of a Joint Stock Company, with forms of Application, Afl livits, Special and Ordinary Hooks, Oovernment Report, Balance Sheets, &c., all fully exemplified 49 "• « ' 'l"hree additional examples of Joint Stock Companies including Manufacturing, Clontr.icting, and Steaniboating. with special hooks adapted to each 113— M3 MiscHlaneous information relative to Joint Stock Company work, Trial Balances, Halance Sheets, and Statements, Reserve Fund?, Rest Account, Liquidation, Amilgamition, Incorporation, under twelve different conditions. Finding errors in trial balances, &c., giving special forms of books for Stock Ledgers, and Ceneral Ledgers >44-2'9 Insurance, mcluding the Hook-keeping for insurance companies with special forms of books 220-240 Loan Companies, and iJuilding Societies with Hy-laws and Special Hooks adapted to the .same 241—268 Cooperative Associations 268 270 Hooks suitable for Manufacturing .... .... . ■ • • • • • ■ • • • • 270-277 Hanking, both gener.al banking under the liank Act and Private Hanking 278—290 Municipal Accounts 291 — 298 Book-keeping for Churches, Associations, iSic, with Special Books 299—305 Warehousing, with forms 305—308 Hooks for medical men 309—310 l'artnershi|), including ijrnblenis, eic. ... .... • . . • • • • • • • • • 3' ' 320 Settlements with Branch Houses, etc., with ^)roblems 32 » 323 Investments, includmg compound interest tables and numerous exercises . . .323 — 328 328-331 Auditing Private marking of goods Index of Forms of Books, i\:i (k'oeral Index ... Advert senienis 333 •334—336 33» * aOTSFOie-A-TIOiTS. Pai.k. 5 --6 7-23 24—26 27—45 46 — 48 ;ion, &c., 49-1 1 a ring, 113 — M3 ices, tion, rrors ncrul 144 2 '9 "oruis 220 — 240 pted 241 — 268 268 — 270 270-277 278-290 291 — 298 299-305 305—308 309-310 3,1—320 321—323 323-328 328-331 • 332 333 334-336 338 A Corporation is an association of individuals formed and authorized by law, com- petent to act as a single person, to buy and sell personal property and real estate, to enter into contracts, to sue at law and be sued. It also has the legal capacity if perpetual succession, that is, the death of one or more parties so joined together docs not dissolve the Corporation. Corporations obtain their power to exist and act from government; this power is called a Charter, or Ix^tters Patent. In Canada for local purj)oses a C!harter is usually obtained from the Provincial Legislature. In such case the place or places of business of the Corporation shoulc Ik; within that province. A Charter from the I )ominion Oovernment is necessary for certain cor}>orations on account of the nature of their business and by others on account of the extent of their field of operations. A Charter may be granted in two ways: ist, by Special Act of Parliament, or 2nd, under (Jencral Acts of I'arliament. Corporations nia\ be divided as follows : — Puni.u;. PRIVATK. Kl.KKMOSVNAR\. Quasi. Public Corporations are created by (jovernment for political puri)oses such as Cities, Counties. 'I'he.se have subordinate legislative powers to be exercised for the public good. Private Corporations. This class embraces all business and trading companies such as carry on Banking, Insurance, Lumbering, Railroads, 'I'elegraphs, Electric Lights, Factories, Newspapers and other business enterprises. This is the class we jnirposc deal- ing with principally in this work. Eleemosynary Corporations. These are corportions formed for charitable purposes such as the founding and carrying on of Hospitals, Homes for infirm persons, Schools, Colleges, &c, Quasi Corporations arc such as have powers that are generally recognised though not by Act of Legislature, such as School Sections, itc. Private Companies that carry on business differ from Partnerships in that the death of a partner dissolves the partnership. When a death occurs in one of the members of a company his legal representative takes his place. In a i)artnership one [)artner may own the capital and another the experience, or a partner may have any ])ortion of the ownership of the capital. In the comjjany the capital is divided into equal f>ortions called Shares and any person being a stockholder must own one or more shares, .\nother point of difference is that in a partnership the partner's private property is liable for partnership debts after the property of the partnership has been all taken and the debts are only partly satisfied, while in a company the stockholder is only liable for the the amount of stock he subscribes for, and if this has been paid up he is not liable any further for the debts of an insolvent company. There is one exception to the above and that is in Banking Companies the stockholders are liable for double the amount of their stock. 'I'hc amfuiiit of llie shares into wliidi tlii; capital of tlic larger companies are divided is $100 each. 'I'he . itmed their names for. The amount of the .stock taken. This might he all the .\uthorized Capital or it might he a very small portion of it. Paid up Capital. 'I'his is the actual working capital of the com|)any, sometimes called '"Cash Capital." This may he all the .\uthorized ( 'apital if it is all suhscrih-ed, or it may he all the Suhscrihed Cajjital or it might he only ten per cent of the .Suhscrihed Cai)ital. \ company might have .Authorized Capital, $3000: .Suhscrihed (!apital, $5000 (if all signed for); and I'aid up Ca|)ital, $5000 (if all jjaici up); or the .Authorized Capital, $5000 ; the Suh.scrii)ed CajHtal, .$100 ; and the Paid uj) or U'orking Capital, $10. Preference Stock is such as is issued to procure additional Working Capital and is given hy agreement with the original stockholders a right to the first division of profits e\ery year. i'".ach suh-secjuent issue of stock has a preference to [irofits over all previous issues ; a fourth I'reference .Stock would get dividends hefore a third, a third hefore a second, ^:c., and all the preference hefore the original stockholders. Guaranteed Stock is such that dividends at a certain rate must be i aid e\-cry year '■"ven out of the stock of the previous stockholders who stand as (luarantors. Calls. When the management of a company ask the stockholders to pay up a certain j)cr cent of their sui)s(rihed stock this is denominated •'makinij a C!all." I'or the proper understanding of the nature of a company, its powers, its organization, incorporation an'd management, its stock and calls, we give theCeneral .Acts for the Incor- ])oration of (lompanies hy hoth Dominion (Jovernment and the Legislature of Ontario, the first heing Chapter 119 of the Kevised Statutes of (Canada, and the latter, Chapter 157 Revised Statutes of Ontario diviilcd divided Lu'ording loik. Company I, $5000, ncrcascd he stork- {ht \n' all (jinciinH's crilifd, or uhscribcd ;al, $5000 d Capital, ital and is ofits c\ cry )Us issues : :ci)nd, &c., c\"cry ytar p a certain ■gani/alion, the Incor- )ntari(), the Iviptor 157 Tin: DOMINION rOMI'ANIKS ACT. An Act resportinj,' the inrorporntinn of Joint Sto< k (Companies hy Letters ^ ^ .„ I'alent. Her Majesty, hy and with the advice of the Senate and House of (lonuniins of (!anada. enacts as follows : — SHOUT TITI.i:. 1. This Act may he cited as " T/ie Comfntaiii. stating therein, (ii.) The proposed corporate name of the company, which shall not be \;„ne that of any other knijwn company, incor|)orated or unincorporated, or an)' name liable to tie confoundeil therewith, or otherwise, on public grounds, objectionable ; (.'.) The purposes for which its incorporation is sought ; Punmscs. ((". ) The place within ("anada which is to be its chief place of business ;tiiivf place of ((/. ) riie proposed amount of its capital stock which, in the case of a capUal ' loan comiiany. shall not be less than one hundred thousand dollars ; (c. ) The number of shares and the amount of each share : Siare*. 8 Nfiinc«, Kc, iipliliciinls. (/) Tlif names in lull and the address and eallinf{ of earh of ihe applic ants, with spec iai nienlion uf tlie names of not more than fifteen and not less than tliree of tlieir niiiMl>er, who are to Ite tlie first or provisional dire( tors of the company, and the majority of wliom shall l)e residents of (!anada. .|o \'., < . .\j^, s. 4. IVlliiiiii Tor 6. At any time, not more than one month after the last pul)li< ation of siK h notiee, the applicants may petiti in the (lovernor in Council, through the Secretary of State, for the issue of such letters patent ; 2. Su. The petition may ask for the embodying in the letters patent of any iiscriuii'i'i'ietTcrs provision which, under this Act, might be maile by by-law of the company ; '""""• and such provision so embodied shall not, unless provision to the contrary is made in the letters patent, be subject to repeal or alteration by by-law. 40 V., c. 4;,. s. 5. Whnl it «linll A certain niiiounl of <,tlH.k lllllst lie lakuii. Aiiil u curtain a UNI |>,iiii u|i lliurvuji. Ili^jHTrfil of ariMiiiil jiaiil u| Certain pro- ms may Ite Preliminary niaitcr. tii he c^la I >lie,l. Prtmf iif fads a^^erlel^. C. Ilefore the letters patent are issued, the applicants shall establish, to t!ie s.uisfaction of the Secretary nipany (wlu-tl\i'r nivcii \,\ tin- original or l)y Mlpllf.Unu.)'' Miltpliinentary letters intent, or on amalgamation) incorporated under this ii'i^m. A< t, is the same as the name of an evistin^ incorporated or uninc orpctrated com|iiiny, or so similar tlureto as to he liahle to he « onCounded therewith, the (loveriior in ( "oinu il may diret t the issue of supplementary letters patent, reciting the former letters and < hanniiv; the name of the ctjinpany to Mime other name wliich shall he set forth in the supplementary letters patent. »o\'., c. 4.'„ s. II. 11. U hen a company incorporated under this .\»ny may another n.une, the (".overnor in Count'' i")on hein^ satisfied that the (■|iaii(;e;|'|]||^" ''"'">!''"'' desired is not for any improptr purpose, i. dirLct the issue of >u|)plementary letters jiatent, reciting the former letters p. 'nt and changing the name of the companv to some other name, which sh: 11 l>e set forth in the sujiplementary letters patent. 40 V.. e. 43, s. 1 j. 12. No alter.ation of its lu'ne under tb" tv.u sections next preceding shall t iimnjenoi m affect the rights or ol)ligation^ of the cor.ip. ;iv ; and all pro< ceilings may he "[lfj'^',,1',',';,''''' "' continued or comn.. n< ed by or agai;i" ih'- company under its new name that might have heen continued or comiueiio 1 1 hy or against the companv under its former nanv. 40 \'.. c. 4,v s. 1,;. t t>in|);,ny aiithuri/t' • >r<, lo ap|. extensiijii in.'ty (iirecl- .ly f.,r uf .\|>|iliraii< >n liy N 01 ire ,if catliiii toll n|>(>li- t; vlivel. ()/>/(n'»i»X (If' Further Pimvis. 13. i'he compaii) may, from tiint; to time, hy a resolution passed liy the votes of shareholders rejiresenting at least two-thirds in value of the suhscr'hed stock of the <'ompany, at a special general meeting called for the iniipose, authorize the directors to ajiply for supplementary Utters ]>ateut jxtending the powers of the comjiany to such other purposes or ohjec ts, for whiih a company may he incorporated under this Act, as are defined in the resolution, 40 \'., e. 43, s. 14. 14. I'he directors may at any time within si.\ months after the passing of any sur 'iippie- supplenv.-»"ry letters patent uiuler the (Ireat Seal, e.xtcnding the liowers of ",!;,"1;','* ''^^'''''' the company to all or any of ;he objects defined in the resolution ; and iiotit e thereof shall be forthw .h given by the .Secretary of State, in the Canada Gazette, in the form 1! in the schedule to this .\ct, and thereupon. lO Nr llial luiriiuse. Ueiluclinii of I ajtilal l'r')\:si>: as to li>aii i;iiiiipaniL--<. I'ly-law for that pur|i»»se. Lia1)ility to rreilitors not atroiH-i!. Irnm the date of tlic supplementary letters patent, vhe undertaking of the roni- pany shall extend to and include the other purposes or objects set out in the sup|)lementary letters patent as fully as if such other i)urposes or objects were mentioned in the original letters patent ; and a copy of every such notice shall forthwith he. by the company to which the notice relates, inserted on four separate occasions in at least one newspaper in the county, city o. jjlace where the head office or chief agency is established. 40 \'.. c. 43, ss. 17 unJ 106. Iiiircasf or Keduction of Ctt/>ifn/, Cr-'c, 17. The directors of the comj)any, other than a loan company, may. at any time, make a by-law subdividing the existing shares into shares of a smaller amount. 40 \'.. c. ^t,, s. kj. 18. The directors of the company may, at any time after the whole capital stock of the company h.is been taken up and fifty per cent, thereon l>aid in, make a by-law for increasing the capital stock of the company to any amount which thev consider recpiisite for the due carrying out of the objects of the company : 2. Such by-law shall declare the number of the shares of the new stock, and may prescribe the manner in which the same shall be allotted ; and in default of its .so doing, the control of such allotment shall vest absolutely in the directors. 40 \'., c. 43, s. 20. 19. 'I'he directors of the company may. at any time, make a by-law ftjr reducing the capital stock of the company to any amount which they consider advisable and sutlicient for the due carrying out of the undertaking of the company ; but the capital stock of a loan com])any shall never be reduced to less than one luuulred thousand dollars : 2. Such by-law shall declare the number and value of the shares of the stock as so reduced, and the allotment thereof, or the manner in which the same shall be matle : .^. The liability of shareholders to persons who were, at the time of the reduction of the capital, creditors of the company, shall remain the same as if the capital had not been reduced. 40 \'., c. 43, ss. 21 and 22. /'art. Smhiiy.'aw t.. ^O. No bv-'aw for increasing or reducing the capital stock of the Ik- approve 1 i.y com[)any, or for subdividing the shares, shall have any force or effect whatso- cV.;ii^™iii"^^by '"' e'ver, until it is approved by the votes of shareholders representing at least snppie.neniary t\v()-thirds ill valuc of all the subscribed stock of the company, at a special general meeting of the company duly calleil for considering the same, ami afterwards confirmed by supi)lementary letters patent. 40 V., c. 43, s. 22, part. Ifcltcrs p.itent. I'clition for siippiemenlary l»*ttL'rs pateiu t< confirm by-law. Iiy-Iaw. i't<% to 21. At any time, not more than six months after such .sanction of such by-law, the directors may petition thj (lOvernor in Council, through the Sec- retary of State, for the issue f)f supplementary letters patent to confirm the same : 2. The dirctors shall, with such petition, produce a copy of such by law- i.rpr.»ivi.:e,i with under the .seal of the comjiany, and signed by the president, vice-president or petuioii. secretary, and establish to the satisfaction of Hie Secretary of Statt', or of such other officer as is charged by the (lovernor in Council to report thereon, the due passage and approval oi' such by-law, and the expediency and bona fide character (jf the increase or reduction of capital or subdivision of shares, as the case may be, thereby proviiled for ; ICjtideiu.v may !>e i'he Secretarv of .State or such officer shall, f( taken an.i kept keep of record any repiisite evidence in writin:;, by latli or n State. '^' "^ ' solenv.i declaration, as above meiitioncl. ;o\'.. c. .13. s. 23. that pur])ose. t ke and affirmation or bv 1 1 ■ the rom- )Ut in the je^ts wiTO otice shall ec\ on four laee where rnJ 106. ny, nia\-, at )f a smaller the whole ;nt. thereon jany to any ■ the objects 2 new stock, ed ; and in ihsolutely in a by-law for they consiikr aking of the e rc'hiced to shares of the in which the c time of the the same as if stock of the effect whatso- nting at least , at a special the same, and 43. s. 22, port. iction of such rough the Sec- o confirm the nf such by law- ce-i)residcnt or tatc, or of such lit thereon, the and bona fide n of shares, as rpose. t ke and irmation or by (irantitiR of s(i|iplt*meiit;irv ll.■lU■^^ p^iU'iit ; ---niiticc :-•• effucl »jf suflt letters patent. ticiicral cnr- poratc p,>wers. 22. I pon due proof so made, the (governor in (!oiincil may grant suih supplementary letters i)atent under the (Ireat Seal ; and notice thereof shall be forthwith given by the Sei'retary of State in the Canada Gazette, in the form (', in the scheilule to this Ai t: and thereupon, from the date of the sui)plenientary letters patent, the capital stock of the com|)any shall be and remain increased or reduced, or the siiares shall be subdivided, as the case may be, to the amount, in the manner and subject to :he conditions .set forth by such by-law : and the whole of the .^tock, as so increased or reduced, shall become subject to liu' provisions of thi> Act, in like manner, as far as possible, as if every part thereof liad been or formed part of the stock of the company originally sulisrribed. 40 \'., c. 4,^, s. 2 }. • I'owrus oi' Till- roMi'.wv. 23. .\li powers given to tile v-onijiany by the letters patent or supple- i.,„j.„,j,i^cn,o menial, letters patent shall be exercised, subject f^ the provisions and '«^"''J'"' •" ''''■* restii "lions contained in this Act. 40 \'., c. 4,5, s. 25. 24. l"-very company incorporated under this Act may acepiire, hold, sell and convey any real estate requisite for the carrying on -of the undertaking of sucii comi)any, and shall forthwith become and be invested with all projierty and rigiits, real anil personal, theretofore held by or for it untler any trust ! created with a view to its incorjioration, and with all the powers, privileges and limmmuties retpiisite or incidental to the carrying on of its undertaking, as if it Uvas incorporated by a special Act of I'arliament, embodying the prcnisions of ► this Act and of the letters patent: I'rpvided always, that the exercise by lor.n [companies of the jwwers conferred by this sec tion shall be subject to the ; special provisions re.-.pecting sik h companies hereinafter contained. 40 \'., .. 43. s. 10. ( Al'lT.M. STOCK. 25. The stOv.;k of the company shall be a jjjr.-.onal est.ite. anil shall be v^,,.,^;. ,„ ,^. i transferable, in such manner, and sul)ject to all such conditions and restrictions ix-r-imai fas are prescribed by this Act or by the letters patent or by by-laws of the ''"""°' fcompnny. 40 \'., c. 4,.;, s. 34. 26. If the letters i)atent, or the supplemnntary letters patent, make no Aiioinunt - ^,''"^",'"^,11?,!!'^''' section five of section five of this Act, be deemeil to have been issued and to to certain held subject to the payment of the whole amount thereof in cash, unless '"'"■''*'""'"■ ^he same has been otherwise agreed upon or determined by a contract duly ade in writing and filed with the Secretary of State at or before the issue of kuch shares. 40 \'., c. 43, s. H3. .. ■' l'rtj\ls,) ; as to luatl i.ompaities. DIUKCTDk.S. 28. ,(.„ — . The affairs of the companv shall be manaccd bv a board of not 'V"'"'' '^''^ j^jSiore than iitteen anil not less than three directors. 40 \ ., c. 43. s. 26. 29. The persons named as such, in the letters i)atent, shall be the ProvUionai |lireitois of the comi)any, until repbced by others duly appointed in their ''''''-■'''"'^-• ■.ad. 40 W. c. 43. s. 27. I I 2 yimiiiications of 30. No pcrsoii shall l)e elected or appointed as a director thereafter iiireaLI^I" unless he is a shareholder, owning stock absolutely in his own right, and to to the amount required by the by-laws of the company, and not in arrear in K.My-law ; nor until a copy of such by -aw. certified under the seal of the company, t^as been deposit- ed with the Secretary of .State, and has also been pnblished in the Canada Gazette. 40 V., c. 43, s. 18. Klection i>f liircciors. 32. Direclors of the company shall be elected by the shareholders, in general meeting of the company assembled at some place within Canada,— at such limes, in such manner and f(^r such term, not exceeding two years, as the letttrs patent, or, in default thereof, as the by-laws of the company prescribe. 40 \'., C. 43. S. 2K). .Mixle and times wf election. \*early. NiitiL-e. \'otes. Proxies" .Ml calls must tia\'e been pal. I. .Majority to liecide. Castini; vole. Rlllot. Vacancies, hou' tilled. President, \ice-IJresident and oMicers. Failnre to elect ilireirtors, how rente Jie I. i 33. In the absence of other provisions in such behalf, in the letters patent or by-laws of company, — (a.) The election of directors shall take place yearly, and all the directors then in office shall retire, but, if otherwise cpialified, they shall be eligible for re-election. (/'.) Notice of the time and place for holding general meetings of the company shall be given at least twenty-one days previoisly thereto, in some newspaper published in the place where the head office or chief place of business of the company is situate, or if there is no such newspaper, then in the place nearest thereto in which a newspaper is published ; (t. ) At all general meetings of the company, every shareholder shall be entitled to give one vote for each share then held by him : such votes may be given in person or by proxy — the holder of any such j)roxy being himself a shareholder ; bit no shareholder .shall be entitled, either in person or by proxy, to vole at any n eeting unless he has paid all the calls then payable upon all the shares held by him ; all (juestions proposed for the consideration of the sharehokiers shall be determined by the majority of votes — the chairman presiding at such meeting having the casting vote in case of an equality of votes ; Ui.) Every election of directors shall be by ballot ; (e.) Vacancies occurring in the board of directors may be filled, for the remainder of the term, by the diref'tors from among the qualified shareholders of the {'ompany ; (/) 'I'he directors shall, from time to time, elect from among themselves a president and, if they see fit, a vice-president of the company; and may also ai>point all other officers thereof. 40 V., c. 43, s. 30. 34. If, at any time, an election of directors is not made, or does not take effect at the proper time, the company shall not be held to be thereby dissolved: but such election may take place at any subsecjuent general meeting of iIk' | <"ompany duly called for that purpose ; and the retiring directors shall continuef in office imtil their successors are elected. 40 V., c. 43, s. 31. (!ei)| •iccf siinil to .S, fixe innd I'omi ,T thereafter ight, and to ; in arrear in : directors of ,. 28. m fifteen, or ly change the either of the y a vote of at lers present at ; nor until a been ueposit- i the Canada lareholders, in n Canada,— at ■0 years, as the lany prescribe. f, in the letters all the directors 1 lie eligible for meetings of the lereto, in some r chief place ol paper, then in holder shall he h votes may be being himself a son or by proxy, avable upon all iideration of the —the chairman an equality ot .)e filled, for tlu' fied shareholder^ mony; themselves IV ; and may also or does not take | hereby dissolved. il meeting of il^i-'l ;ors shancontiniiti I.". I'OVVKKS 01 niKKCToKS. Powers and duties of directors. Siocli. Dividends. Ntintlier, ,'s;c.. of direct or .*. .\gents and t)tticers. Meelings. Penn'ties. ( iencral powers. (.'uiifirmaiioti of l>y-laMs. 36. Ihe directors of the comi)aiiy may administer the affairs of the company in all things, and make or cause to be made for the company, any description of tyntract which the company may. by l.iw, enter into ; and may, from lime to time, make by-laws not contrary to law, or to the letters patent of tlie comi)any, or to this ,'\ct, for the following purpo.ses : ~ (a.) The regulating of the allotment of stock, the making of calls thereon, the payment thereof, the issne and registration of certificates of stock, the forfeiture of stock for non-payment, the tlisposa! of forfeited stock and of the proceeds thereof, and the transfer of stock ; (/>,) 'i'he declaration and payment of dividends; (c.) The tuimber of the directors, their term of .service, the amount of their stock (lualification, and their remuneration, if any; (J. ) riie appointment, lunclions, duties and removal of all agents, otficers and servants of the company, the security to be given by them to the company and their remuneration ; (('.) 1 he time and place for the holding of the annual meetings of the company, the calling of meetings, regular and special, of the board of directors and of the comjiany, the quorum, the recpiirements as to proxies, and the l)rocedure in all things at such meetings ; ( /.) 'I'he imposition and recovery of all penalties and forfeitures which admit of regulation by by-law : (^'.) 'I'he conduct, in all other particulars, of the affairs of the (company : And the directors may, from time to time, repeal, amend or re-enact the same ; but every such by-law, and every repeal, amendment or re-enactment thereof, unless in the meantime confirmed at a general meeting of the t'om- pany, duly called for that purpose, shall only have force until the next annual meeting of the company, and in default of comfirmation thereat, shall at and from that time only, cease to have force : 2. No by-law for the issue, allotment or sale of any portion of the imissued stock at any greater discount or at any less premium than that which has l)een previously authorizci-i at a general meeting, and no by-law for the remuneration of the president or any director, shall be valid or acted upon until the same has been confirmed at a general meeting. 40 \'., c. 43, s. 32, Mrt. 36. The diret tors may deduct from the dividends payable to any share- Dei.tsio.om- lio'.der all such sums of money as are due from him to the company, on JJe'i'uJ,"j''fr!n,, account of calls or otherwise. 40 \'., c. 43, s. 59. . ) Hyjiothecate or pledge the real or personal jiroperty of tlie comjiany ch.-irtjin,' to secure any sums borrowed by the company ; pnipeny. iUit the amount borrowed shall not, at any time, be greater than seventy Limitation of five per cent, of the actual i)aid-up stock of the company : but the limitation ur rowed"*"'' made by this section shall not apply to commercial paper disrounte-l by the Kxception. company. 40 \'., c. 4;,, s. S5. Confirmation of by-law^ for va'e ol' sttK'U below- previous rate. &c 14 CM.l.S. i Calling; in of moneys unpaiil on Khnres, Intere'il on calU uvcrilui:. 38. llio directors may, from timi- to time, make siicli rails upon the shareholders in respect of all moneys iipaid upon their respective shares, as they think fit, at such times and places anil in such payments or instalments as the letters patent, or this Act. (jr the by-laws of the company require or allow. 40 V.. c. 43, s. 5.\ 39. A call shail he deemed to have been made at the lime when the resolution of the directors authorizing such .-iymeni of caiu share or shares, enforce payment of all calls, and interest thereon, by action in any court of competent jurisdiction ; and in such action it shall not be necessary to set forth the special matter, but it shall be sufficient to tieclare that the dc fendant is a holder of one share or more, stating the number of shares and is indebted in the sum of money to which the calls in arrear amount, in resiicd , of one call or more, upoh one share or more, stating the number of calls and the amount of each call, whereby an action has accrued to the company under this Act ; and a certificate under their seal, and purporting to be signed by any officer of the company, to the effect that the defendant is a shareholder, thai such call or calls has or have been made, and that .so much is due by him ami unpaid thereon, shall bo received in all courts ^•f, prima facie evidence thereof 40 \'., c. 43, s. 56. liooKS ()!• Till-. roMl'.WN. Hook to i.e kept 43. Thc Company shall cause a book or books to be kept by tlu' "".'lain!" '" secretary, or by some other officer specially charged with that duty, wherein , shall be kept recorded, * V^'^-n^V'i"'" ^"'^ '^ '""''^ °' ^'^''' '^''''^''^ patent incorporating the com|)any, and of ar.u iia uit, i> a»s. ^^,p|,l^,|,■,^,,1(,^ry i^.^i-rs patent, and of all ny-laws thereof; Illy r lie alleged and proved. Certificate to l»e e\ ttience. the (I valid! of tr.[ tow;iJ jointll 40 \J fin, slJ [fcr ()t| hvho jei:tively. on the •\">'>""<-i«ii>!..,"'' a!id ( reditors of the company, and their jjersonal representatives, at the head 'iii«fr..m. office or chief place of business of the company ; and e\ ery such shareholder, ( reditor or personal representative mav make extracts therefrom. 40 \'., <■■ 4.V s. 37- 45. I'very director, officer or servant of the company, who knowingly iviK.iiyf..rfai.ie makes or assists in making any untrue entry in any such book, or who refuses *""''^^"- or wilfully neglects to make any ))roper entry therein, or to exhibit the same, or to allow the .same to be insjjected and extracts to be taken therefrom, is guilty of a misdemeanor. 40 \'.. c. 43, s. 40. 46. I'Airy company which neglects to keep such book or books as afore- I'orfLitiirc o Mt said, shall forfeit its corporate rights. 40 \'., c. 43, s. 38. ne^jleci. 47. Such books shall hn prima facie evidence of all facts jjurporting toB.)ok^lol,e ■""iina ta idL'nt.'e be thereby stated, in any action, suit or proceeding against the company or 'v'"'"' '"""' a^^ainst any shareholder. 40 \'., c. 43, s. 3(;. Ti;.\NSl'i:u OK .^Il.\ki:s. \o transfer of shares, unless made by sale under cxecutinii, or uniler ir.in ,ror o' the decree, order or judgement of a court of competent jurisdiction, shall be!;'/'"^"'""' ""'" 48. uie iiecree, oruer or juugeineiu 01 a uouri 01 i:oiiiiJi.-ieiu junsuK lion, snan oe „f,i.r „ ;,„. .. \alid for any purpose whatever, until entry thereof is duly made in the register of transfers, except for the purpose of exhibiting the rights of the parties thereto towanls each other, and of rendering the transferee liable, in the meantime, jointly and severally, with the transferrer, to t'ie comi)any and its creilitors. 40 \".. c. 43, s. 41. 4-9i No transfer f>f shares, whereof t'le whole amount has not been paid i.iai,iiii\.s.).-,ii. tin, shall he made without the consent of the directors: and whenever any trans- '•"i"i>a»i.-:aras [fer of shares not fully paid in has been made with such consent, to a jierson s 'ans"'in!:'irtain [who is not apparently of sufficient means to fully pay up such shares, the'-'""^^'- 1 directors shall be jointly and severally liable to the creditors of the companv, [in the same manner and to the same extent as the trnsferring sharehoiiler, hut for such transfer, would have been ; but if any director i)resi;nt when any such '!"»"i>h-i .- • 11 11 i- 1 ■ 1 •.- 1- 11 I • • ■ 'I'recli.r mav [transler is allowed does forthwith, or it any director then ao.-ent does, within .iv mi liability, [twenty-four hours after he becomes aware thereof and is able so to do, enter on Itlie minute book of the board of directors his prote.-t against the same, and Ivithin eight days thereafter publishes such protest in at least one newspaper lliiib'ished at the place in which the heal office or chief place of business of - ir. l'ro\i;^i<)ii when s .are'^ are trur.t the ((Jiiipany is sitiiaicd, or if tlu-rc is no newspaiur there piihlishetl, then in the newspaper pul)lislie(l nearest tliereto, siicli director may thereby, and not otherwise, exonerate himself from siuli liability. 40 V., e. 4.;, s. 42. 50. Whenever the interest in any shares of the capital stork of the inTtieiioiherwile Company is transmitted by the death of any shareholder or otherwise, or when- '''■'" ''V "^•'"^''^'■- t.vt,T tlie ownership (jf or legal rij;ht of possession in any shares ehanj^es by any lawful means, other than by transfer according to tiie |)rovisions of this Act, and the diret-tors of the com|)any entertain reasonable doubts as to the legality of aiy claim to such shares, the com])any may make anti file, in one of the superior courts in the I'rovmce in which the head ortice of the company is Order of court situatcd, a declaration and i)etition in writing, addressed to the justices of the may be o!)iaiiieJ court, Setting fortli the facts and the number of shares previously belonging to 01 apulicniKMi. . ."^ , , , 1 • I 1 1 /- 1 1 the person in whose name such shares stand in the Ixjoks of tlie company, and j)raying for an order or judgement adjudicating and awarding the said shares to the person or persons legally entitled to the same, by which order or judge- ment the company shall be guided and held fully harmless and indemnified and relcjased from every other claim to the said shares or arising in respect thereof : 2. Notice of the intention to present such i)etiticm shall be given to the l)erson claiming such shares, or to the attorne\ of s\ich nerson duly authorized for the iHirpose, who shall, upon the filing of suc:h petition, establish his right to the shares referred to in such jjetition ; and the time to plead and all other proceedings in such cases shall be the same as those observed in analogous cases before the said sujjcrior courts : Provided always, that the costs and exi)enses of procuring such order or judgement shall be paid by the iK;rson or persons to whom suc-h shares are declared lawfully to belong ; and that such shares shall not be transferred in the books of the comjjany until such costs and exjjenses are paid, -saving the recourse of such person against any person contesting his right to such shares. 40 \'. c. 43, s. 43. , . 51. No shares shall be transferable imtil all previous calls thereon are fully paid in. 40 V., c. 43, s. 44. 62. The directors may decline to register any transfer of shares belonging to any shareholder who is indebted to the company. 40 V., c. 43, s. 45. 53. .Any transfer of the shares or other interest of a deceased share- holder, made by his personal representative, shall, notwithstanding such personal rejiresentative is not himself a shareholder, be of the same validity as if he had been a shareholder at the time of his execution of the instrument of transfer. 40 V., c. 43, s. 46 LIARIMTV OK SII.^UKIIOLDKKS. Notice of np)>lii:atii>n. I*roviso ; costs. Restriction as t ' transfer. As to t-'.in fer 1»/ debtor to the company. Transfer by per- sjn.il r^pre ent ative, l.ta)>ility of shareholile:. i.iabii ty limiif I 54, 'I'lii; shareholders of the com|)any shall not, as such, be responsible loanioiiiit unpal I ^ i ,- i ,. i i . .- , i- i . ...11 st.K.k. for any act, default or liability of the company, or for any engagement, claim, payment, loss, injury, transaction, matter or thing relating to or connecteil wit!i , ■ :■■•.. the company, beyond the amount unpaid on their respective shares in tlu J c-ai)ital stock thereof 40 V., c. 43, s. 48. 55. Every shareholder, until the whole amount of his shares has been ])aid up, shall be individually liable to the creditors of the company to an amount ecjual to that not paid-up thereon ; but he shall not be liable to an When toacciue. action thcrefor by any creditor until an execution at the suit of such creditor against the company has been returned unsatisfied in whole or in part : and tlio 1 amount due on such execution, not exceeding the amount unpaid on hi^ shares, as aforesaid, shall be the amount recoverable, with costs, from such share- holder ; and any amount so recoverable, if jiaid by the shareholder, shall hci considered as paid on his shares. 40 \'., e. 4';, s. 47. ictl, then in l)y, iind not ,to;k of the se, or whfiv infffs l)y any this Act, and le legality of one of the : company is stices of the belonging to ompany, and said shares tf) ler or judge- indemnil'ied ig in respect given to t!ie ly authorized )!ish his right and all other in analogous the costs and the person or ,nd that such itil such costs 1st any person Is thereon are ires belonging , s. 45- eased share- tanding suc'.i same validity e instrument )0 rcsponsil)ii-' , ;ement, claim, onnected witli shares in the ares has been ompany to an : liable to an such creditor part : and the unpaid on hi"- om such share- f)lder, shall 1" 56. -No jcrson. iioiding slock in the compan) as an executor, adniinis- i'u>(ci-,,>t...n(ii trator, tutor, curator, guardian or trustee, shall be personally sul)ject to liability ' ■'^'■""■' ■ a> a sharciiolder; i)nt tlie estate and fund> in the hands of such pirMjn shall be liable in like manner, and to the same extent, as the testator or intestate, or the minor, ward oi' iiUordicted person, or the person interested in such tiust fund would l)e, if li\ing and ( ompelent to act and holding such stoi k in his own name : anti no person holding such stock as collateral security shall be pt-rsonalb. subject to such lianility, but the person pledging such stock shall Ijc (onsidered as holdmg the same and shall be liable as a shareholder arciirdinjjh. 40 \'., c. 4,^. s. .p;. 57. liver) such executor, administrator, curator, guardian or truslt'e shall ^|"[ '■'"'''''' '" rcpresLiit the stork held b\- him, at all meetings of the company, and mat vote as a sha.eholder : and ever\ i)erson who jjledges his stock may lepresent the same at all such meetings and, notwithstanding such ijKdge, \()te as a share- 40 \'., c. 4,?, 1IAI!1I.IT^■ 111- i)iui:(T()ks AM" 01 fici-:ks. ,.| 58. If llie dire'lors of tiie company dcclar-j and pa\ any (liNidend ulu-n 1 ■; the compan;/ is insohent, or any dividend, the |)a\nient of which renders the', l;comi)any insohent, or imjiairs the capital stock thereof, they shall be jointly and '^• :^se\erallv liable, as well to the comjiany as to the individual shareholders :)m\ Mciedilors thereof, for all the debts of the company then existing, and for li ^thireafter contracted during their continuance in office, resi)eiti\els' ; but if anv " ■^(liixctor present when such (li\idcnd i declared does lbrthwith,()r if any director l;.. f then absent does, within twent\-four hours after he becomes aware thereijf and i able so to do, enter on the minutes of the board of directors his jirotest against [the same, and within eight days thereafter |Hiblishes such protest in at least one [newspaper pui)lished in the place in wliich the head otfice or chief place ol [business of the comjiany is situated, or if there is no news;'/a|)er there i)ublished. [then in the newspaper published nearest thereto, such direc tor may thereby, and not otherwise, exonerate himself iVom sik h li,d)ilitv. 4c \'., c 4;;, s. <>■;. .ial'ilily of ui- tli\ iticnil \v IiL'li iinp.-trn' i-. in- iKciil. ■.■<;. . tuv ilirt' iM'H'-. :iy ii\.iul -^m h il.ililv. 59. \< lan shall be made bv the compan\ to anv sharehokler ; it' such n., i.an i,v.-..n tiiv lu sliare- floan is made, all directors and other officers of the compaiu' making the same, l"^L-s txlcm |oi- in anywise assenting thereto, shall be joint!)' and severally liable for the I'y i.'a» 'yi"-. amount of such loan, with interest, to the com|)an\. -and also to the creditors ,''f-",'iir,. i,''r's!' ^ lot" the cfjinjian)- for all debts of the comjiaii)' then existing, or contracted be- jtween the time of the making ol' such loan and that of the repa\nienl thereo:': [but the proN'isioiis of tiiis section shall not a|)]il\- to loan coniiianies. 40 \'., |c. 4;,. s. 6,S. 60. The directors of the company shall be jointly and severally liable i,iai.iiiiv..f.iirL-.- Ito the clerks, laborers, servants and apjirentices thereof, for all delds not ""'~ '^^"' "■'■'■"'- Jxceeding six months' wages due for service performed for the compan) whilst pe\' are such directors res|)ectively : but no director shall be liable to an action i.imliaii.n ..r therefor, unless the company is sued therefor within one year after the debt ""'" ''-' • l)ecoiiies due, nor unless such director Is sued therelbr within one \ear from the time w'^en he ceased to be such director, nor unless an execution against the company in respect of such debt is returned unsatisfied in whole or in pan : nid the air.ount unsatisfied on such exei'Ulion shall be the ainouni rei overable ^vith costs from the directors. 40 \'.. c. 4,^, s. (xj. i8 OiTicc a 1.1 A ieili'ic* cif I'l - company in (iin.iila. uoMicti.i: si:k\icK oi I'Ktx i>s, i:ic. 61. 'I'hc coinpany shall, at all limes, Iiavo an ntfuv in \\v: city or to.vii in wliit h its s 62. Any s iiiimons, notice, ordi r or other p;();:css or document reciiiired ..11 iiuoimpaiiy. ,^j jj^^, >^^..y^.,| i,|„,p ,|,^. coniiuin , may he served hy leaving the same at the said . office in the city or town in wiiich its chief place of business is situate, with any adult pcr.ou in the empio}' of t'le c jm) any, or on the president or secretar;, of ih.' companv, or b, leaving the same at the domicile of eitiier of them, or with any adult i)erson of his family or in his employ ; or if the company has no known otilice or chief place of business, and has no known president or secretary, the court may order such pul)lic:ation as it deems reiiui-iile. to be made in the jiremises : and such publication shall be held to be due service upon the company. 40 \'., c. 43, s. 61. Use of common 63. .\ny summons, notice, order or p:o-eetling re(|uiring aui'.ientication wihiii^'Lciun '•>' l''^' eompany may be signed by any director, manager or other autho;i/ed '-•'«'• officer of th^' company, and ni^Kid not be under the seal of the company. Scr\ "co of no i.cs njion MU'inl.cr-. 64. \otices to be served by eonijiany upon the shareholders may be served either personally or by sending them through the post, in registered lettjrs, addressed to the shareholders at their places of abotle as they appear on the 1) oks of tl.e companv. 40 \'.. c. 43, s. 63. Scrvict; of iiolicc Iiy p.)sl. K\-iilt*n. c .)f l.\'-l;iu ... Actions Iictwcen 1; .inp:iny alul ..'i.'irc!'... ilcTs, 65. \ notice or other document served by post by the com])any on a shareholder, shrll be held to be served at the time when the registerefi letter containing it would be delivered in the ordinary course (jf post ; and to i)r()\e th.e fact and lime of ser\ ice it shall be sufficient to prove that such letter was pro|)erl\' ackfressed and registered, and was ])ut into the post office, and the time when it was put in, and the time reijuisite for its delis er\ in the ordinary (ourse of post. 40 \'.. c. 43, s. (^. 66. \ copy of any by-law of the compan\-, under its seal, and purporting to be signed b\' any ofti( er of the compan)', shall be received as against an\' shareholder of the comjiany as />iiina J'lnw evidence of such by-law in all courts in Canada. 40 \"., c 43, s. t,\. 67. .\n\ ilescription cl" action, may be prf)sccuted ami maint lined between the company and any shareholder thereof; and no shareholder shall, by reason of being a shareholder, be incompetent as a witness therein. 40 \'., c. 43. s. 70. M,.,ic,.f in.or 68. In anv action or other legal iiroceeding, it shall not be requisite to li.iallon,,^..' ,h .«■ r \ 1 1' .- ■ • .-1 1 .11 t..i.tsci loiin in set tortli tlie mode of incorporation of the comjiany, otherwise than by mentuin le^ai pr..cc.t,iin«^ f,,- jj ^^^^^\^,y \i^ corporate name, as incorporated by virtue of letters patent or of letters patent and supplementary letters patent, as the case may l)e under this .\cl ; and the notice in the Canada (iazette, of the issue of such letters patent or supplementary letters patent, shall he /viNi(i\s as id kxisiim; companiks. reciuircd the said late, with seeretar;,- them, or ny has no sident or ile, to he .le service cntication uilho"i/ed eomi)an; . 63. Any eoMij'.any lurelolbre incor'poral'.'d for any purpose or object for I'.xiMini! cuni which i.tters pa'enl may he issued under this Act, whether under a special ()r [."'rhaucrluli'lie^ a general Act, and now heing a subsisting and vn'i 1 corporation, may iipply for ''"'' ■■^' '■ letters patent under this .\ct, and the ("lovernor in Council, ujion proof that n(,t'ce of the application has heeii inserted for four weeks in X\m: CitiKuia (icizcttv, m.iy direct the issue of letters patent incorporating the shareholdtrs of the said company as a comi)any under this .Act: and thereupon all the rights or ,'(,.;1.^',.", "'" ' obligations of the former conijiany shall he transferred to the new company, and all jjroceedings may he continued or conmien< ed by or against the new comi)any that might have been continued or commenced by or against the old < ompans : and it shall not be necessary in an\- such letters patent to set out the names of the shareholders ; and afler the issue of the letters i)atenttl e com|)any sha.l be governed in all respects by the provisions of this .Act, cxcep-t that the liability of the shareholders to creditors of the old ctimpany shall re- main as at the time of the issue of the letters patent. 40 \'.. c. 4_^, s. So. rs may lie registereil ley appear lanv on a A letter to prove -tter was the time irv course purportmg ,ainst any all courts 70. If a subsisting compai v applies for the issue of letters patent under siii.-isiii.K,„ni- this ,\ot, the (lovernor in Council may, by the letters patent, extend the ])owers f"'"Lr™Vwi'i'i.^ of the com|)any to su<'h other objects for which letters patent may be issued •-■"'"^"•''-■' P"«<=rs. imder this .Act as the applicant desires and as the (lovernor in Council thinks lit to include in the letters patent, and which have been mentioned in the notice of the application for the same, in the (.'anada LiarA't c ; and the ( lovernor in ("oi'ncil may, in the said letters patent, name the first directors of the -new . company; and the letters patent maybe issued to the new company by the name of the old company or i)\' ancuher name. 40 \'., c. 4;?, s. Si. 71. .\11 the pro\isions of this .\i t in relation to the obtaining of supple- Provisi.ins luuch- mentary letters patent by companies incorporated hereunder shall, so far -is "Jy u.',\'l.'[!'pa'iunt applicable, apply and extend to applications for letters patent under the two loapi'iy. sec lions next preceding. 40 \'., c. ^\, s. S3. C.r.M-.RAI. I'ROVISldNS. aint lined der shall, 40 V.. m ipiisue to )y mention latent or )e under ich letters all things )lenientary '.re.at Seal, ■ceding by 72. The comiianv mav have an agenc\- or agenc ies in anv cit\' or town aki-hlUs in ill ihe L'nited Kingdom! 40 \'., c. 4;,, s. S6.' " ' ' fi.i.oi Kinu,i„iu 73. \o dividend shall be declareil which will imiiair die (aiiital of the i"'^''.''"'! '"'i '■> . . iini>;iir capila!. ■ impaiiy. 40 \ ., c. 43. s. 5;. 74. Shareholders who hold one fourth part in value of the subscribed siu-cai Ki'm-iai stock of the company, may, at any time, call a special meeting thereof for the ""^'""'*='- transaction of any business sjiecified in such written re(|uisition and notice as they mike and issue to that effect. 40 \'.. c. 43, s. t,2. /^art. 73. I'",very deed which any iK'rson, lawfully em]K)wered in that behalf by .\i-i^c.f,:,.mpany> the vompany as its attorney, signs on behalf of the company, and .seals with """""'■' '''"' h s seal, shall be bnding on the company and shall have the same effect as if it was nivlcr the seal of tlie co;iii)any. 40 \'., c. 43. s. 65. Wl .'O I • iKnuls, \:i ., u lii't) in lit' liitMl- 'vv,\ iiti i-i)iii|iaiiy, N.i n livi.liial l<:ihilll>. I'riiviKi) : ii'. til 76. I'',\iiv (oniMi I. af^miiuiil, rn-ir^i'iiuiit or Ii,iig;im made, .iiui i\in 1)111 oi (At liaiigi.' drawn, a('(u|iii(l or iiidcirsid. and every jjromissory noit.' ami ( lu'(iiic iiiadi', dr.iwn or ind(MMiiMi. i^iMi iii:,|MnAi.i^ llie liy laws ol the i oinpanv, shall l)c binding ii|)oii the itmipan) . .mv n- ( ase shall it he iie<'essar\' to have llic seal ol' the < onipany allixed to an\ su< h eoiitract, agreeineiit, i iinii^enHnl, liarnain, bill ot e\i luiii^e, promissory note or eheipie, or to prove that the same was maroniiss(>rv note iiUetided to be lirculalcd a' ' ' ' ' ' ' o;' monev, or ;is the note ol a bank, or to eni^a.^e ui tile busimss ol b.uiknv^' o;' insurance. )o \'.. c. .1;. s. 6^ \.\- I'rtitir may ilci-larali.iii aUMl.ivil. iiy 77. I'root' ol an\ matter whiih is ne( ( ssary to be madi' under mis .\( t ' may be made bv bath or altirmaiion, or by sokiuii de(l. nation, before .in\ jus tice of the jieace, or anv commis:,ioner for takiiv; alli<.avils, to be ti^ed in any of the courts in any of the I'rovinces of {'anada. or .iny notarv public, vnrh of whom i-i herei)y authorized and I'lnpowered to administer oaths ami receive affidavits and declarations for that purpose, .p \ ., e. .\\. s. ■](). liaii'Mi. icri.iiii inriirni.ii. 78. Ilie prov isioiis of ihi> Alt relatiii-; to matters |ireliminary to the i.ian; iiuirH ' issue of the letters patinl or suiiplemenlarv letters patent shall be deemed ilirectory only, .ind no letters patent or supplementary letters patent issued under this .\cl, shall be held void or voidable on accomit of any irrej;ularity in any notice presi ribed by this .\ct, or on account of the iiisuffu leiicv or ab- sence of anv su( h notice, or on accoiuit of anv irrej^ularilv in respect of any other matti.'r preliminar\ to tlK' issue of the k'tters patent or sup|>lemenlary letters naieiil. .10 \'.. c. .1;, s. --. Word •■liniiu-.l h» li'* ill-'OllL-d at'ti-i' iiaitu- ol' I'oillliany uli all luiiiccs^ i*i;c. I'.Mially f.ii- \i.ilatiipn ,.r pre irililli; sL-iiiiil). 79. The coinpanv- shall keep |)ainted or affived. its nanu', with the word "limited " after the name, on the outside of every office or place in which llu' business of the compan\- is c.irried on. in a consiiieuous position, in letiers easily le^^ible, and shall have its name, with the said Avord alter it. engraven in lejfible characters on its seal, and shall h.ivi' its name, with the said word after it. mentioned in lei,'ible iharaciers in all notices, advertisements and other official |inblications of the comp.my, and in all bills of exchange, promissory notes, indorsements, cheques, and orders tor money or ^'oods. puri)ortiii;^ to be sinned b\ or on behalf of such companv. and in all bills of parcels, invoices •ind re( eipts of the i:oinpany : 2. I'Aery companv which does not keep ])ainted or affixed, its name, with the word ••limited " after it, in manner directed by this Act, shall incur a pen altv of twenty dollars for everv da\ duriiiL; which such name is not so kept painted or affixed : Penally fur per- riiiltin.^ \ iiilalioii. I'Aery director and manager of the company, who knowingly am wil lullv authorizes or permits such default, sliall be liable to the like jienally ; 4. lAery director, manager or officer of the companv. and every person l't.-iia!i\ "ti riin.-c- tors or oIlHi'rs usiiiKiir.iuiii.iri/- on its behalf, who uses or authorizes the use of anv >ieal purporting to be a seal Mlih.ut 'iniiied of the company, whereon its name, with the said \i.>:d "limited" after it. is not "" "• so engr.iven as .iforesaid, or who issues or alithoiizes the issue of any notice'. advertisement or other official imblication of siadi company, or v»-lio signs or authorizes to be signed on behali of such coini)anv anv bill of exchanife. iromisso.-v note, indorsement, cheijue, order for moiiev or goods, or who issues strator pompai linie.s. roin Pr met leiicei |r tiiinj. If the id ex| fairs tl lis own 21 loic ntul U.oIVk iT li uiuUr ul m iit> ;,i\y SUlll i null- iir oiMil. a'^ ; ;»iul ll"-" I' ilutvliy lluictiir •. lori/.c iln-' ,M>ry iv)li.' uniia;-;*.' "> .•!• mis Alt IV any jii^ i-c(l iM any lie. each <>t' nil rci'civ*.' nary t" l'^'^' he '(lf(.'nK'(l ilciU issiicr>l alter ;uul <)lli>-'i' prDUiissory jortinii to l)e i^.ls, invoiees Is name, with iiK ur a l>en not so kcpl ii-lv anil wil- penally ; every pers(,n r to l')e a seal )tter it. is not )!' anv notiee. who si^;ns or n\ exihan.ne. )r who issues or aiiihori/es to l)c issued any hill of parcels, invoice or receipt of the C()m|)any, wherein it.s name, with the said word after it, is not mentioned in manner afore- said, shall ini ur a penalty of two hundred dollars, and shall also be personally |,i,|,j|i,y j,, liable to the holder of any surh hill of exchange, prcmiissory note, cheque, or mMiii'-n. order for money or goods, for the amount thereof, unless the same is duly paid by the company. 40 V., c. .[], ss. 78 and 79. 80. Kvery prospectus of the company, and every notice inviting persons Hro»M<.tu«,ftc.ia to subscribe (or shares m the company, shall specify the dates and the nances u,iiiruci» emereii of the persons to any < ()ntra( t entered into by the company or the promoters, i;^';'J'J,,^,';,3'"'' directors or trustees thenof, before the issue of such prospectus or notice, frumluicm. 1 whether subjei t to adoption by the direi tors or the company or otherwise ; and every prf)spectus <,r notice which does not specify the .same .shall, with respect to any person who takes shares in the company on the faith of such prospectus (or notice, and who has not had notice of such contract, be deemed fraudulent Ion the part of the promoters, directors and officers of the company who know- lingly issue such |)rospectus or notice. 40 V., c. 43, s. 84. IKlt tt> rc. 81. I'lie company shall not be bound to see to the execution of any t-"'"!"")'." trust, whether exjjress, mi])lied or constructive, m resj)ect of any snare; and >|wci of iruM |he receipt of the shareholder in whose name the same stands in the books of (lie company, shall be a valid and binding discharge to the company for any lividend or money jiayable in respec t of such share, and whether or not notice If such trust has been given to the company ; and the company shall not l)c iiind to see to the application of the money paid upon such receipt. 40 V., 43, s. 51. 82. I'-very director of the company, and his heirs, executors and admin- nirectors iiuicm- trators, and estate and effects, respectively, may, with the consent of the I|ijH^'j",'j)|."'''''^^' fconipany, given at any general meeting thereof, from time to time, and at all company. Jinies, be indeiiinilied and saved harmless out of the funds of the com|)any, jroin and against al! costs, charges and e.\penses whatsoever which he sustains ir incurs in or about any action, suit or proceeding which is brought, coui- lencetl or proseciiteil against him, for or in respe<:t of any act, deed, matter kr thing wliaisoever, made, done or permitted by him, in or about the executif)n If the duties of iiis olilce ; and also from anil against ail other costs, char!;es id exijcnses which he sustains or incurs, in or about, or in relation to the., , , . lairs thereof. — e.xcept such costs, charges or exjienses as are occasioneil by own neKka or lis own wilful neglect or default. 40 \'. c. 43, s. 57. dcfnult. 83. The charier of the company shall be forfeited by non-user during KorfcUure of wee consecutive years, or if the company does not go into actual operation ';l'^"" '"' """' Ithin three years after it is granted. 40 V., c. 43, s. 72. 84. The ("lovernor in Council may, from time to time, establish, alter Fees on leiteri bd regulate the tariff of the foes to be jiaid on application for letters patent ||^'J;"|';yu,«n,L' ^d supplementary letters patent under this Act, may designate the department '" i uunuii. departments through which the issue thereof shall take place, and may pre- / ribe the forms of proceeding and registration in respect thereof, and all other aUeis_re(|ii:siie for carryin;.; out the objects of this Act : 2. The amount of the fees may be varied according to the natvre of the Amount of /«» Impany, the amf)unt of the capital stock and other jiarticulars as the (lovernor '"''* "" ^'"'' ' [Council thin'.js fit : 3] 40 V., c. 43.8- 87- Full Mtumanl ■t cen issued under the (ireat Seal of Canada, l)earing date the day of incor|)orating [httc statt Mama, atUrrss and calling of each corporator named in the letters patent], for the purpose of [here stale the undertaking:; of the Company, as set forth in f he letters patent\ by the name Q{\hert stale the name of the Company as in the letters patent] with a total capital stock of dollarN divided into shai'es of dollars. Dated at the office of the Secretary of State of Canada, this day of 1 8 A.B., 40 v., c. 43, sch. A. Secretary. FORM B. Public notice is hereby given, that under " The Companies Act" supple- mentary letters patent have been issued under the Great Seal of Canada, l)earing »te the day of , whereby the andertaing of the Company has Ijeen extended to include [here set out the other purposes or objects mentioned in the siipplementaty letters patent]. Dated at the office of the Secretary of State of Canada, this day of 18 .\.B., |o v., c. 43, sch. C. Secretary. FORM C. Public notice is hereby given, that under " The companies Act" Supple- lientary letters patent have been issued under the Great Seal of Canada, earing date the day of khereby the total capital stock of [here state the nan.e of the Company] is Icreased [or reduced, as the case may he] from dollars to, dollars. 1 )ated at the office of the Secretary of Slate of Canada, this day of 18 A.B., v., c. 43, sch. B. Secretary. 24- I ' t Ql.rUBTlONS^- Oivean,cxamp>^-- . . nhtiin iheir existence? ^"^^ • In What two ways ma> m-y ,■;,,, ,n cxavup^'-'- What ,s a M^l.' corporation? U - What,sa.r,vat.Corporanon> ^ :'\,,J,, ,,..ple. ^ What ,s an Klecn,osynary ^-J-'^^ i;;^,,^^,,,,, (.ive an example What ao you nnae.tandi,,-Q-^^^^^^;^^^^^^^^^,,,^,^,,,,^ In what two ways d.. private (X V What .s a stockholder? ^.^ ,^^, U the death of a stockholder, ^^ IK ^ ■■ What is a Share? , ■liabilities of a partner m anu.solvent . Whatisthedif^renc^b;.-- ;^,^^^^ , cp-partnership and a ^^o^^^old.,^ . What exception rs th..-re m the case ,,,„,,n.es' . What ,s the standard value of shares m ah L . What is a dividend? . , .. i^^^i? What do you un.lerstanil ''> . . WhatdovouumlerstandhyaCaU. QUESTIONS ON THE DOMINION ACT. ^, , >,, fonned u.Klcr this A't? ^,, .... at purposes n.vConM.nu.U^^^^^^^^^^^^^^^^ ^Vha, ku.ds of C^nnpanK. cannot le.^^J^^^_^^^^^^^^^^ .^Vhatn<,tn.enu.sti>e..eno - ^^^^^ , What partuulus must he .t ted ^ ^^^^^^ ^,^^^^,^^^, , m whou, nu,.t applu-ation he made ^^^^^^^^ ^^^ ^^^^^^^^^^ ,„ . :,wh.rcmus,noUcesoMhe,ranM.tl.a- tor how how many lUM-rtions. ^^^ j,^^^,,,^? .0 ^Vhat » understood by Supplen^nt 1 ^^^^^^ ^^^^^_^^ ,^^ ^^^,^^,,, .. Kor what purposes n,ay Supplementa -^ ^^^ ^^,^,^,,,,,n.ny 1-.- ,, ., Whatproeeed,ngsarenecessar)to \ Paten'grantmg further power.. 25 .rporation ? Lanip^e. cxami>^c. rship'-ii" an insolvent r this A'l? „Mlcr this Alt- uivortiscuiont? iH'Ht? d aiv \icni? .;Ucnt he i;rantea? ^,l,..uH•nl■,.r^■ l^tu' M' 17-22 What conditions arc necessary in a Company in order to obtain Supplementary Letters Patent for increase or decrease of Capital Stock ? 24 Can Companys hold Real Estate ? 27 How may shares in the Capital Stock be issued without being subject to call ? 28 By whom arc the aflairs of the Company managed, and what is the greatest and the least number of such persons ? 29 What do you understand by Provisional Directors ? 30 Who may be a Director of a Company? 31 How may a Company increase or decrease it's Board of Directors ? 31 How may they change their chief place of business ? 32-33 How are Directors elected? 33 On what \nsis do the shareholders vote? 33 How may a Stockholder be represented by another jiockholder at a general meeting of the C'ompany? 33 How are vacancies in the Board of Directors filled? 33 By whom are such officers as President, Vice-President, Secretary, Treasurer, etc., elected? 34 If Directors are not elected at the proi)er time, how arc the affairs of the Company managed, and does such neglect dissolve the Company? J 5 Stato briefly the powers of Directors ? 37 What procedure is necessary inerder that a Company may borrow money ? 37 What limit is there to the amount the Company may borrow? • " •• 35 How may Directors collect Capital Stock ? 39 Can interest be collected on Calls that are unpaid after the day set for I f.uch payment, and what rate? 40 Can a Stock-holder pay in a greater amount on his Stock than that [required by the Calls of the Directors? 40 What rate of interest may the Directors pay on such dividends? \i How may the shares be forfeited? 41 I )ocs the liabilities of the Shareholders cease when a share is forfeited? 42 May the Directors enforce payment on Calls and interest, and in rhat way ? 43 State concisely the books and other documents required under this id to 1)0 kept by the Company? 44 By what persons and at what times may the books Ik.- inspected ? 46 What is the penalty to a Company neglecting to keep such Ixjoks ? 47 (^f what crime is a iiirector or officer of a Company held to Ik.' guilty, 10 makes, or assists in making an untrue entry or who neglects to make en les ? 48 When is a transfer of shares held to be valid ? 26 . ' ^ 49 Under what conditions may shares lie transferred, and what habihties do Directors incur in transferring shares not fully paid up 'f 51 May shares be transferre.l against which there are un[)aid calls? 54 What limit is there to the liabilities of share-holders ? 56 Is an Executor, Administrator, Trustee or other officer who holds Stock for other persons, liable, personally, for the unpaid amount of the Stock? 57 Can a Trustee, Executor, or other officer holding Stock and Trust vote at general meetings ? • ■ 58 State concisely the liahilities of Directors who pay a dividend tl>at in anyway impairs (Capital Stock ? , . 59 What liabilities do Directors incur in any other class of ('ompany, except I-oan Companies, when they make loans to share holders? 60 To what respect are Directors liable in respect of wages ? 62 Wliere must any summons or notice be served on a Company ? 67 May actions at law be maintained between a Company and one of its Stock-liolders, or l)etween a Stock-holder and the Company? 72 Within what limits may any Company incorporated under this Act have art agency or office"? ''' ■ . . '■ 73 I'rom what must a dividend not be paid ? 74 What proportion of the Subscribed Capital \% necessary to l)c repre- sented on a requisition calling a special meeting ? 76 To what documents is it not necessary to fix the corporate seal of the Company ? " 79 What penalty is a Company liable to that neglects to keep its name printed on a sign at the head office ? 79 What is the meaning of the word liniited as used in the name of a Company ? 79 To what penalty is an officer of the Company liable who fails to use the word limited in the name of such Company? 83 In what way and in what time may a Company forfeit this Charter? 85 \\lien must a financial statement of the affairs of the Company be laid before the Stock-holders ? - »\k m li \ .' Jnicl 27 iabiUtics Is? THE ONTARIO JOINT STOCK COMPANIES' AC'i. V ? lany id one of its der this Act to \>c rcpre- atc seal of the r.cep its name he name of a fails to use the this C:harter ? C;ompany l;e '.- I. [An Act respecting the incorporation of Joint Stock Companies l)y letters Patent. Her Majesty, by and with the advice and consent of the Legislative |Asscnil)ly of the Province of Ontario, enacts as follows ; — SHORT TITLE. L, This Act may Ik; cited as " T/ie Ontario Joint Stock Companies' Letters ^*"'" "«'•=■ \itent Act. R.S.O. 1877, c. 150, s. i. INTERPRETATION. 2. Where th-^ words following occur in this Act, and in all letters patent |nd supplemental y letters patent issued under the same, they shall be construed the manner hereinafter mentioned, unless a contrary intention itppears : 1. "The letters patent" shall mean the letters patent incorporating a ^mpany for any purpose contemplated by this Act ; 2. 'The supplementary letters patent" shall mean any letters patent nted to the company subsequent to the letters patent incorporating the ] impany ; 3. "'I'he company" shall mean the company so incorporated by letters "TheCompany;" Interpretation. "The letters patent ;" The supple- mentary letters patent ;" Item : "The undertak- ing;" 4. "The undertaking" shallmean the whole of the works and business of Ery kind, which the company is authorized to carry on ; 5. "Real estate" or "land" shall include all immovable real property of ^ry kind ; S 6. "Shareholders" shall be mean every subscriber to, or holder of stock "shareholder: ^thc company, and extend to, and include the personal representatives of till shareholder. R.S.O. 1877, C. 150, s. 2. " Real Estate," "Land;" LETTERS PATENT. 1 3. — (i) In case' a «. .irporation, now or hereafter incorporated under the UniB of the Imperial Parliament of (Jreat Britain and Ireland, desires to carry oi|kny of its business within the Province of Ontario, the I.ieutenant-Oovernor in Jpouncil may, by letters patent under the (ireat Seal of the Province, grant to iuth company, and such company may thenceforth use, exercise, and enjoy wii^iii the Province, any powers, privileges and rights set forth in the letters ■^ lit, as desired in or for carrying on the business of the company and which it B within the authority of the Lieutenant-Governor in Council to grant to a cdifcahy tinder this Act. ^(2) No siich letters patent shall be issued until such corporation has de- ed in the office of the Provincial Secretary a true copy of the Act of imenl, charter or other instrument incorporating the said company, verified He manner which may be satisfactory to the Lieutenant-Governor in cil. (3) The letters patent, referring to such Act, charter or other instrument bresaid, or a copy of such Act, charter or other instrument aforesaid cer- [ under the hand of the Provincial Secretary, shall lie sufficient evidence, proceedhig in any Court in this Province, of the incorjwration of the |ny. sj Certain powers, etc., may be granted by let- ters patent tu companies incor- porated under Imperial Stat- utes;" Copy of Act or other instrument of incorporation to I)e y letters patent. Rev. St.-it. c. 167, s. 4. Provision res- (lectin); name of cunip.-inies. Notice to l)c given in the 'Ontario Gazette' any I.eu- islalnrc may iii ceriain cases he acvi'pte 1 as notice f.r letters pnuiit. (4) This section shall not apply to matters provided for l)y chapter 168 of these Revised Statutes. 43 V. c. 19, ss. 1-4. 4 The Lieutenant-Governor in Council may, by letters patent under the Great Seal, grant a charter to any number of persons, not less than five, who shall petition therefor, constituting such persons and others who may Ixicome shareholders in the company thereby created, a lx)dy corporate anil politic, for any purposes or objects to which the legislative authority of the Legislature of Ontario extends, except the construction and working of railways, and the business of insurance other than as provided by section 4 of The Ontario Insurance Act. R. S. O. 1877, c. 150, s. 3. 5 The name of the Province of Ontario or of some locality there- .ill constitute part of the name of every company incorporated under this. . .ct, except in cases where the Lieutenant-Governor in Council otherwise directs. 44 V. c. 18, s. 2 ; 48 V. c. 32, s. I. 6 The applicants for the letters patent must for at least four consecutivu weeks give notice in the Ontario Gazette, of their intention to apply for tlu' same, stating therein : — (a) The proposed corporate name of the company, which shall not be that of any other known company, incorporated or unincorporated, or any name liable to be unfairly confounded fherewith, or ot jrwise on public grounds objectionable ; (h) The object for which incorporation is sought ; (r) The place or places within the Province of Ontario, where its openi tions are to be carried on, with special mention if there be two or more sue h places, of some one of them as the chief place of business ; {(/) The amount of capital stock ; ' ' (e) The number of shares and amount of each share ; (/) The names in full and the address and calling of each of the applicaiiis with special menficn of the names of not less than three of their number, win are to Ik; the first directors of the company. R.S.O. 1877, c. 150, s. 4. 7. — (i) At any time, not more than one month after the last publicatici of the notice, the applicants may petition the Lieutenant-Governor, through lli> Provincial Secretary, for the issue of the letters patent. (2) The petition must state the facts reijuired to be set forth in the notid and must further state the amount of stock taken by each applicant, and nl the amount, if any, paid in ujkju the stock of each applicant. (3) The petition must also state whether the amount is paid in cash or b -; transfer of property, or how otherwise. (4) In rase the petition is not signed by all the shareholders whose nanii are proposed to be inserted in the letters patent, it shall be accompanied 1)\ memorandum of association, signed by all the persons whose names are to so inserted, or by their attorneys, lawfully authorized in writing, and such nHr;| oiandum shall contain the parti<:ulars re(iuire(l iiy the next preceding sectioy (5) The petiiion may ask for the embodying in the letters patent, of w\ provision which otherwise under this Act might be emlwidiod in any by 1 of the company when incor|)oratcd. R. S. O. 1877, c. 150, s. 5. 8. Where a notice has been published according to the rules of i Legislative Assembly for an Act incorporating any company, the incorporall whereof is sought for objects for which incorporation is authorized by i' Act, anJ a IJiil has been introduced into the Assembly in accordance v ; j -29- atcnt under the ; than five, who ,ho may »)c<^»"^^; • . corporate am\ c authority of the Kkingofrailwa)^. section 4 "^ ^"' cality there- f d under thu. ^|<-t. otherwise directs. it four consecutive :i to apply for tho ,,.hich shall not be „corporated, or any Eon public ground. ino, where its opera^ '^\^o or more sucb less ■, such notice, and is sulisciiuoiuly tlirowii out or witlidiawn, llicii in case a pcJlioii to the Lieutcnant-dovernor for llic iiic()r|)orali()ii under tliiri Act of tlic (•()m|)ai)y is lilcd with the I'rovincial Secretary witliin one inontii iVoni llic day of the termination of the Session of the .\^^c•nll)ly for wliirh the notice was given, the notice may be acce[)ted in her of the ncjtice re:juiretl i)\' section 6. R. S. C). 1877, c. 150, s. f). 9. 'l"hc I.ieutenant-Ciovernor may dis])ensc witli tlie nulilication of the ' ieiii^^namynuv. m section 6, m any case ni winch the ca[)ital 01 the pro- :,^; wui. noti'x posed coini)any is $3,000 or under. K. S. (). 1.S77. c. 150, s. 7. ;achoftheapplK^n^;; c of their number, vvn 877, c. ^<,o,^.^■ plicant. ; |,unt is paid m cash orb LarehoklerswhoscMja-J> L be accompanve \ ^, e next precedmg sccu 1 the letters patent, o^^ reml>odiod in any I'V L e. 150, s. 5- LinR to the rules ot kcmbiy >" accordant when capitui $jooo or under, 10. Before the letters patent are issued, the applicants must establish to,, ,. . , ■ ,■ r I I, • ■ 1 ■ r , I ,-,- 1 1 leliimnary con- the satislaction ot the I'rovmcial Secretary, or ol suc;i ottier olticer as may ueiiiiion>, to be charged by order of the I.ieutenant-Ciovernor in Council to report there- "'"'''"■''*''• on, the sufficiency of their notice and ])etition, and that the proposed name is not the name of any other known incorporated or unincorporated eomi)any. R. S. (). 1877, c. 150, s. 8 (1). < . ,,,, ■>•■,,. 1 > • ,>.•!-, Piuiif of mailer-, 11. — (i) i lie I'rovmcial Secretary, the Assistant rrovincial Secretary unda- tiiU .\ct. or such other officer, ma)' for the purposes aforesaid, or for any other jiurpose under this .\ct, take and keep of record any requisite evidence in writing under oath or affirmation. R. S. O. 1877, c. 150, ss. 8 (2), 18 (3), (2) I'n.iof of any matter which may be necessary to be made under this Act may lie made by affida\it or deposition before the l'ro\incial Secretary, or Assistant l'ro\incial Secretary, or before any justice of the Peace or Com- missioner for taking affidavits, or Notary Public, who are hereliy authorized' [and empowered to administer oaths for that purpose. R. S. O. 1877, c. 150, s. O7. N.Tiue and 12. The letters patent shall recite such of the material averments of the "''J'=>-''- "^ •-°"'- e and petition so established, as the l.ieutenaiit-Covernor may find con- vaiiLi"''* [venieiit to insert therein, and the Lieutenant Ciovernor may, if he thinks lit, !;i\e to the company a corpcjrate n.xme different from the name proposed by he aiiplicants in the publislieil notice; and the objects of the company as stated in the letters patent may vary from the objects stated in the said notice, arovided the objects of the company as stated in the letters patent, are of a bimilar character to those contained in the notice published as aforesaid. R. ^. 0. 1877, c. 150, s. 9. 13. Notice of the granting of ihe letters patent shall be forthwith '^\'<^^'^f^^^^l''\^^tC^ by the I'rovincial Secretary, in the Ontario CiazetU\ m the form of Schedule Compiciion oi' k to this Act; and from the date of the letters patent the persons therein'"""''"''""""' lamed and their successors shall be a body coriiorateand politic liy the name pentioned therein. R. S. O. 1877, c. 150, s. 10. 14.— (1) In case it is made to ajipear that any company is inciorpiirated ^,'|^i"'';j,|"||J,',""',': nder a name the same as, or similar to, that of an existing cumjiany, it shall i->ry ii^tters pat- lawful for the l.ieutcnant-Covevnor in Council to direct the issue of suii-*^"'' lementary letters patent reciting the former letters, and changing the name the compan\' to some other name to be set forth in the sujiplementary tters patent' and no such alteration of name shall effect the rights cjr obli- ^tions of the company ; and all proceedings may be continuetl and com- snced by or against the comjiany by its new name, that might have been |nlinued or commenced by or against the company by its formi.-r name. (2) The High Court may comiiel an apiilication under this section when- ,~ „■ ^ ' V -^ 11- t..oiiiiH-'iiing er a company improperly assumes the name of, or a name smiilar to, that '-lumg.: of namo. Ian existing company. R. S. O. 1877, c. 150, s. 11. rr^ ; i! y It — 30 — Ciirt.i'm inf.irinai- 1 5, 'fj^c i)io\isi()iis of lliis Act relating to matter |)rcliiiiiiuiry to tlic issue liii'i'ic'^iuiteis' 'of the Icllurs iintcnl -h.ill 1)L' (Irciiiuil directory only ; and no letters [wlent or i''"^"'- supplementary letters patent issued under this Act shall he held void or void- ahle, on account of any irregularity in any notice [)rcscribed iiy this Act, or on account of the insufficiency or absence (jf such notice, or on account of any irrcLiularity in respect of any other miller |)reliniinar\' to the issue of the letters patent or sup;)leuientary lellers i)atent. R. S. (). iSy- c. 150, s. 13. General c.Mp..r. jQ Iv.ciT c iiiipanv SO incorpor ii(jd liny ac(iuire, hold, alienate and con- toinpaiiii;^. vey ical estate suhject to any restrictions or conditions m the letters patent set forth, and shall forthwitii become and i)e invested with all rights, real and j)er- sonal, heretofore liekl by or for the comjiany under a trust <:reated with a view to its incor[ioration, and with all the powers. ()rivileges and immunities recpiisite to the carrying on jf its undertaking, as though the company had been incor- porated b)- a special Act of the Legislature, making the company a body jjolitic and corjiorate. and embodying all the [irovisions of this Act, and of the letters patent. R. S. O. \'^^Ti, c. 150, s. 14. .Sub-(Uvi.sion bliarcs. tif 17. The direi tors of the company, may at any time, make a by-law sub- dividing the existing shares into shares of smaller amount. K. S. (). 1877, c. 1 50, s. 1 5. r.y.iiiwi I,) in. Ig, ..(1) 'J'he directors of thf comjjaiiy, at any time afler nine-tenths of cru.ihi; npiui . j|^^ capital stock of the comjjany has bjen taken uj), aiul ten per centum there- on paiil in, but not sooner, may make a ,);,-law for increasing the capital stock of the <'i>creniion .IS lo j Q, With regard to the increa.se of the capital -^lock of any company in- i'M;'r'^l^c'')ft.^piuW:orp()l■atecl under the Act aiithori/.ing the granting of charters of incorporation ofjuiiii sio.k to manul'acturini;. mining and other companies, iiassed in the 27th and 2Sth 27JSV. C.23. years of the reign of Her Majcstv, chaptered 23, the incorporation of which is subject lo the control of the I.igislature of Ontario, the I'rovincial Secretary, or sut'h other officer as may be named for liie |)ar|)ose, is not bound to sign the notiie mentionetl in subsection iS of section 5 of the said Act, and is to exercise his discretion in respect of the same, in view of all the facts, and sub- ject to the (iTection of the i.ieulenant-Ciovernor in C^ouncil. 'I'his section is to be construed as declaratory of the intent, meaning and effect of the said ■lub-section. .p) \'. c. 16, s. 32, /(//■/. KecUiciionofcap. 20. (i) Thc dircctors of the compauy if they see fit at "any time, may ""'• make a l)\-law for det're.ising the capital stock of the company to any amount wliich they m.iy consider sufti( ient for the due carrying out of the undertaking of the com|)any, aiiv vDiJ- • this .\' ;ofthclcltcrs i. 13- enale and con- lers patent set , real and per- iod with a view uiitiesre(iuisite ad iieen in<-or- ,Y a l)ody \)ohlic h\ of the letters ,0 a bvlaw sub- K. S. (). '»77>c. ei- nine-tenths of „er centum therc- , t\ie capital slock : fov the due carvy- ihc shares of the -are to he allotted; . ahsolutely in the • anv company in- •s of incorpovat.on Khe 27th and 2J^th '\ration of which >s hovincial Secretary, nut hound to sign [ said Act, and is o i the facts, and suo \\\ 'Phis section IS d'cffectof thesaid L at -any time, may i>.ny to any amoun [,; of the undertakm^; |c,f the shares of the Ce or rules by which i L. at the time of tbe] temaii as thou.h the ' 17 (1-3)- ' 21. No by-law for increasini; or decreasing tiie capital slock of tlie com J;^^'"'|'||;> '•'"*^^^^| pany, or sub dividing llie ^hares, sliall iiavu any force or cfi'ect, until attur it i.y siia.cih.i.iiT-. has been >.»n( lion^d l)y a vote of not le^s than two thirds in value of tlie share- "''|),;,;!||I","^^^^^^^^^^^^ holders at a },;eneral meetinj^ of the company duly called for considering; ihc i>-ii<;'-> iMum. same, and afterwards conririued by supplementary leltuis patent, K, S. I). I.S77, c, 150, >, 17 (4), 22. ( I ) At ;;nv lime n(/t more tlum si\ niuntiis after tiie sanction of such ''>-■"""" i>" --"p- by-laws, the directors mav pelilion tin.' I.ieuten.mt-llovernor, through liie i'ro- iiU'i-i'iieiii. . vincial Secretary, for ihe issue of sup[)lementa.r)- letters patent to couiirm the same. (2) With the petition they shall iiroducc the bylaw, .tnd establish to the ,"vi"";. «:tr to . / . . , ,, • ■ I . ,• i 1 ,-,■ 1 lie 111 "iluccd Willi satisfaction ol the rrovincial ,Si.'cretarv, or ol siicii otiier olhcer as may lie iiciuiou. [charged by order of the I.icutenant-dovernor in (Council, to report thereon the due passage and sanction of the b)-law, and if the petition is in respect of in- v [crease or decrease of capital, the /w/rr/zV/f character of the in<:rease or decrease ' [of capital, thereby provided for, and except as herein otherwise i)io\ided thai {notice of the application lor suiipleiv.eiilary letters patent has been inserted for ifour consecutive weeks in the Oii/tuiii (,\i:,'//c. K. ,S. ( ). 1877, c. 150, s. 18 [i, 2). {-!,) Where the capital of the comp.iny. or sui^h cipiial as increased, docs ^V'"" "o«i«-<-'' ■" , .K ,t I ■ . , /■ 1- " ■ 1 1 ■ . ' ',,\,i. I 1 1- may bo inol exceed $3,000, the I .iciilenanl-i lovernor may dis[iensc with the insertion u,.pcii~>;'i wiih. lin tlie Ontario Ciazc/U of a notii e of the applicition. 45 \'. c. /> (2), 23. Upon due proof so iviade, the l.ieulenant-( lovernor in f'oumil may ''.r.iiitin.;; of sup- ,p;rant such supplementary letters patent under the (lieat Seal; and p.()tice Lu'"i''s''p.'iciii. ^thereof shall be forthwith given by the Provincial .Secretary in the Ontario |6'i?C(7/(', in the form of the Schetlule li lo this Ael ; and thereu[)on, from the '"^'''''''•' ''"-"'■''"• jale of the sui)iilementary pa[)ers patent, the shares shall be subilivided, or ,.j^^, ^,|-^,|j.|, ithe capital stock, of the comiiany sh.ili he and remain increased or decreased, i- R, S. O. 1. Such election shall take place yearly, all llie nicinliers of retiring, and (if otherwise (lualified) being eligible for re-electinii 1877, c. 150, s. 25 (i). 2. Notice of the time and place for holding general meetings of the com- No<'«. pany shall be given at least ten days i)reviously therein, in some newspaper published at or as near as nny be to the otVice or cliief (ilace of business of the company ; and also, in the case of companies iuiving a cai)ilal exceeding $3,000, either by publishing the same in the Ontario Gazette or by mailing the same as a registered letter, duly addressed to each shareholder at least ten days previous to such meeting; R. S. O. US77, c. 150, s. 25 (2); 4S \. c. ,52, b. 3. 3. At all gener.il meetings of the company, every shareholder shall be voua. entitled to as many votes as he owns shares in the company, and may vote by proxy ; 4.. Elections of directors shall be by ballot ; """'"• 5. Vacancies occurring in the board of directors may, unless the by-laws Vacancies, otherwise direct, be filled for the nnexi)ircd remainder of the term, by the board, from among the cpialified shareholders of the company ; 6. The ilireclors shall, from time to time, elect from among themselves, a rresidcnt and 'president of the company ; and shall also name, and may remove at pleasure, ^""•'"•■"■ all other officers thereof. R. S. U. 1877, c. 150, s. 25 (3 fi). 34. If at any time an election of directors is not made, or does not take ,^;J|^'",'',f^^'''||iJ^J^' eflect at the proper time, the lompany shall not be held to be thereby ilissolvcd ; reuiciii.;.!. but such election may take place at any general meeting of the comiJany duly called for that purpose; and the retiring directors shall continue in office until their successors are elected. R. S. O. J 87 7, c. 150, s. 26. 35. — (i) A comiiany incorporated uiuler this Act may by by-law increase [;'^'^«^K«.^f'i^™- or decrease the number of its directors, or may change the company's chief or uf head office, place of business in Ontario. (2) No by-law for either of the said jjurposes shall l^e valid or acted upon unless it is sanctioned by a vote of not less than two-thirds in value of the share-holders present, in person or by proxy, at a general inecting duly called for considering the by-law, nor until a copy of the by-law has been certified under the seal of the company to the I'roviticial Secretary, and also has been published in the Ontario Gazette. R. S. O. 1877, c. 150, s. 27. 36. The directors of the company shall have full power in all things to Powers and administer the affairs of the company ; and may make, or cause to be made, for','","" "^ ''"■"' the company, any description of contract which the company may by law enter into. R. S. O. 1877, c. 150, s. 28. 37. The directors may, from time to time, make by-laws n(jt contrary to uyia^..;. jaw, or to the letters patent of the company, or to this .Xct to regulate - (tf) The allotment of stock ; the making of calls thereon ; the payment Siock. thereof; the issue and registration of certificates of stock; the forfeiture of stock for non-payment : the disposal of forfeited stock and of the proceeds thereof ; the transfer of stock ; (/') The declaration and payment of dividends ; Dividends. (c) The numbers of directors, their term of service, the amount of their Directors. • stock ([ualification ; ((/) The appointment, functions, duties and removal of all agents, officers omccrs. f and servants of the company ; the security to be given by them to the com- pany ; and their remuneration ; M Hfl T — 34 — M««llnK% Fines. Comliict ofnfr; ('."•lu'rolly. {^onllrmalion i bylaws. ha (r) 'I'lic time at \vlii( li, and jilarc wlicro llic annual nicotinf^s of the mm- pany sliall lie hrld ; tlu' calling of ninl\', cease to ha\e force ; and in thai case no new hy law to the same or like effect shall have any force, until confirmed at a general meeting of the company. R. S. O. 1S77, c. 150, s. 21). Power 1(1 issue ln.ind.-i or (li:buii' lures, iinil to Rrniil morl- 38.- (1) In case a byla v, authorizing the saiiu', is sanctioned liy a vote of not less than two-thirds in value, of the said shareholders, then jireseiit in person or ''j proxy, at a general meeting duly called for considering the hy-Iaw, the directors mas' borrow money upon the credit of the company, and issue the bonds, debentures, or other securities of the com|)any, .and may sell tlie saiil bonds, debentures, or other securilies at such prices as may be deemed ex- |iedienl or be necessary ; bul no such di'i^cnturcs shall be for a less sum than .$100. (2) The directors may, under the like sanction, hypothecate, mortgage, or pledge the real or personal jiroperty of the company, to secure any sum or sums borrowed for the purpf)ses thereof. R. S. (). 1.S77, c. 150, s. 50. Speci.ii mecuiigs. 30. Oiic fourth part in wiliie of the shareholders of the company shall at all times have the right to (all a sjH'cial meeting thereof, for the transaction of ail)' business siiecified in su h written re(iuisition aiul the notice meelirig. R. S. O. 1S77, c 150, s. 31. callin;r the lOudenic of ly- laws. 40. .\ cop)- of any by law of the com[)any, under its seal, and piu'portinu to be signed h)- any oft'icer of the company, shall be received as prima facu evidence of the bylaw in all Courts in Ontario. R. .S. (). ICS77, c. 150, s. 3:. Stock. pcTviiui 41. The stock of the company shall be deemed personal estate, and shal' estaic. ],(^ transferable, in such maimer only, and subject to all such conditions ami restrictions as by this Act, or by Ihe letters-i)atent or by-laws of the company, may be jjrc.-'cribed. R. S, O. 1877, c. 150, s. 33. ^ .Mhilni.Mil I siock. 42. Tf the letters patent make no other definite provisicm the stock of the company, so far as it is not allotted thereby, shall be allottctl when and as tli> directors by by-law or otherwise ordain. R. .S. O. 1-^77, c. 150, s. 34. % i| I). I'i'iposalofstoik rayincTit to pn-siilciit of directors. 43. No by-law for the allotment or sale of stock at any greater di.scoui'; or at any less [jremium than what has been previously authorized at a geneni meeting, or for the i)ayment of the president or any director, shall be valid 1 1 acted upon until the same has been confirmed at a general meeting. R. S. O. 1877, c. 150, s. 35. of ea "35 >f ihc cnm- ■ tlif hoard flits as to !S admitting irnpany ; ; hut every )f, unless in ly called for ;)'r the com- at time only, ir like effect jtnpany. R ;d hy a vote ;n present in ^ the hy-law, and issue the • sell the said deeUK-d e\- Icss sum than , mortgage, or ? any sum or S. 7,0. ipany shall at transae.tion ol I' calling the nd puriiortini; s prima facie 1 ^O, s. ^.■ itate, and shal' )nditions and the company. he stock of the len and as the ^. 34- cater discount 1 at a general all he valid or |ing. R. S. ( ). 44. The directors of the company may call in and ilcnian I tVoin the J,;;[,;!|/'" '""""'■ shireh)!ih'rs thjreof, rcip-'^tively. all sum, of m ):i • hv tliem suh-cnlied. at s'lch tim.-i a:ii p'acj'i ail \-\ si 'ii piyiii-mts o- i i ;" il ii m'-!, a i th ; letters piti'Mt, or thi.s A:r, or th.* hylr.vi of \\^ c i u n i • r.^jirj n all > v and interest shall accrue and fiU due, at the legal ra'.e fur the tunc being, wy^^u ilie amount of a'ly u ipiid i dl. fr.jui tli.' day ajjp linted !<>• ;ii/;ii ■ it of su h < ill K. S. (). 1.H77. c. 130, s. },U. 46. Not less than ten per centum ujioii the allotted stock of the company *-•*"• shall, iiy means uf one or mere calls, lie c.Uled in and made payable within '•''\^^\".^;^'\".^^\^^,_ year from the incorporation i^f the t'oinpaiiy ; tli ■ residue, whtu and as tlie hy laws of the compaiiN' iliiect. K. S. (). 1S77, c. 150, ^. 37. 46. The company may enforce payment of all calls and interest llnTeon. ';,|'^''|||';;»["j;,;;[ hy ad.ioii ill .my Court of I ompetent juiisdictioii ; and in sucii action it shall i'yi>cii. thereof' {!>) The names alphabetically arranged, of all persons who are or ha\e been shareholders ; (<•) The address and c.dling of every such pers.m wiiile such sliaivhoKler . (1/) The number of shares of stock held 1)\ •h sharehol tier ; (<•) The amount paid in, and remaining unpaid, respcetivc!v, Oii the stock of each sharehokler ; (A) All transfers of stoc'<, in their order as presented to the company for entry, with the date and othor particulars of each transfer, and the date (if the entiy thereof; and i.| '•^\ r" (,(,') 'I'lic names, addresses and calling,' of all persons who arc or have been (lircddrs df tlu; loiiiiKiiiy ; with thf soveral dati's nt which ea. ^j^^_ order or judgi'incnt of some competent ( mirt in that behalf, shall be valid *■ for any purpose whatever, save only as exhibiting tlu' rights of the parties tiiereio toward faih otiicr, ,uid as rendering; liie transferee lialile, rcn.iiiy for false 66. No director, ofl'iecr or servant of the company, sliall knowingly make entries, ^^ assist to make any untrue enti\ in any such book, or shall refuse or neglect to make any jiroper entry therein ; and any person \iolating the provisions of this section shall, besides any criminal lial)ilil\- which he may thereby incur, be liable in damages for all loss or injur)' whii h any i)erson inten sted may have sustained thereby. R. S. ( ). 1S77, e. 150, s. 47. ^ L'mliility for refusal lu nllir. ins|i,.cliun of books. to lie nual ye.irly 56. .Niiy director or offieer who refuses to pirmit any person entitled thereto to insjiect such book or books, or make extracts therefrom, shall forfeit and pay to the party .iggrieved the sum of $100 ; and in case the amount is not iiaid within seven days after the recovery of judgment, the Court in which the jiulgment i:. recovered, or a judge thereof, may direct the im|)ris()nment of the offe'ider .br.'^iiy period not exceeding three months unless the amount with costs is sooner paid. R. S. C), 1S77, c. 150, s. 4S. Lists of share- 57. — (i; hvefy coiiiiiany incorporated under this Ait shall on or before iiuMu^iTof aiT;iii"s°' the first day of February, in every year, make a list, in duplicate, verified as is hereinafter required, of all persons who on the thirty-first day of December jireviously, were shareholders of the compaii)' . and such list shall state the names alphabeticall)- arranged, and the addressi'S and callings of all such per- sons, the amount of stock heltl by them, and the amount unpaid thereon ; and shall also make out a summary in duplicate, verified as hereinafter re(iuired, of the state of the afairs of the company, on the thirty-first day of December preceding. R. S. (j. 1877, c. 150, s. 49 (t) ; 45 V. c. 17, s. 4 {t,, fart). (2) The summary shall contain the following particulars : Jirs/h, The nanus and residences and post office addresses of the directors, secretary, and treasurer of the company ; Si-ivfiJ/v, The amount of the capital of the company and the number of shares into which it is divided ; , Contents of state- ment. — 37 — have liccn )n iM-'camc 1 l)(»ok, (if , or iiiulcr ill lie valid I ho parlies hi interim, litors, until 8 \. c. 33, ry (lay, cx- harcliolders he otTice or Icr, cTi'ditor 150, s. 45. ortiiig to l)c or against ivin.nly make c or neglect ruvisions of .•rcljy ineiir, LM\ sled may son entitled ,liall forteit amount is rt in wliich risonment he amount )n or before verified as jf December slate the ill such per- lereon ; and er re(iuired, )f December fart). s-.es of the ; number of Thirdly, The number of shares taken from the commencement of the company -p to the thirty first day of l)cceml)er precethn^ the date of tiie summary ; I'oiirlh'.s, 'I'hc amount of stock (if any) issued free from call ; if none is so issiieil, thi iae i)ep„,i, »^i,h deposited with the I'rovincial Secretary, on or before the eighth day of l''eb- ''r"^"";"! Secre- ruary ne.xt after the time hereinbefore fixed fi)r niaking the summary. R. S. O. '"^^' 1877, c. 150, s. 49 (5) ; 45 y. c. 17, s. 4 (3, A//-/). (7) If a com[)any makes default in complying with the provisions of tiiis Penalty f'^f J*- section, the comjiany shall incur a |)enalty of $20 for every day during which the default continues, and every director, manager or secretary of the company, who knowingly and v.ilfiilly authorizes or permits such default, sliail incur the like penalty. R. 8. O. 1877, c. 150, s. 49 (6). • -3« Wlien eecllon .ml 10 apply. (8) Tliis section shall not bv applied to any company until the first day of Kebruaiy next after tlio first tliirtytirst day of l)eceml)cr, after the company lias been organized, or lias t^onc into actual operation, whiclie\er shall first liap|>en, and shall nt)t lie held to apply to an\- conipaii)' wliicii has ceaseil to carr\ on business ; and upon its \)c\\\^ jiroved that any company to whiih this A>'t applies diil not transait any business (other than the payment of ta.xes or the making of a return, or the furnishin,^' of any list, statement, or other infor- mation to t^ie (lovernineiit of Ontario, or to any officer or dei)artment thereof) (hirins^ the year for which it is alleged a return in aci-ordance with the recpiire- luenls of law has not been made such ccMnpany shall be deemed to have ceased to carry on business within the mea: iig of this sub section. 44 \". c. !I, ss. o> it ■ ! ■•-' l?i ;1 .-.1. rompany not 10 58. The Company shall not be bound to see to the execution of any respect of "mists, trust, whether express, im[)lied or constructive, in respect of any share ; and '•■"^- the receipt of the shareholder in whose name the same stanils in the books of the t'ompany, shall be a valid and binding discharge to the company for any diiidentl or money payable in respeit of such share, whether or not notit-e ol the trust has been given to the coniiiany ; and the company shall not be bound to see to the application of the money p.iid upon such receipt. R. S. (). 1S77, c. 150, s. 50. Conti-.trts. etc , 59, (1) I'Acrv Contract, agreement, engagement or bargain made, and wla-n til lie liiml. in.' i' 1 ' > 1 ' ^ 1 1 '1 inn uii company, every bill ot exchaiigc ilrawn, accepted or endorsed, and every prom- issory note and checpie made, drawn or endorsed on behalf of tl e company ~ bv any agent, oflicer or servant of the company, in general accordance ' with his powers as such under the by-laws of the company, sliall be bind- ing upon the company ; and in no case shall it be necessary to have the seal of the company affixed to any such contract, agieemcnt, engagement, bargain, bill of exchange, jiromissory note or chcHjuc, or to prove that the same was made, drawn, acci'pled or endorsetl, as the case may be, in jiursuance of any bv-law, or s])ei-ial vote or order : nor shall the party so acting as agent, ofiicer or servant of the company, be thereby subjected individually to any liability whatsoever to any third p.irty therefor. {2) Nothing in this Act shall be construed to autliori/e the company to issue any note payable to the bearer thereof, or any -iromissory note intended to be circulated as money, or as the note of a bank, or to engage in the busi- ness of banking or insurance. R. S. O. 1S77, c. 150, s. 51. PiM\iso as t.> nuics, bankinii anil insurance. Ncit 10 purchase slccW in other corporations. 60. No company shall use any of its t'unds in the iiurchase of stock in (llier corporation, unless expressly authorized by by law confirmed at a general meeting. R. S. O. 1S77, c. 150, s. 5; M.ihllily holders. S.:t off. Gl. — (1) I'^ach shareholder, until the whole amount of the stock has been '^"^ paid up, shall be individually liable to the creditors of the comjiany, to an amount cMjual to that not paid uj) thereon, but shall not be liable to an action tlurefor by any creditor, before an execution against the company lias been returned unsatisfietl in whole or in jiart ; ami the amount due on such execut- ion, but not beyond the amount so uiipai'! of his s;!id stock, shall be the amount recoverable wilh t osts against such shareholder. (.') Anv .sharcholilcr may plead by way of defence, in whole or in part, any set-off which he -.'ould .set uj) against the company, except a claim tor unpaid dividends, or a salary, or allowance as a jiresident or a director of the company. 4S \'. c. ^^, ss. 2, .v — 39 — - . 1*1. I 1 I 1 1 Shareholdern not 62. 'Plio shnroholdors of the comnany shall not as • uich he lield respon- ||„i,ic Leypmi • sil.lo for any act. (idiuih. or lialiility whatsoever, of the company. ()r for any ^"•™"' "f ^'"'■''• cngaj;ement. claim, jiayment. loss, injury, transaction, matter or thing wliatso- ever, relating to or ronnceteil with the company, l)eyon;l the nnpaii! amomit of their respective shares in the capital slock thereof. 4S V. c. 33, s. 8. 63. Xo person holding stock in the company as executor, administrator, J^\l'1l^^'^,^^^{^. guardian or trustee, shall lie jiersonally subject to liability as a shareholder :iiaiik. but the estates and funds in the hands of such person shall be liable in like manner and to the same extent, as the testator or intestate or the minor, ward, or person interested in. the trust fund, would be, if living and competent to act and ho'ding such stock in his own name. 48 \'. c. 33, s. 5. 64. No person holding stock as collateral security shall be personally MoriRagees. subiect to liai)ility as a share'.iolder, but the i)erson pledging such stock as such collateral security shall be considered as holding the same, and shall be liable as a shareholder in respect thereof 4S W c. ^^t,, s. 6. 65. Every executor, administiator. miardian or trustee, shall represent Tmsiee, etc., the Slock in his hands, at all meelmgs i)l the company, and may vole accord- inglv as a shareholder : aiul every person who pledges his stock may ncverthe- MonciRor of less represent the same at all suih meetings, and may vote accorclingly as a -it>'^i' "'"y "oie. shareholder. R. S. O. 1S77, c. 150, s. 56. Sir (,'ap. 156. s. .(t Q6. I'he directors of tiie company shall not declare or pay any dividend i-iabiiiiyofa^n-c. when the company is insolvent, or any divitlend the payment of which renders iiivuicii'ii'wiu:n' the company insolvent, or diminishes the cajiital stock thereof, but if any ™"','"J,">''^ ""'"'■ directcn- |)resent when such di\isent, within twenty fom- hours after he has become aware thereof and able so to do, enters on tliL' minutes of the board of directors his jjrotest iicm-.-xiircnor .igainst the same, and within eight days thereafter causes such [irotcst to be JUIiJIi'j',^""' "'"■ ' ]niblished in at least one newspaper i>ul>lished at or as near as may lie possible to, th. office or chief ]il.ice of business ol the compaiiv. such director mav thereby, and not otherwise, exonei'ate himself from liabilil)-. R. S. (). 1S77, c. 150, s. 57. 67. N'o loan Lih. l be made bv the comp.my to any shareholder, and if N"'"'-!" I'v '"'n- ■ , HI- ',1 •• 1 ■ , ■ , panv to snare- sucli loan :.- r.iur- nil ijirectors and other officers of the comi)anv making the iioMcr. same,;ind '-i v.n: cv. ;,.>.-,enting thereto, shall be i.)intly and severally li.ible to the ■ omp.'iin' for die amoiiiit thereof, and als-) to third parties, to the extent of such !.• ■ ■ ■ 111 legal int. rest, for all debts of the con pany conlracted from the ^X!^^ '" '''"''"' tim.'tttc.i n, iking of the loan to that of tlie rei)a\iiicnt thereof; but this section sh; 11 c it apply lo a lUiilding Society, r » , eom|iany incorporated for the len iing of money. R. S. (). 1S77, c. 15..,, .,. .,S. 68. 'he directors of me C(Mii|iany shall be jointly and severalh lialile to the labourers, serv.uiL- and a|)preiuices thereof, 'or all debts not exceeding one year's wages due for services i>erfornud for the company whi'i' they are such directors respeclivels ; but no d:rect(^; siia'I be liable to an action therefor, unless the company has been su''d therefor wiil in one year ."t'ter the debt be- came due. no'- yet unless such direi lor is s;;e'i I'lerefor within one se.ir from tl.e time when he cea-.,-,! to be su' h dire lor, nor )et before ,111 ext'culion against the company has l.eei -.et'iriied ur-ai,'''ied in whole or in \v\r{ : and the amount due on sucii <\ 'uUio' ,h.ill he the amount recoverable with costs against the directors. R. S. O. >■' /J, r. 150, s. 5c;. I.i.-\liility n( li i'«i '01 s f(,r waj;.s. ^w Korfeilure of charter for iion- uter. p!.«tion,'e™.? 69. In an action or other proceeding, it shall not he recjuisitc to set forth ho« tob'esct the mode of incorporation of the company, otherwise than by mention of it pweedin|i! Under its corporate name, as incorporated by virtue of letters patent, or of letters patent and supplementary letters i)atent, as the case may he under this Act ; and the letters patent or supplementary letters patent themselves, or any exemplification or cojiy thereof under the (Ireat Seal, shall be conclusive proof • of every matter and thing therein set forth. R. S. O. 1877, c. 150, s. 62. 70. The charter of the company shall be forfeited by non-user during three consecutive years at any one time, or if the company does not go into actual operation within three years after it is granted : and no declaration of such forfeiture by any Act of the Legislature shall be deemed an infringement of such charter. R. S. O. 1877, c. 150, s. 63. ^'tenTct""l '^^' — ('^ "^'■' l''^'Utcnant-C3overnor in Council may from time to time he lUedby Order establish, alter, and regulate the tariff of the fees to l)e paid on applications 111 Council. under this Act : may designate the Department or Departments »'■ ough which the issue of letter- patent or supplementary letters shall b .. Je ; and may prescribe the forms of proceeding and record in respect tht i. )i, aiiu all other matters requisite for carrying out the objects of this Act. R. S. O, 1877, c. 150, s. 64 (i) ; 47 V. c. 27, s. 6. 2 Such fees may be made to vary in amount, under any rule or rules — as to nature of company, amount of capital, and otherwise that may be doomed expedient. (3) No step .shall be taken in any Department toward the issue of any letters patent or sui)plementary letters patent under this Act, until after all fees therefor have been duly paid. R. S. O. 1877, c. 150, s. 6| (2, 3). Subsisting com- 72. — (i) Any Company incorporated, for purpos'js Or objects within the uiideVt"h?/.\ct'!''' *''"0P<^ of this Act, or within the scope of this Act as 't may be hereafter amen- ded, whetlier under a special or a general Act, and being at the time of its application a subsisting and valid corporation, may apply for letters patent under this Act; and the I.ieutenant-Ciovernor in Coun'il, upon proof that - notice of the application has been inserted for four weeks in the Ontario Gazette, may direct the issue of letters patent incorporating the shnrehoiders of the said company as a company under this Act, and thereupon all tht rig!' or ol)ligati()ns of the former company siiall be transferred to the new compr.ry, and all proceetlings may l)e contiimcd and commenced by or against the new company, that might have been continued or commenced by or against the old company, and it shall not be necessary in any such letters patent to set out the names of 'le shareholders ; and after the issue of the letters patent, the company shall be governed in all respects by the provisions of this .\ct, except that the liability of the shareholders to creditors of the tjld company shall remain as at the time of tlio issue of the letters patent. R. S. O. 1877, c. 150, s. 65 ; 45 V. c. 17, s. 3. (2) Where a comi)any is re-incorporated under the prec eding sub-section the l.ieutenant-Ciovernor may, by the letters patent, increase the capital stock of the company to any amount which the shareholders of the company apf)ly- ing for re-inc()r[)oration may. by a resolution passed by a vote of not less than two-thirds in value of those present in jierson or by ])roxv ra a general n'-cetiiig of the company duly called for considering the s.'".ie, have declared to i^e recjuisite for the due carrying out of the objects of the (;om[>any. (3) 'I'he resolution may prescribe the man>"^r \\\ which the new slof-k is to be allotted; and in default of its so doii'i' the control of the allotment shall vest absolutely in the directors of the n •' ' oiopany. 47 V. c. 27, s. 5. 41 — ^k is Diment s. 5. 73. Where an existing company applies for the issue of letters patent under the provisions of the preceding section, the Lieutenant-Governor may by the letters patent exttnd the jjowers of the company to such other objects within the scope of this Act as the applicants desire, and as the I.ieutenant- Ciovernor thinks fit to include in the letters [jatent, and may by the said letters patent name the first directors of the new company, and the letters patent may be to the new company by the name of the old company or by any other name. R. S. O. 1877, c. 150, s. 66 ; 45 V. c. 17, s. 3. 74. — (i) Where a company incorporated under a special Act or under this Act is Authorized to execute the office of executor, administrator, trustee, receiver, assignee, guardian of a minor, or committee of a lunatic, then in case the Lieutenant-Ciovernor in Council shall approve of such company being ac- cepted by the Higli Court as a Trusts Company for the purposes of such Court, the said Court, or any Judge thereof, and every other Court or Judge having authority to appoint such an officer, may, with the consent of the com- pany, appoint such company to exercise any of the said offices in respect of any estate, or person, under the authority of such Court or Judge, or mcy grant to such company probate of any will in which such company is named an executor ; but no company which has issued, or has authority to issue, de- bentures shall be ai)proved as aforesaid. (2) Notwithstanding any rule of practice, or any provision of any Act re- tpn'ring security, it shall not be necessary for the said company to give any security for the due performance of its duty as such executor, administrator, trustee, receiver, assignee, guardian or committee, unless otherwise ordered. (3) The Lieutenant-dovernor in Council may revoke the approval given under this section, and no Court, or Judge, after notice of such revocation, shall appoint any such company to be an administrator, trustee, receiver, assignee, guardian, or committee, unless such company gives the like security for the due performance of its duty as would be recjuired from a private person. 45 V. c. 17, s. 2 ('-3)- 75. The liability of the company to persons interested in an estate held by the said company as executor, administrator, trustee, receiver, assignee, guardian, or committee as aforesaid, shall be the same as if the estate had been held by any private person in such capacities respectively, and its powers shall be the same. 45 V. c. 1 7, s. 2 (4). 76.— (i) The High Court, if it deems necessary, may from time to time appoint a suitable person to investigate the affairs and management of the company, who shall report thereon to the Court, and regarding the security afforded to those by or for whom its engagements are held, and the expense of such investigations shall be defrayed by the company ; or the Court may, if it deems necessary, examine the officers or directors of the company under oath as to the security aforesaid. (2) The Lieutenant-Ciovcrnor may also from time to time, when he deems it expedient, appoint an inspector to examine the affairs of the com- pany, and report to him on the security afforded to those by and for whom its engagements are held as aforesaid ; and the expense of the investigation shall be borne by the company. 45 \. c. 17, s. 2 (5, 6). ■ 77. — (1) Every Court into which money is paid by parties, or is brought by order or judgement, may by order direct the same to be deposited with any such company that may agree to accei)t the same, and the company may pay any lawful rate of interest on such moneys as may be a'.'recd upon, and when no special arrangement is made, interest shall be allov,ed by the com- pany at the rate of not less than three per centum annually. Exi^ting com- panies may apply for letter-; patent with extended powers. Appoinlment of conip.'tnies to act a^ (rtistcc, etc. T, lability of cotn* pary acting as trustee. Investiiiiition of atlairs of com- pany. Deposit with company of n\oniy paid into Court. 42 — ill Mode of invest- ment. !Ih!| Letters Tafni for certain piir- poses may !)»- );ranted to com- panies incorpor- ated under special Acts. Winding up .\clb to apply. (2) Every siicli comijany may invest any trust moneys in its hands in any securities in wiiicli prixatc trustees may hy law invest trust moneys, and may also invest sueii moneys (n) in the public stock funds or (lovernment securities of any of the Provinces of the Dommion, or in any securities guaranteed hy the United Kingdom of dreat IJritian and Ireland, or by the Dominion, or by any of the said I'rovinces ; {/>) or in the bonds or debentures of any municipal corporation in any of the said I'rovinces ; Provided that such company shall nr*^ in any case invest the moneys of any trust in securities prohibited by the trust, and shall not invest moneys in- trusted to it by any ("curt in a class of securities disapproved of by the Court. .15 V, c. 17, s. 2 (7-8). J.- (1) Where any company ha- been incorporated by a special Act, ij.f : the loth day of March, 1882, for {tin-poses or objects within the scope of t.ii:- r't, then, in case a resolution authorizing an ai)plication to the Lieu- tenant-Ciovernor therefor is |)assed by a vote of not less than two-thirds in value of the shareholders present, in nerson or by proxy, at a general meeting of the comi)any, duly called for considering the subject of such resolution, the Licutenant-Ciovernor in Council may from time to time direct the issue of letters patent to the company, embracing any or all of the following matters : ((?) Extending the powers of the company to any objects within the scope of this Act, which the company may desire ; (/') Limiting or increasing the amount which the company may borrow upon debentures or otherwise ; (c) Providing for the formation of a reserve fund ; {(i) Varj'ing any provision contained in the special Act, so long as the alteration is not contrary to the provisions of this Act ; (e) Making provision for any other matter or thing in respect of which provision might have been made had the company been incorporated under this Act. (2) No power to execute the office of executor, administrator, trustee, receiver, assignee, guardian of a minor, or committee of a lunatic, shall be ct)nferred under this section upon any company which has authority to issue debentures ; and no company incorporated under this Act, with power to ex- ecute such office, shall issue debentures. 45 V. c. 17, s. 4 (i, 2). 79. The company shall be subject to the provisions of any .\ct of the Legislature for the winding up of joint stock companies. R. S. O. 1877, *-'• 150, s, 68. SCHEDULE A. , ' (Section ij.) .NOTICE (If liliANTlNC LKTTEUS PATENT. Public notice is hereby given, that under 77/. Ontario Joint Stock Com/'.viies' Letters Patent Act, I.,elter3 Patent have been issued under tlio (iieut Seal of the Province of Ontario, bearing date the day of incorporating {here state the names, address and callini; of each corporator named in t!/-- letters /'atent\, for tlie puipoHe of [here state t/ie iindertakim; >/ tlie company as set forth in the Letters /\ileu:] l)y tlie name of \here state the name of the Company in the Letters J'atenI], witii a total caj)ital stock of § , divided into shares of .■? each. Dated at the office of the Provincial Secretary of Ontario, the day of Provincial Secretary. R. S. 0. 1877, c. 150, Sched. A. "liir busii easil in k aftei offici note; signc and with pena aftixe fully ». ' 43 — SCHRDUI.E P.. (S<\/iiiii :?j), .f NOTICK OF (illANTINi: SI' I'l'l.KM KNTAIiV I.KTTKKS I'ATF.NT. Public notice is hereby given, tliat \iiiiler 7'/(c Ontaiio Joint Sto^k Coinpani'.s Letter Patent Act, Suppleinentnry Letlcis Patent liavu liecn tliis ilay issued \iniltr llie (Jieat Seal of the Province of Ontario, lieariiig (lute the day whereby tiie total capital stock of {here statr t/ir mine o/th- Coi>i/>jiiy] is increased [.-i/- decreased, as the ,ase may Iv] from $ to i? [or wherel)y the capital stock of the company of sharcB of S! eacii is sub-divided into shares of if each]. Dated at the otiice of tlie Provincial Secretary of t)ntario, this day of A.B., I'rovincial Secretary. R. S. O. 1877, c. 159, 6V//tY/, i9. 1 52 VIC, CHAPTER 26. An Act respecting the limited liability of Incorporated Companies. . [.Issciihd to 2jrJ March, iSSij. Her Majesty, hy and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows : 1. This Act api)lies to companies incorporated imdcr T/ie Onlan'o Joint j^^^^^^^^^^^^^^i StocA' Com/'(7)iics' /.etters J^(itc//t .let, substi\ucnl\y U) iht passing of tiiis .Act, Act. and shall al^o be deemed to be incorporatetl with and added to T/ie Ontario ,^^y Joint Stoc/i Companies General Clauses Act as regards any comi)any incor- ^^^^- •'''="• '^■ porated by any special Act passed after the present Session of this Legislature. 2. The directors of every snch company siiall be jointly and severally Mireciors ii.ibie liable npon every written contract or nntlertaking of tlie com])any on the face °"a"sl"wiiid?" c whereof the word ''limited" or the worils "limited liability'' are not distinctly""!.^!'"* I'miied written or printed after the name of the coinpan\ where it lirst occurs in such '''"'"*■ contract or undertaking. 3. The company shall keep painted or alTixeil its name with the word Woni "limiieii' ,...,. to he ilisorteil i )lace ni which the .iii notices, etc. n "limited"' after the name, on the outside of every office or business of the com])any is carried on, in a consijicuous posiiion, in letters easily legible ; and shall have its name, with the said word after it, engra\en in legible characters on its seal, and shall have its name with the said word after it, mentioned in legible characters in all notices, ad\ertisements and other oflicial publications of the compan)-, and in all bills of exchange, iiromissory notes, indorsements, che(iues and orders for money or goods [uirporiing to be signed by or on behalf of such company, and in all bills of parcels, invoices antl receipts of the company. *^ 4. ICvcry such company which docs not keep painted or affixed its name, laii™ of I'ireccJi. with the word "limited" after it, in manner directetl by this .\ct, 'hall incur a '"s '-•='-"""• penalty of $20 for every day during which such nume is not so kept painted or affi.xed. . 5. Every director and manager of the company who knowingly and wil- P<^'iaiiy for per- fully authorizes or permits such default, shall be liable to the like penalty. "»"i»8 violation. Ml — 44 or'nmii'orTs'ing"'' 8. Evcry director, manager or otficcr of tlic compaiiy, and every person out »^o^"''Timi °" '^•'^ l)ehalf, who uses or aiitliori/es the use of any seal pur|)orli;;g to l)e a seal ed"onit. of the Company whereon its name, with the said word "limited" after it, is not so engraved as aforesaid, or who issues or authorizes the issue of any notice advertisement or other official i)uI)lication of such company, or who signs or authorizes to be signed on behalf of such company any bill of exchange, prom- issory note, indorsement, chccpic, order for money or goods, or who issues or authorizes to be issued any bill of parcels, invoice or receipt of the company, wherein its name, with the said word after it, is not mentioned in manner aforesaid, shall incur a penalty of $200 and shall also be personally liable to the holder of any such bill of exchange, promissory note, cheque or order for money or goods for the amount thereof, unless the same is duly paid by the company. '41 Short title. Interpretation, " Untrue state- ment." "Securities." "Company." "Directors." "Promoter." " Kxperi." Application. 54 VIC, CHAPTER 34. An Act respecting the Liability of Directors. [^Assented to 4th May, li^gr. Her Majesty, by and with the advice and consent of the l>egislative As- sembly of the Province of Ontario, enacts as follows : 1. This .Act may be cited as the ''Director's Liability Act, iSgi.^' 2. In this Act, unless the context otherwise re(iuires; — (i) "Untrue statement" includes a concealment of intentional non-dis- closure of a material fact known to the director or promoter which might reasonably influence a person in determining whether to api)ly or not to apply for shares, debenture stock, annuities on lives, or other securities of the com- pany for which application is invited. (2) "Securities" includes bonds, debentures, investment bonds; also policies, certificates, or other instruments of insurance, suretyship, or guarantee, or instruments evidencing contracts in the nature thereof. (3) "Company" includes any joint stock or other private corporation which issues, or is authorized to issue, shares, debenture stock, annuities on lives, or other securities as hereinbefore defined. (4) " Directors" includes the officers^ by whatever name known, appoint- ed to manage the affairs of the corporation. (5) "Promoter" means a promoter who was a i)arty to the [)reparation of the prospectus or notice, or of the portion thereof containing such untrue statement, but shall not iiulude any person by reason of his acting in a pro- fessional capacity for persons engaged in procuring the formation of the company. (6) "l^xpcrt" includes any person whose profession gives authority to a statement made by him. 3. This Act shall apply to all companies where or by what authority soever incorporated; and, in res[)ect of Provincialcompanics, shall be constru- ed as one with the several Acts of Ontario, incorporating or providing for the incorporation of companies by letters patent or otherwise. St.ltt CC.[ fair doc I or jcoini land lor t land lnoti( Itlie isiiare ion |therel reasoi (2 lirous lebe lus or ^tateii It's or — 45 ry person l)c a scd r it, is nut my notice o signs or ige, prom- ) issues or company, n manner ly liable to ir order for jaid by the gislative As- onal non-dis- which might not to apply of the com- )onds; also or guarantee, corporation annuities on lown, appoinl- ic preparation such untrue ■ting in a pro- nation of the authority to a rthat authority lall be constru- jviding for the 4. (1) Where, after tlic passing of this Act, a prospectus or notice in J;ii;'j[i'.vf;r^^ vites jjcrsons to subscribe or ajjply for shares, del)enture stock, annuities on pru,\?ccur..''' lives, or other securities of a comi)any, every person who is a director of a company at the time of the issue of the prospectus or notice, and every person who, having authori/.t;d such, naming of him, is named in the prospectus or notice as a director of the comi)any or as having agreed to become a director of the compay either immediately or after a i)eriod of time, and every prom- oter of the company, and every person who has autliori/ed the issue of the prospectus or notice, shall be liable to pay to all persons so subscribing or applying on the laith of such prospectus or notice, compensation for the loss or damage they may have sustained by reasc.m of any untrue statement in the prospectus or notice, or in any report or memorandum appearing on the face tiiereof, or by reference incori)orated therein or issued therewith, unless it is proved (a) ^\'ith resi)ect to every sucii untrue statement not purporting to bo made on tlie authority of an expert or of a |)uljlic official djcumeiU or state- ment, that he liad reasonable ground to believe, and uj) to the time of the al- lotment or issue of the shares, debenture stock, annuities on lives, or other iSecurities, as the case may be, did believe that the statement was true; and (/') \\'ith respect to every such untrue statement purporting to be a Istatemcnt by or contained in what purports to be a copy of or extract from a *re[)ort or valuation of an engineer, valuer, accountant, or otiier expert, or I was a correct and fair copy of or extract from the report or valuation. Provided u always that notwithstanding that such untrue statement fairly rej^resented the [statement made by such engineer, valuer, accountant, or other expert, or was -a correct and fair copy of or extract from the report or valuation, such director, person named, promoter, or other person, who authorized the issue of the [ prospectus or notice as aforesaid, shall be liable to pay compensation as afore- said if it be i)roved that he had no reasonable ground to believe that the person making the statement, report or valuation was competent to make it ; and (c) With respect to every such untrue statement purporting to be a i statement made by an official person or contained in what i)urports to be a [copy of or extnut from a public official document, that it was a correct and [fair representation of such statement or coi)y of or extract from such I document, I or unless it is proved that, having consented to liecome a director of the |conii)any, he withdrew his consent before the issue of the prospectus or notice, land that the prospectus or notice was issued without his autlioriiy or consent ; [or that tile i)rospectus w notice was issued without his knowledge or consent, land that on becoming aware of its issue he forthwith gave reasonable public Inotice that it was so issued without his knowledge or consent ; or that after Ithe issue of such prospectus or notice and before allotment or issue of the isliares, debenture stock, annuities on lives or other securities thereunder, lie, |on becoming aware of any untrue statement therein, witiidrew his consent thereto, and caused reasonable public notice of such withdrawal, and of llie reason therefor, to be given. (2) Where any company existing at the passing of this Act, shall be des- s,aie,„c,us i„ Irous of obtaining further capital by subscriptions for shares, bonds, debentures p-^^h'^ius for debenture stock or other securities, and for that purpose shall issue a prospec- cLpitai?"'"'" ;us or notice, no director of such company shall be liable in respect of any Statement therein, unless he shall have authorized the issue of such prusiieu- *jis or notice, or luivc adopted or ratified the same. i I l-'pf'p" ll ' Indemnity where name of pcr^un has been iiiipru- pcrly inserted. Conlribution from coHlirec- lora, etc. -46- 5. Where any such prospectus or notice as aforesaid contains the name of a person as a director of a company, or as having agreed to become a di- rector thereof, and such person has not consented to l)Cconie a director, 01 lias withdrawn his consent l)efore the issue of sudi pros|»ectus or notice, and has not authorized or consented to the issue thereof, the directors of the company, exce])! any without wiiose knowledge or consent the prospectus or notice was issued, and any other person who authorized the issue of such prospectus or notice shall he liable to indemnify the person named as a director of the com- pany, or as having agreed to become a director thereof as aforesaid, against all damages, costs, charges, and expenses to which he may be made lialjle by reason of iiis name having been inserted in the prospectus or notice, or in defending himself against any action or legal proceedings brought against him in respect thereof. 6. livery person who by reason of his being a director, or named as a director or as having agreed to become a dire, tor, or of his having authorized the issue of the prospectus or notice, has become liable to make any payment under the i)rovisions of this Act, shall be entitled to recover contribution, as in cases of contract, from any other i)erson who, if sued separately, would have been liable to make the same payment. QUESTIONS ON THE ONTARIO ACT. (N'oTK. Numbers refer to the sections of the Act.) 2 What is the meaning of "The Letters I'atent?" What is meant by "Supplement- ary Letters i'atent ?" What do you understand by "The Undertaking" of a Company? What is a shareholder ? 3 State the conditions to be comi)lied with by a company incorporated in Great Britain to enable them to do business in Ontario. 4 How many [lersons are re(iuired to obtain incorporation in Ontario ? In what lines of business can companies not obtain ir.corporation under this .\ct ? 5 What must form part of the corporate name of any company incorporated under this .\ct ? 6 \Vhat is the first step to be taken by persons seeking incorporation ? State the six different points of information retpiired to be in the advertisement ? How many times must the advertisement he published ? 7 How soon after the last publication of the advertisement must application be made for Letters I'atent? To whom should the application be sent? What particulars must the petition set forth ? 8 & 9 In what cases may the advertisement be dispensed with ? . , 10 (S: II What f;icts must be established to the satisfaction of the Provincial Secre- tary ? In what way may they be proved ? 12 What must the Lieutenant (lovcrnor insert in the Letters Patent, and what dis- cretion.^.ry powers may he exercise relative to name, notice, objects of incorporation, &c. 13 When Letters Patent are issued, what notice must be given, and where? 14 If Comjiany's name is the same ns some other Company, how may it be changed ? How may such change of name be compelled ? 15 What irregularities will not void the Company's charter after its issue ? 16 What powers are granted to bodies corporate ? xj Who may subdivide the shares of a company ? I Can Ibout -47- i8& 19 How, and under what conditions, may the capital stock be increased?^ 20 Under what conditions may the caiiital stoc k of a c()ini)any l)e decreased ? Is there any change of liability of old shareholders ? 21 i'v- 22 What conditions are necessary to give to effect a by law increasing or de- creasing capital stock? Within what time must supi)leinentary 1 -etters i'atent be petitioned for ? What facts must be proved ? 25 What is Preference Stock ? Is a preference stockholder subject to the same con- ditions as ordinary shareholders ? What vote is necessary to sanction the issue of pref- erence stock ? 26 On what five reasons may the Lieutenant Governor grant sui)plementary Letters Patent. 29 By whom are the affairs of the company managed. 30 In what way are the first or Provisional Directors of a company api)oiiUcd ? 31 Wliat (jualifications must a Director have before and after his election ? 32 & 33 When and where must first regular Directors be elected ? How often after- wards should they i)e elected ? What notice is necessary, and how is it given ? \\'hat .voting powers has a stockholder ? How is the vote taken? How arc vacancies filled ? iHow are the President, Secretary, vVc. elected ? 3.!. If Company fails to elect Directors, what is the result ? ^ 35 May the number of Directors be increased or decreased, and how? ■ 36 What business powers have Directors? 37 On what points may Directors make by-laws ? 38 Explain the company's powers relative to borrowing money on bonds, debentures, [Teal estate, t\;c. 39 How may shareholders call a general meeting? 40 How would you submit a by law as evidence in a court ? 41, 48, 51 I'v: 52 How m.iy the shares of the company be transferred? 42 How should stock be allotted? 43 On what terms may shares be sold ? 44, 46 & 47 How may the price of the stock be collected from the shareholders ? [Can the company sue for it ? Can interest be collected on it ? 45 What amount must be collected on all stock within a year after issue ? 47 How may shares be forfeited ? 49 What will prevent a shareholder from voting ? 50 What special books are neces.saiy in compliance with this Act ? S3 Who may examine books of the comi)a»iy containing records of stock ? 56 What penalty may be recovered from the person refusing to show books ? 55 What is the penalty for making untrue entries, or leaving entries out ? 57 To whom and when must each company repi ' ^ \\'hat particulars are required ibout shareholders ? What particulars must be sumin. ^/ed in the report ? How is such verified ? How many copies should be made, and what is done with them ? /hat is the penalty for neglect ? 59 Must contracts, negotiable paper, &c., of the company, made in the ordinary ^ourse of business, be sealed with the corporate seal to be binding ? Is the officer sign- [ig such document personally liable ? Can they issue bank notes ? 60 Generally speaking, may one company buy another company's stock ? liabilities of shareholders ipaid stock. 63 & 64 Explain fully various kinds fo( u :| T** -48- ' f)5 I low may a trustee or executor vote as .1 sharcliolder ? M> May a dividend he paid out of capital, or in such a way as to impair capital ? W'lio arc liable, and to what extent in such a case ? 67 lv\(c|)t in Loan and 15uilding Companies, how are shareholders and officers re- stricted from borrowing money from the company. M I'or what debts are directors liable, and under what conditions ? Where and lu)\v must claim be made ? 70 How may a charter be forfeited ? 7 1 ^\'hen must charter fees be paid, and who fixes the amount of them ? 72 v\: 7.^ May a company be re-incorporated ? Will this modify its liabilities ? 74) 75) 7^''^' 77 M'ly ^ <:ompany act as trustee, executor, administrator or guardian ? Does it reipiire to give bonds as a private person doer-.? Is its liability the same as a private person ? 78 \Vhat privileges have companies incorporated before March 10, 1882 under this Act, in reference to the extension or limitation of their jjowers? 79 How may a company be wound up ? QUESTIONS ON THE LIMITED LIABILITY ACT OF 1889. 2 What liability do Directors incur by neglecting to put "limited" in the name of the Company in its contracts, iVc. ,? Specify where it is necessary to jnit tlie word " limited '" painted, written, printed i)v engraven. 4 AVhat is the penally for default or neglect ? 5 Are directors or officers liable i)ersonally for such penalty if they permit the neg- lect ur default? 6 What penalty does the director or officer render himself liable to, who uses the name in the seal, notici:s, <\:c. of the company, without the word "limited " ? QUESTIONS ON THE DIRECTORS' LIABILITY ACT OF 1891. 4 AVliat liabilities do Directors incur when they make untrue statements in prospec- tuses? Are they liable for statements of experts, such as engineers, accountants, valuers,&c. If so, when, and when not liable ? To what kind of investments does this Act apply ? 5 How may a director free himself from such liability ? f) If such money were all recovered from one director, could he sue others for their proportion ? — 4') — capital ? ifficcrs rc- ^'hcre and es? ^ruarclian ? ; same as a I under this 9- the name of itien, printed ;rmit the nog- "| who uses the 1891. nts in prospec- its, valuers, &c. Act apply ? others for their JOINT STOCK COMPANY BOOK-KEEPING. It is presumed in this hook, at the outset, that the reader is already familiar with llic principles of Single and Douhle-Kntry Book-Keeping as they apply to business carried on by individuals and ordinary simple partnerships. It is the |)urp()sc in this department of the book to extend this kn(»wledge and make it ajipiy to Joint Stock (onipaniLs. At the present time, and for a few years back, there has been a very marked increase of incorporated companies and a corresponding decrease of jiartnerships, considering the increase of trade. There are many reasons for this increase of cor|)orate concerns, m which we may give the following : ( 1 ) Increased trade demands increased capital, and iVeiiuently more tiian one man (an furnish. If this one man understands well the business he proju'ses to start, he can with little trouble induce others to put capital into his venture. And this leads us to the sec- ond reason. (2) An investor who does not take an active part in the management of the business his money is in, desires, naturally .enough, to relieve himself of additional liability that is imposed on him in partnership, hence he desires to invest in an incor[)orated concern in which he may lose the capital he put into it, but no more, should the concern become bankrupt. (3) An invester naturally desires to make an investment from whicii he can get liis money back should he require it. In the company he can sell his shares without disor ganizing the company. (4) A stock com|)any has usually many more members than a simjile [lartnership. Hence the increase of persons having a proprietary interest increases the influence and itusiness bringing powers t)f the concern. {5) It is very common for a business at present running, to be converted into a stock company, the former proprietor taking shares for his business and assets, and much more capital being added by the new share holders, the business may be pushed and extendeil, where it could not previously on account of the capital i)eing altogether insuthcient tor the undertaking. The Book-Keeping To plan books properly for any concern, whether small or large, individual or partner- ship or corporate, the first thought, the last thought, and the thought all the time when the books are being planned, so far as the accountant is concerned, is to adapt the books to the particular needs of the tmsiness. When books are opened and put into a convenient and proper routine, there is very little difference between Joint Stock book-keeping and that with which you are supposed to be already fainiliar. Tor example : \ov\ pay C'harles Lindsay cash on account $15. The entry must debit C'harles Lindsay, and credit cash, and so on in all the different transactions that you are already accustomed to. Vou wil] find special forms and papers, and a very few special journal entries in regard to the fol. lowing in company work, viz. ; — — 50- (t) Its orRanizntifin. (2) lis management by otlkcrs -usually called a Hoard of Pirertors. (3) 'I'lu' arranKiineiit ol the capital into diual portions, called shares, and books tu suit this condition of capital. ' ' (4) The transkr ol lapital from one shareholder to another. (5) Till' (lis|)osition of its profits as .lii|t, Kfiirrally s|iiakinK. cadi iiartiicr is tlic .".;"'nt of all the titlu-rs. Fvfry onu of them tan sij-n the iiotcs, < lii. liis case it will hej liamcnt is sittinu c it necessary I-" i Insurance ("onv ,anies Letters r:>t' ave been given ins These Acts arcj V. W!ien a coinpany is incorporated by special Act of I'arliamcnt, tiic laws respecting its niananenieni are pra"tically tlie same as those,- in the company formed under the provis- ions of the jijcneral /\ct. These laws and conditions are found in the Joint Stock C"om- l)anies' Clauses Act. Revised Statutes of Canada, Chap. ii8. Revised Statutes of On- tario, 156, i\:c. It is proposed to take as a first example a small company to run a creamery and dairy business incorporated in Ontario under the general Act. The forms being p'actically the same for all companies. A simple example, so far as the forms are concc'rned, will suit our pnipo'^e as well as a more elaliorate one. Suggestions I'OK iMORMAriON OF THOSF. IXTF.RE.STKD IN TIIK l'"ORifATION OF JoiNT SlOCK (JOMl'.VNIES. We sul>join short statements of suggestive points by both the Dominion and Provin- cial ( ioverimients. They are clear-cut. and need no comment. lOINT S'i'OCK COMPANIES, DOMINION OF CANADA. Kxtracts fi'om Chap. ] l!(tli, R. S. C. 18S(), coiitiiining the forms of jnocc-'ingand record prescrilied l)y tlic said Act in reference to the issuing of Letters Patent. Notice to i)e given in the " Canada Gazette" and what it shall contain. "4. The applicantH for such letters patent must give at least one month's previous notice in the Canada Ga-^etle, of tlieir intention to apply for the same, stating therein : (. At any time, not more than one month after the la^it publication of such notice, the applicants may petition the (iuvernoi-deneial, through the Secretary of State of Canada, for the issue of such letters patent. What it shall contain. yl) Such petition must recite the facts .set forth in the notice, and must further state the amount of stock taken by each applicant, and also the amount paid in upon the stock of each ap|)licant, and the maimer in which the same has been paid in, and is held for the Company. .'/ certain amount of stock must l>e taken. (.'!) The aggregate of the stock so taken must be at least the one-half of the total amount of the stock of the Company. — 54 And a certain amount paid up thereon. (4) The aggregate so paid in thereon must, if the Company be not a Loan Company, be at least 10 per cent, thereof ; if the Company be a Loan Company, the aggregate so paid in thereon, must be at least 10 per cent, thereof, and must not be less than one hundred thoueand dollars. Disposal of amount paid up. (Ti) Such aggregate must have be'in paid in to the credit of the Company, or of trustees therefor, and must be standing at such credit in some chartered bank or bunks in Canada, unless the object of the Company is one rei[uiiing tliat it should own real estate, — in which case any part not more than one-half of such aggregate may )>c taken as being paid in, if bona fide invested in real estate suitable to such object, duly held by trustees for tlie Company, an ' ng of the required value over and above all incumbrances thereon. Certain provisions may be inserted in patent. (6) The petition may ask for the embodying in the letters patent of any provision whi''h under this Act, might be made by by-law of the Company incorporated ; and such provision so embodied shall not, unless provision to the contrary be made in the letters patent, be subject to repeal rr alter- ation by by-law. Preliminary conditions to l>e established — Proof of facts asserted. (!. Ucfore the letters patent are issued, the applicants must establish to tlie satisfaction of the Secretary of State, or of such otiier officer as may be charged by the ( lovernor in Council to report thereon, the sLifficiency of their notice and petition, and the truth and sufficiency of the facts therein set forth, and that the proposed name is not the name of any other known incorporated or unincor ated Compvny ; and to that end, the Secretary of State, or sucli otiier otficer, shall take and keep of record any rcijuisite evidence in writing, by solemn declaration, under the Act .tTth Victoria, (1874), cliapter .'ITth, intituled : " An Act for the Suppression of voluntary and Extra-judicial Oaths," or by oath or uttirmatiou. Fees must be paid liefore action taken. X No step shall be taken in any department towards the issue of any letters patent or supple- mentary letters pitent under this Act, until after the amount of all fees therefor shall have been duly paid. Copies of certain notices to be published by the Company in a local paper. 9 & IC. A copy of every notice of issue of letters patent or supplementary letters pivtent which, under tlie provisions of this Act, the Secretaiy of State is rcciuired to insert in the Canada Gazette, shall forthwith, after such insertion, be, by tlie Company to which such notice relates, inserted on four several occasions in at least one newspaper in the county, city or place where the head offices or chief agency is established." The following is the schedule of Fees payable under the 84th section of the said Act : " I . When the proposed Capital Stock of the company is |.")(X>,000 or upwards, the fee to be |20(). 2. When the proposed Capital Stock is ^•ilKt.OOO or upwards and less than S.')<»(),(KK), %\:^, 3. When the proposed Capital Stook is $UK»,000 or upwards and less than $'2(Mt,0(IO, *100. 4. Wlien the proposed Capiui.l Stock is less than $1(M),(HX», ».">(). .'■., When tlie proposed Capiial Stock is $40,0. (MK), SKK). ,t charged on the n which case the payable shall l>e e capital stock is ■ of the Honorable KI.l., ary I'f State. LKTTERS PATKNT. 1, The (^ieutenant-(ri>vern'>r-in Council may, by Letters Patent under the (!reat Seal, grant a Charter to any number of persons, not less than five, who shall petitiim tiierefor, constituting such persons and others who may become siiareholders in the Company thereby created, a body corporate and politic, for any purposes or olijects to which tlio legislative authority of the Legislature of On- tario extends, except the con.structioii and working of Railways and the business of Insurance other than as provided by section 4 of the Ontario Insurance Act. PUBLK^ NOTICK. II. Applicants for Letters Patent must give at least four consecutive weeks' notice in the "Ontario (iazette " of their intention to apply for the same. (a) If, however, the capital of the proposed Company is to be $.S,000 or less, the Lieutenant- Governor may dispense with notice. If given, the notice must state : — 2. The Christian names in full of the applicants, their residences, legal additions or occupations, special mention being made of not less than three of them who are to be the first Directors of the Company. {a) Kach Director must be a shareholder and own stock absolutely in his own rig!ublic interest,) the name of the Province of Ontario, or of some locality therein, must constitute part of (he name of every ('ompany. (/') The word " Limited " must be added to every corporate name. ((■) The name of a Company should indicate its object. (i/) The name of a Conipany nnist not include any wor1 if m IfTl - sfi - ■.. ;i 0. The amount of capital stock and tho number of shares into which the capital is to be divitiod, And the amount of each share. 7. Proof that notice has l)een duly given must be furnished by means of affidavit, setting forth tlie dates of insertion of such notice, with copy titereof, cut from the "Ga/ette," attached thereto. The Petition. IH. At any tims, not being more than one calendar month after the last publication of the no- tice in the " Gazette," the applicants may petition the Lieutenant-Governor-in-Counoil, through the Provincial Secretary, for the issue of Letters Patent. (a) The persons who petition must be the same persons who gave tlie notice, and must be share- holders in the proposed Company. (/') If incorporation is sought under any otiier Act as well, its title should be set forth, as for instance, "The Timber Slide Companies' Act, R. 8. O. Cap. IfiO ;" or "The Street Railway Act, R. S. O. Cap. 171 ;'' or "The Act respecting Companies for Steam and Heating, or for lupplying Elec- tricity for Light, Heat or Power, R. S. O. Cap. I6."i,"' etc. '2. The petition must state the facts required to be set forth in the notice, and must further state the amount of stock taken by each applicant, and also the amount, if any, paid in upon the stock of each applicant. 3 The petition must also state whether the amount is paid in cash or by transfer of property, or how otherwise. (a) If nothing has been paid, state the fact. Payments not actually made in cash, or secured by Trust Deed, or otherwise, cannot be recognized liy the Department. (A) The petition should be signed by eacii of the applicants personally, but if, in any case, it ia signed by attorney, it should be accompanied by a duly authenticated copy of the Power of Attorney, which must be of a specific, and not of a general character. Kach signatnre must be witnessed and verified by an affidavit made by the wituess thereto. (c) Printed forms of petition may be obtained at this Department. (() When ic is .*1(»(».()(M), but is less than $2(K),(K)(> ;-,(, When it is *,')(»,(KK), but is less than *1()(),()0(» " ' 4^, When it is Icph than .*.")(>,(K)0, but more than $3,(KHt " " * 30 When it is $3,(KH» or less ' " 10 When the Charter is for a.i Educational Institution 10 (, ) Remittances in ciish must be made by Registered Letter ; otherwise, they will be at the risk^ of tlie sender. Post Office orders, or "marked " bank cheques, or drafts, should be made payable t«| the order of the Provincial Secretary. Cheques not " marked,'' are liable to be returned. All communications should be addressed to The Honorable The Provincial Secretary Provincial Secretary's Department, Toronto Out Toronto, Novemlwr 1(», 189(), ' ""' — 57 oolacap will be ri' BBue of Le been dul> pwards Iters Pat- paid.'- : . 50 . 40 . 30 . in , . 10 at the risV payable to I Secretary ' By will be i be made returned. Provincia to, Out, Memoranda of Transactions. The following transactions form the basis of the work in the books, &c., that follow. The student will do well to read over carefully, several times, the business done until he has a good general idea (if it. He will ba able to follow it out readily in the various l)ooks into which it is divided. Kel). 15. Notice was given this day in the Ontario (lazette of the intention of J. S. L ,es, L. P. \'oiscn, W. A. McKay, C. A. Madden, H. White, and Edwin Reid, to apply to the Lieutenant (lovernor of Ontario, in Council, for Let- ters I'ateiit, incorporating them as a Joint Stock Company, with powers to manufacture and deal in Creamery Hutter, also Dairy Produce, (S:c., under the cori)orate name of The Springvale Creamery Company, Limited. March 24. The Letters I'atent having been formally applied for, the Stock Hook of the Company was opened, and the following subscriptions to the Capital Stock received, and the stock duly allotted by the I )irectors. 'J'he prospectus provides that the first call of 10 % be payable at time of allotment ; a sec- ond call of 40 % on May ist ; a third call of 25 % on May 26th ; and the remaining 25 % at the call of the Directors. The calls of 10 per cent, paid by all in cash. J. S. Howes Five s hares, $500 Cash $50 John McMillan M 500 „ 50 W. A. McKay II 500 " 50 C. A. Madden Three 300 „ 30 H. White tf 300 u 30 E. Reid H 300 " 30 L. P. Voison n 300 „ 30 1'. C. McDowall .. 300 " 30 Total $3000 'lota! $300 The following persons were elected officers ; H. White, President ; V.. Reid, Vice President ; C. A. Madden, Secy. -Treasurer. Directors — J. S. Howes, L. P. Voison, and W. A. McKay. Opened an account at the Merchants' Bank, and deposited cash $300. The offer of S. J. Somerville of one acre of land for Factory site, was accepted. The deed was duly executed, and the price, $200, was paid by cheque on the Merchants' Bank. Paid account of W. J. Gray, solicitor, Charter fees, $30. Services, $10, by checiue. Win. McKenzie's offer to build a factory 36x60, two storys high with stone basement, as per specifications and plans prepared by him, was accepted payable $500 when work is completed, and $400 in three months. The offer of Jno. J. Gibson of Wroxeter, to furnish and fit up the factory with engine, boiler, shafting and machinery, water pipes, apparatus and appli- ances — a complete outfit for the manufacture of butter, was accepted, pay- able $600 on the cumplutiun uf the w(.>rk, and $1000 in six months. i |: ill! p * : 1 1 1 -5^- May I. ro. 20. 26. June July so- II 30. 25- 28. Received the following sums from shareliolders, being second call on stock : J. S. Howes, $200 ; J. McMillan, $200 ; W. A. McKay, $200 ; C. A. Mad- den, $120; H. White, $120; E. Reid, $120; L. V. Voison, $120; F. McUowall, $120. Deposited in Bank $1200. The following bills were passed by the Directors, initialed, and ordered to be paid by cheques on Merchants' Bank : - Books an-' stationery, J. Laugheed, $37.50 Printing, J. i^ Hanuiiond, 41.40 Salary of Secretary, C. A. Madden, 22.20 Wm. McKenzie having completed his' contract of building satisfactorily, was paid $500 by che(iuc, and a note at three monliis for balance, $400. Engaged H. Agnew as butter maker for the season, at $40 per month, pay- able monthly, to begin June i. Agreed with W. J. Patterson to gather the cream from the patrons at the rate of }4c. per inch, payable monthly. Entered into a contract wi'.h I'red Barber for the sale to him of all our but- termilk, at I i/l cents per gallon, to be i)aid monthly. John J. (libson having completed his contract of machinery and appliances satisfactorily, was paid by cheiiue $600, and note at six months for balance. It was agreed to pay the Secretary, C. A. Madden, $50 per month salary while the factory was i 1 oneration. He to keep the books and attend to all bus- iness of the Company. Bought of M. & J. Wallace, Toronto, as per invoice, supplies of dairy salt, tubs, I've, on account, $130. Bought of James Park & Sons, St. Lawrence Market, Toronto, 60000 parch- ment wrappers, per invoice, $113. Received in cash the following sums, being third call on subscribed stock : — J. S. Howes, $125 ; J. McMilK , $125 ; W. A. McKay, $125 ; C. A. Mad- den, $75 ; H. White, $75 ; E. Reid, $75 ; L. P. Voison, $75 ; V. C. Mc- Dowall, $75. Deposited in Bank $700. Paid freight and cartage on invoices of M. iV J. Wallace and James Park & Son in cash $3.50. Withdrew from Bank $608.75. Paid to patrons, as per Cream Register, for month of June, $549.41. Also paid H. Agnew's wages, $40. W. J. Patterson, for drawing cream, $19.34. Received from F. Barber, his cheque for buttermilk for the month of June, 2900 gals, at i^ cents per gallon, $50.75. Sold James Park & Son, St. Lawrence Market, Toronto, looo lbs. tub butter, at 20 cents, $400. 1868 lbs. butter, in pound prints, at 25 cents, $467. Drew on Park it Son at sight for balance of account, and had same discount- ed at Bank. Face of draft $754. Discount $1. Proceeds credited to Com- pany's account. Paid James Morton for 20 cords of wood, at $2.50 per cord, by order of the Directors. s M. Ill ill "55- n stock ; A. Mad- ;i2o; V. red to be July ,^0. " 3'- Aug. ■"■;-, " >3- torily, was - ! 3' ,00. nonth, pay- % „ II al the rate all our but- ^^^K I 10 d appliances for balance, salary while id to oil bus- I^B 30 ^^B II of dairy salt, I^^H M 60000 parch- o^H I bcd stock :— ; ; C. A. Mad- 5'; f.CMc- 5 20 James Park & P549-4'' Also :rcani, $i9-34- Lonth of June, libs, tub butter, Icents, $467- j same discount- Ircditcd to Corn- by or'let of the :" 3i- III II III II Withdrew from Bank $765. Received from V. Harl)cr cash for huttermilk for July, $65.63. Paid to patrons, as per rt-gisttr for July, $700. 11. .\gnew as wages, $40. W. J. Patterson for drawing cream, $25. Sold James Park iV' Son 3000 lbs. butter in tubs, at 20 cents. 2000 lbs. in pound jirints, at 24 centi. Received checjue from Park & Son, $1080, for invoice of butter shipped them Aug. 2. Deposited in Rank $1 145.63. Paid our note in favor of \V. McKenzie, due today, by cheque on Bank, $400. Withdrew from lUuik $692. Sold Park & Son, Toronto, 2700 lbs. butter in tubs, at 21 cents. 1800 lbs. butter, in pound prints, at 25 cents. Paid patrons, as per register for .August, $630. H. Agnew's wages, $40. W. J. Patterson for drawing cream, $25. Received from K. Barber his chciiue for buttermilk for August, $59.07. Drew on Park & Son, at sight, draft for l.>alance, and had same discounted at Bank. Face of draft $1017. Discount !j ;. 25. Proceeds placed to the Company's credit. E. ReiJ has transferred his stock to Wm. Messenger. Three shares, Nos. 22, ^ 23, 24, as per transfer No. i, sanctioned by the Directors. See minute book, folio WitJidrew from Bank $656.25. Paid patrons, $595, as per register, for Sept. Paid II. Agnew's wages, $40. W. J. Patterson for drawing cream, $21.25. W. .\. McKay was elected Vice President in place of H. Reid, resigned. Received from V. Barber his cheque for buttermilk for September, $51.8??. Sold to Jas. Park & Son, Toronto, 4200 lbs. of butter, in pound prints, at 26 cents, $1092. Drew on Jas. Park & Son, at sight, for amount of invoice of 5th inst., and had draft discounted at bank. Face of draft $1092. Discount $1.25. Pro- ceeds placed to Conii)a;iy's credit. Bought salt, tubs, and other sui)plies, from M. iS: J. Wallace. $50, as per in- voice. Withdrew from Bank $620. Remitted to M. & J. Wallace checjue on Bank, $130, for invoice of May 20. Paid patrons, as per register for October, $560. Also paid H. Agnew wages, $40, W. J. Patterson for drawing cream, $20. Paid C. A. Madden by checiue on Bank, four months salary, at $50 per month, $200. Paid freight and cartage on invoice of supi)lies from M. & J. Wallace, $1.90. 'i"he fourth call on subscribed capital of 25 % was made, payable on Decem- ber I, 1891. Received Barber's cheque for buttermilk, 3150 gals., at i^ cents per gal., for the month of October. J.1 i v. »i - l\ * i^ ii I — "pTif"'!' !: . ( — 60 — Nov. 2. Deposited K. IJarljcr's checjucs for $51.88, and in Bank $55.1.1. i< 5. Sold I'ark & Son, 'J'oronlo, 3000 lbs. of butter, in poinid prints, at 24 cents per pound, $720. It II Soiil las. McF,auchlan iV Sons, Owen Sound, for cash, 1000 lbs. butter, for cooVing, at 8 cents, $80. II 8. Deposited in Hank, cash $80. II 11 Drew on Park i\: .Son, at sight, the amount of shipment of the 5th inst., and , received credit at IJank for same, less discount. Face of draft $720. Dis- count $1. 11 23. Paid our note in f;\vor of J. (libson, dated May 20, due to-day, $1000, by checjue. II 25. Shipped to Park iV Son, 2500 lbs. of butler, in |H>und prints, at 30 cts., $750. II 26. Received iJarber's checpie for buttermilk for November, $38.22. II II Remitted to M. I'v: J. Wallace, Toronto, checpie to balance, $50. II II Withdrew from Bank $475. II II Paid patrons, as per register, for November, $400. H. Agncw, wages, $40. W. J. Patterson for drawing cream, $20. II is- $1000, by lis., $75°- wir^cs, $40- Company in cctors' fees : lowes, $;:o ; ;lie Secretary larcd on sub- [i, as follows ; ; C. A. Mad- $75 ; I*- ^^'■■ heir slock, as cKay, $125 ■• I'. Voison, 1 cash, as pev ciation, $i500' be noticed that iitcd with Clash en up a " Stoi k Paid ui) Capital Accnunt Dr. $3000 : 'I'o J. S. Howes, $500 ; W. A. McKay, $500 ; Jno. McMillan, $500 ; C. A. Madden, $.?oo ; H. White, $300 ; I,. P. N'oison, $300 ; F. McDowall, $300 : W. Messenger, $300. 'I'his kind of an entry might iiave l)ecn made for the several amounts, as it was paid in in regular insialir.ents. It will he noticed that the above system of entry will en able the book-keeper to have both ledgers by double entry, and take a separate trial balance for each. We have already recognized the |)rinciple that all entries in the ledger should represent entries in Journal, Cash JJook, Sales Book, or some other principal book. In compliance with this, the closing entries of the ledger should be in the journal. The following entry will close the accounts, showing loss in the ledger. Loss and Cain Dr. $640.60. 'i'o expense account $1 24.40 ; salary and directors fee.s, $422.20 ; Plant account $100. The expense account includes in this case the expenses of incor[)oration, printing, ad- vertising, books and stationery, as well as the commission for the collection of drafts on lames Park iV Son. or ii\ other words, the cost of remitting the money from Toronto. The Secretary's salary and allowances to directors, make up the .second item, and the sum of $100 is written off the cost of the plant and tools for the ordinary wear and tear of the season. .\t this rate the plant would be supposed to last, with ordinary repairs, which would be charged to expense or some such account, for sixteen years. In other words, the "life" of the plant represented in this account would be sixteen years. 'i'hc following entry will close the profit from the manufacture of butter into Loss and Gain. Putter account Dr., $1773.28. 'i'o Loss and Cain, $1773.28. It will be noticed that this account includes on the Dr. side the entire cost of the butter. (1) 'I'he milk from which it was manufactured. (2) 'i'he cost of drawing it. (3) 'i'he cost of all other materials used in its manufacture, such as wood for heat, tubs, wrap])ers, salt. (4) 'i'he wages of the butter maker. 'i'his is the entire cost of manufacture, 'i'he Secretary's salary, Directors' fees, ike, do not belong to the cost of production, 'i'he depreciation of the plant might be very prop- erly included here by an entry of plant. Butter account Dr., $100. 'I'o plant account, $100. Some companies would wish to have everything belonging to the cost of manufacture kept in one account as it is done in this example, while others would wish a separate ac- count kept with every one of the four items of cost enumerated al)ove. The accountant can readily meet the views of his Board of Directors. In case of keeping the diflferent classes of " cost " in separate accounts they could very properly be closed into butter ac- count, and butter account afterwards clcscd into loss and gain, showing the same result ill either case. On the Cr. side of butter account are found — (i) All sales of butter of all kinds and ([ualities. (2) Sales of buttermilk. — ■pflf* 1»W" 62 — These mi^lit have l)een Ivcpt in two separate acroiints and closed togetlicr afterwards. 'I'hc followir)!,' entry is inten(leros/>ir/us, which usually contains the following particulars. (1 ) 'I'hc name of the jiroposed company, which should be as short as possible con- sistent with the nature of the undi'riaking, and should contain the word " limited." [2) 'I'hc amount of the Ca[)ital Stock, the numl)er of shares into which it is divided, and the value of the shares. (^) The ]'ro\isional Directors, Solicitor, Hanker, iVc. (4) I'he nature of the undertaking of the ct)mpany, that is, a clear explanation of the business the company proposes to carry on. (5) 'I'he advantages, profits, emoluments, and divide:ids, to be gained by shareholders. (6) The conditions on which the stock is sold, including terms of payment of same. (7) The names of persons to whom application can be made for shares. noticl inserl iDJniil viiicij that to th\ panic crwards. \ccd llie :, $3oo- reated in incc, and 'Reserve jposed l)y crvc I'und $476.68. Stock Dr., r resources lants Hank, ccount" in- ext season's .labilities to not think of in accounts. Mitries when et a number usually ac- a prospectus, le con- ited." it is divided, Illation of the shareholders, nent of same. -«3- It is of special importance that the statenuiits in such prospectus be true, and not in any way misleading, and recent legislation in Ontario makes Directors and officers per sonally liable for any lo-,s o c isioncd to investors by sucli misleading statements issued in ans' i)rosp.'fUis, unless these statements are tlv)se of rejjort, or v.ihi.uion !);.■ some en- gineer, \aluer, account, int nr oilar expert, that is l)flie\ed to be c()iiipi.'k'nt and liniicst !))■ such Directors or dt'ticcrs. Sec Directors Liability Act. 5^ N'idoria, ('liap. ,v> f"r Oitario. PROSPECTUS Of the Springvale Creamery Company, Limited, of Owen Sound, Ont To be Incorporated under the provisions of the Ontario Joint Stock Companies Letters i'atent .\ct. .\utiiorized capital $5000, cliNidcd into 50 shares of .f roo each. I'UOVI.^IONAI, OIIICI.K-^, 11. White, Pn-iiihiit : V.. Reid, I'ice Prc^iiiint : ('. A. Madden, Siry. T/ctisiiirr. Dit:c/(>rs J. S. llowes, L. 1'. Ndisjn, and W. .\. McKay. W. |. Ciiay, Solicitor. It is proposed to ini'orporate the Springxale Creamery Cmnpany, Limiteil, for the piirj) )ie of m mufa'-turing ,i!k1 dealing in cremury biiiter and other d.iiry produce. 'I'he hrg.'ly incre.isjd ileai.md for a re illy go nl article in this line in the cities ami towns ; the increased facilities for t!ie nnnufacture an I rapid handling an J transportation of this ar- ticle at O.veii So'.ind, and the excellent firming country in this \icinity, aff<)r(.l an ojjpor- tunity tint cm be mule [irofitihle, not only to the shareholders of this Company, but to its patrons who supply the cream to it. It is proposed to erect a Iniilding and fil it out with the latest and most appro\ed ma- chinery at a cost of ab:)al $250.-1, with as little delay as possible, so as tn he read\- for the approaching season. U is ])ro|)osed fo begin operations as soon as thiit\- shares ha\e been subscribed for, and a call of 10 per cent, paid there. m -the remaining ip jjer cent, to he [layable as fol- lows : 40 per cent, on ALiy ist; 25 percent, on M ly 2U\\\, an I the balance of 25 [)er cent, on call of the Directors. -Xjjplications for shares may he addressed to the Secretary of the Company at Owen Sound, ( )nt. H. White, Prov. J'/ru'Jriif. C. A. Madden, Pror. Stoclaiv. Statutory Notice or Advertisement. Wheii five or more iiersons have agreed -to become shareholders, they give public notice of their intention to apply for Letters I'atent or Sjiecial .Act of Incorporation, by inserting the Statutory .Advertisement, (see form on page 23,) in ih^: J /a?i sard, '\{ i\ Do- minion Charter is desired, or the advertisement form on page 64 in the Gazette, if a Pro- vincial Charter is wanted, for four weeks previous to making application for Charter, so that interested parties may notify the Secretary of State of any ohjictions thev mav have to the granting of the Charter. I'his notice may be dispensed with in Ontario bv com- panies whose capital does not exceed .$3000. > ii ■ 1: { Form of Notice for Publication in "Gazette." Pulilic r.(»tii c is liL'iihy ^;i\cii that within oiu' iiKHitli afur the last piililication hereof In tiic 0'ons who has signed the petition. We subjoin a form of applicatii loim of oall erifying the st.itements. \c. Form of Application for Inar er. To His HiiNHK. Till I b'NdU sp.i.i, Sik .\i,i:x\Nnr.R CAMer.Kt.i,, K.C..M.C.., Ivrc. l.iciitcihTit (Jiircnior of the Province of Ontario-in-Couiic. The ]>etilion of John Samuel Howes, gentleman; Lewis I'eter ^'oison, farmer; William .Mexander McKay, merchant; Charles ;\ugustus Madden, accountant; Harry NNhitc, manufacturer ; and Edwin Reid, fiirmer ; all of the Town of Owen Sound, in the County of Crey, and Province of Ontario, humbly sheweth : — -65- 1. That ymir pclitioiicrs arc ik^^iroiis of olilaiiiiiii; by I.ctlcrs I'atcnt iirulcr the (Iri'al Seal, a CliarlLT, unili-r the |l^)\i^i(lns ot' tho Ki'visi'il St.iliUcs of Ontaiin. CliapluT i57,cntitlal " I'hf ( )ntariii Joint Stork C!om|i.iiiii.s' I, otters Patent Ad." con^titutirij^ your petitioners, and such others as miy l)e. That the amount of the Capit.d Stock of the said ('oiii|iany is to be l'i\e Thou- sand Dollars. 7. That the said stock is to be diviiled into 50 shares olOne llumhcd I )ollars each. cS. That the said Harry White, Ivlwin Keid, ( 'harles .\u;;u>tus M.uhkn, lolin Sam- uel Howes, Lewis Peter N'oison, and Willi. im .Mex.inder McKiy aie to l)e tlie fust Di- rectors of the said t'ompan)'. 9. That by subscribinj^ therefor in the ('ouip.un's '^•o.k-book, wnn I'eliiioners I have taken the amounts of stock set opjiosite to their respei li\e iianies, as follows :■ - Petitioners. Aniouiit sul.aciilK.l f..i . •^"""'i',''',|',[.,'^.;,';^'' '"''' ir.,,w [uM. John Samuel Howes, Lewis Peter \"oison, \\'illiam Alexander McKay, Charles Augustus Madden, Harry White, I'.dwin Reid, .$500. ,500. 500. 300. 300. 300. 1 $50- Cash. 30. 50' 30- 3°- 30- ^'oln• Petitioners therefore pra)' that your Honor m.i) be pleaded bv Litters r.itent Inder the Oreat Seal, to grant a Charter to sour Petitioners, constitutiiiu voiir Petitioners lid such others as may become share'i.dders in the Company therel)v created, a body Drporate and politic for the [lurposes md objects aforesaid. And your Petitioners, as in duty bound, will ever pra}'. H. ^L\cKl•;Ns^:^', lliithss Dated at Owen Sound this isth day of March, iSyi, John S. Howr.s. !-. P. VOISON. W. A. McK.w. C. A. Ma|)I)1:.N. ILW'iim;. E. Ri:iD. ii! c,c, Form of Affidavit as to Business, &c. Province of Ontario. ] In the matter of tlie herein aiiphcation of jolm Samuel County of ( Irey. Howes r.nd others for Incor[)oration l)v t!ie issue of Letters TO wrr : j I'atent, as the Sprin.nvaie Creameiy Conii)any, limited. 1, Harry Wliite, of tiie I'own of (Jwen Sound, in the County of drey, Esciuirc, make oath and say : - 1. 'i'hat I am one of tlie a[)plirants lierein. 2. Tiiat I have a knowledge of tlie matter, and tliat the allegations in the within Petition contained are, to tiie best of my knowl.;dge and belief, true in substance and in fact. 3. That the proposed corjiorate name of tiie said Company is not the name of any other known Comi)any incorporated or iinincor[)orated, or liable to Ije unfairly confound- ed therewith, or otherwise on [uiliHc grounds objectionable. 4. That notice of the intention of ilie ap[)hcnnts herein to ajijjiy for tlie grant of Letters Patent as aforesaid, was, for four consecutive weeks, duly given in the issues of the Ontario Guzifte, luiiilished on the I'jth and 33rd of February, and the 2nd and ijth of March, iSiji. 5. That the c'.ipiiing from the >aid Ontario (iazcttr, attached to tiiis my affidavit, and now shown to me m irked " .\." is a true ami correct coj-y of the said notice given as aforesaid. Sworn before me at the Town of Owen Sound, in the \ 1 1 ,,,,,,• w,,,-if County ot drey, this j (ih d ly ol March, A. D. iSi;i. I j.wii.s Cot iiKANi;, J. P. for the County of C.rey. Form of Affidavit Proving Signatures to Petition. Affidavit as to siL^natui'es to petition for Ciiarter in reference to the petition of Jolin Samuel Howes and otiiers for incorporation, under the Joint Stock Companies Act, as the Sjiringvale Creamery Company, Limited. Province of Ontario. County of ( ney. TO \vi r : I 1. Herman Mackensen, of the Town of Owen Sound, in ■ the County of Orey, and i'rovince of Ontario, accountant, j make oath and say : — 1. 'I'hat I was personally present and did see the petition hereto annexed and marked ■' .\,'' signed by John Samuel Howes. Lewis Peter N'oison, \\'illiani Alexander McKay, Charles Augustus .Madden. Harry White, and Kdwin Reid. 2. 'J'hat the signatures of the ^aid [larties is in their proper handwriting. ,5. That i know the said parties. 4. That the name Herm.m Mackciisen, set and suliscribed as witness to the said petition, is in the i)ro[)er handwriting of me, this tleponent. Sworn before me at Owen Sound, m the County of 1 j_j M \cKrNsr\ Uiey, this 24lh day of Marcii, icSyi. | (Jkuroe PuicK, J. P. for the County of Grey. 67- 'Hie following; foriii of affidavit is a proper one ft)r verifying the signatures to the Stock 'iook. If tliere were ten or twenty witnesses, there sliould be ten or twenty affidavits one for eacii witness. These affi-iavits are reipiired for two [)uriK)ses. 1. The Provincial Secretary recpiires that such affidavits he filed witii him at tlie time of making up apjilication for Letters Patent to prove the /'c/Vf^y/^A'^ of the Slock Book that is submitteil to him. 2. In the more carefully managed Conijianics the officers require all signatures to the Stock liook to be verified by oath of witness. In case of signatures of Coriiorators it is well to have affukn its ir.ade out in dupli- cate The one copy for the Provincial Secretary, the other for the lleau '. )lfice. Form of Affidavit Verifying Signatures to Stock Book. In re signatures to tiie Stock IJook tif the Siirii\L;\ale Cre.unery Coiiniany, I.imitetl. Province of Ontario, j I, Herman Mackeiiseii of the Town of Owen Sound, (Jounty of (ire\, County of Orey, and Province of Ontario, accountant, make TO wir : loath ar.d say : — 1. 'Hiat I was |)ersonally present and saw John Samuel Howes. John McMiilnn, William Alexander McKay, Charles .Augustus Madden. Harry While, I'.dwin Reid, Lewis I'eter \'oison, and I'Vederick C'harles .\lcl)(jwall, duly sign and jilace their respecti\e seals on the Stock Book of the Springvale Creamery Company, Limiteil. 2. That I know the said parties. ,V That the signatures of the said parlies are in their pn)[)er liaiKlwriting. 4. Tint the signature, 1 L Mackensen, set and subscribjil j ; a wiuiess to eacli of \\\z said signatures is m the jiroper handwriting of me this tleponer.i. Sworn before me at Owen Sound, in the Count) of | ., m , f, , y. . Orey, this 24th day of March. .\. 1). 1891. ( ]). MoKUisox, a Commissioner for taking allidasils in II. C. [. 'I'he Slock Book sent with the application for l.etieis Patent is not retained by the Provincial Se( retary it is returned to the (!om])aiiy. A cerlilitd copy of the Slock liook must be filed with the Pro\incial Secretary veril'ied bv al'lida\il. The following is a form. Affidavit Verifying a Copy of the Stock Book. In reference to the ])etitioii of John S.unuel Howes and olher.s for Incorporaliun un- der the Joint Stock (Companies Letters l',(tent Act, as the S[)ringvale Creamery Company ].imited. Province of Ontario, 'j I, Josiah Tnllon, of the Town of Owen Sound, in the County of Crey, '('ounty of (Irey. .iccouniant. make oatii and say: That the 'JO wi r : j paiier writing hereto annexed and marked as exhibit '• A ' to I this affidavit, has been carefull; tom|)ared by me with the original Slock iiook of the Springvale Creamery Com[)any, Limited, and that I find the same to be a true copy of the said Stock Book. Sworn before me at Owen Sound, in the County of 1 -, .,, C.rey, this 24th day of March, A. I). .s.,i. \ ■'• '"'tox. W. P. Tki.ioud, a Commissioner tor taking affidavits in \\.('. [. This form of , affidavit is used to verify the copy of the Stock P)Ook that is fvled in ilic office of the Provincial Secretary for the Province of Ontario at the time when the Stuck. Book is sent in, accompanyiiijj tiie application for a charter. \ \ t o *1 •e o o s t O O s- s* ■g ^r-r^x n ^.'f^ U P :^ ^^ :i > c o ite. d. 'oison. IcDowal ssenger. V. 3 ,5 r ri r' 3 ui 1' ' 7; X X X X X X XXX §. ' CA C/2 CA! O) C/3 C/3 C/2 CA) C/3 rB CD O O fT> o 1^ O ft ►o -o -c *o 'n TJ -c -a X3 r'" r* r* r^ r^ J-^ i-t r.^ r* Oj M C^ Oj C/J Oj Oj oj oj p p p p p p p p p a p ' ••4 l-« hH M •-• •H 1-4 HH i_i '^ 00 CO 00 cc &= oc 00 OO CC vo \0 vO O -.O ^ ^ O vC o o o o o ^^ coo i ** -^ ** ^ ^ •< < < < *^ (Tj H) ft) fT) (Ti n rt c a 3 3 3 3 3 3 3 3 7^ -W>-W»-%^-W»-Vf-t«--yr-fc(* > ' oa oj Oj oj ;^ Oj 01 Ol Ol 3 O O O o 000 ' p p p p p o 000 c 3 C/1 B" p •1 1 e r 1 O 2 n f6 Oq O CA oq P 3 P, ^ c/1 '^ n &3 nl 3 p 3 g 3" (/J g >— I ^ c 3 ^ M 7y 3' a. e *-* n 0. ft H 3- ^ -<^ oq r. 3 rX ?r "c Cu c 3" /h 3 3 ft n n §■ p 3 "1 r* n B 1 P p 3 1- c a G p 3 n * 3 r. 3 c 3 n 3 1-^ 3- 3 f!) p 3 P 3 0^ C -v. c 3* > n p c c •-t r, -I c P P -1 S 3- -I 3- --I p c 1^ 3 := r; 3 S" ^3 tl^ •-! ^ < y x M (T) crq 3 p ^_^ or V^ /O c 3 P ir- >< p 3 a. oq ^ 9> r^ a '< y^ 5 o o <^ c ^ ^ '-^ n s ^ 2, CL cr ft J 3 !> 3 3. cr 3 c ,^ C r. •^ ^ "T* X" rf o 3 3- S.' » O '♦ 3 p ^ •n f6 2 ft 3* -» HI* -69- ^ The Stock Book. ^ <^i 3 'I'liu first book of importance in any Comi)any, is tlic Stock i!ook, sometimes called Ithc "Stock Subscription Hook."' It is the basis of the Company's organization. It binds leach individual shareholder — (i) To pay up his stock as it is called for by the officers. (2) To obey all rules and by-laws of the Company, either now in existence or to be Itcrwards made. Tiie signature to this book creates a liability to pay as mucli as any contract under seal. It creates a debt on the part of the subscriber that may be sued and collected in my court having jurisdii'tion at tlie place of the head office competent to deal with the miount. 'I'he signatures to the Stock liook may be made either by the person desiring to be- bome a shareholder or by his representative duly (jualificd by Power of Attorney i)r()perly dulhcnticated. Each signature on the Stock l)Ook should be under seal and witnessed. Tht;re is a form for Stock jiook on page ^)8. It should be in permanent form In a book, so that additional names may be signed in case of more stock being issued, or pome already held being transferred. Many companies at their inception simply have a Stock Book on a loose sheet of kai)er that may be very easily lost or mislaid. Suih slip-shod processes cannot be rccom- jnended. They should be discouraged as much as jiossible. Signature by Attorney. In case the intending shareholder cannot attend where the Stock Hook is, he may ppoint any other person his attorney to sign for him. It is not necessary that the |)erson appointed be a lawyer or any other otticial of that kind. A general Power of Attorney ill not do for a case of this kind ; it must be a dire( t, sjjecific power for this purpose ily, and should be fyled in the head office of the cr)nip.uiy. \s all the signatures are ide in the ordinary way in the foregoing form of Stock Hook, we simply fill in fictitious imes in the subjoined form. foi III 0/ Poirer of Attonieij to subscribe for Stoch : Know Ai.i. Mi-..\ iiv Thi.sk Puksknts that I. Oliver Twist, of the City of (iuelph. County of Wellington, and Province of Ontario, gentltman, do nominate, constitute and appoint David CoitperfieUl, of the City of Ottawa, in the said Province of Ontario, manufacturer, my true and lawful attorney for me, in my name, and on my behalf, to subscribe for five shares of One Hundred Dollars each, in the capital stock of the Springvale Creamer) Com|iany, Limited, and to do all other acts necessary for the projjer carrying out of the same, and I hereby ratify and confirm all the acts o( iii\' attorney hereby api)ointed in refer- ence to the same. In witness whc^eof I have set my hand and seal this 30th day of March, 1891. Ol.lVKR 'IwisT. (I.. S.) 1 1 'i if less, NlCHOI,.\S NiCKt.F.IiV. It is not an uncommon thing for the management of a well conducted company to Juire the signature to the Power of Attorney verified by atitidavit of the witness. The iowintj f"""'" will be found suitable )'; — 70 — Form of Affidavit Verifyhifj the Signature of a Pnirer of Attorney : In the matter of the '.vithin I'ower of Attorney given by Oliver Twist to David Copperficld for the purpose of signing tiie Stock Book of tlie Springvale Creamery Company, Limited. ; Province of Ontario, "j I, Nicholas Nickleby, of the City of Cuelph, in County of Wellington. . the County of Wellington, and Province of Ontario, TO WIT : j gentleman, make oatli and say : - (i) That I was personally present and did see the said Power of Attorney hereto annexed and marked "A," duly signed, sealed and executed by 01iv(rr Twist. (2) 'I'hat Power of Attorney was executed at the City of Cuelph. (3) That I know the said jiarty. (4) That I am the sul),scril)ing witness to the said Power of Attorney, and the signature, Nichokis Nickelby, is in the proper hand- writing of me, this deponent. Sworn before me at the City of Cuelph, in the (,'ounly ^ of Wellington, and I'rovince of Ontario, tliis 30th Nicholas Nicki.ehv. day of March,' A. 1). 1 89 1. j I). R. DoHiK, a Commissioner for taking affidavits in H. C. J. The follotviiu/ in the Form for Signature bij Poicer of Attorney : Oliver Twist, by his attorney I )avid Copperficld. Instalment List. When a call is made it is convenient to have; a list of the shareholders of the Com- pany, with the several amounts due from them to the Com])any, set forth. This saves time of hunting up every account in the ledger. Tiiough not an absolute necessity, it is a convenience. Instalment List of call No. 2, Springvale Creamery Company. Limited- Made by the Board of Directors and payable on May 1st 1891. Ledger folio. Name. Post Office. No. of shires. Instalment. Interest Amount rec'd. Date when received. I John S. Howes. Owen Sound 5 $125.00 $125.00 May I I John McMillan. II 5 I 25.00 125.00 ti I W. A. McKay. It 5 125.00 125.00 ij 2 C. A. ^radden. II 3 75-00 7500 It 2 H. AVhite. II 3 75.00 75.00 II 2 E. Reid. II 3 75.00 75-00 11 3 L. P. Voison. II 3 75-0O 75.00 M 3 F. C. McDowall. It 3 75.00 75.00 II In this simple company the value of this list is not so ajiparent as. in a company where there are perhaj)s hundreds of shareholders, and calls coming ciue at different times, and payments being made at various times, some at the due dale and some in default for long uiouj^h after, on which interest is collectible by statute. — 7t u rt J= ■♦-' -) c <«< o t: ^ o 5/J »-— rj JS u « r: u ' = rt X r/l C O U p n ^ H c5 u u o -a o o u ^ *-• u 03 o ■v^ *-* c o rt ♦■-^ *-■ p* c: o O > O „ B tfj '■J p' ^ c^ w C: C/2 '-J "T^ ^ C o 3 c> B^ 1- n D. n x. 3 u -d o r^ rt £ X <■,( o -1-' £ CJ . t/j u o P o Si: rt u p ■r c v; o C c o O ^ &. :h ■- '-3 rt >^ rt o d CA U r" O O M O V3 Vi « CJ V CO ~S V ::= ^ ^ ? . ■*" >r oc ? ~t «t t- s- •*^ . u ■1 ^ ^ o u hi i?.'^ Q« Q ■^ "^ < - &fc S ^ ? >: s -3 >C 50 ^ - ^. C o •^ o -^H S s :! \ : .^' : s V mv i 72 — •iz ^ ^ « tJ -^ 1) 4; T3 00 ■"I o o ; c; ■£ ^ ji, !» o ^ .0 C ^ o o 2 ^ ^ U o j= ^ c ^ to •^.E t U w 3 O -i: -O -73 ii; ^ a « TJ TJ fli , ^ n 4-1 a "5 - - t C/5 5 *. -o ■o o ■i/ o o 13 I '^ 3 '« 3 ^, — "•35 .C/} = ;j Keq *-J ^^ t-< o tx 1 ^ IT. 't- ft I 1^ C c/2 ji « E ^ o yj M >,^ k « 5/3 .t "1 -5 ^ 2 -a £<} bO 00 -■ K -»-r ■»-»-»-Ti J i^ S5 ,i P<5 Qllz «: bo i:f! — 73 — Share Register. I'his hook is intended to shosv the history of every share taken up in the capital stock of the company ; the name of its first owner : and, by a system of reference to the Trans- ftT r>ook, the name of each subsequent owner is readily obtainable. In the first column is the share number, the shares being numbered from \o. i upwards, in this case for the thirty shares issued. When the other shares are allotted they will be entered up. Some company otiticials numlier all the shares up in this book at the beginning and simply write the names of the purchasers opposite the sliare number when they are issued. The numbers on the stock certificate issued to the shareholder should contain the numbers of tlie siiares he holds, and should agree with this book. The names and Post Otlrtce columns need no comment. The column headed "Num- l)2r of Transfer" refers to the transfer book. .After a share has been resold, the transfer of it is entered u|) in the transfer book, and the transfer number put in this column. Hy referring to the last transfer number, anil turning to the entry in the transfer book you can find out the owner of any particular share, no matter how many times it has been sold. This book belongs distinctively to Joint Stock Company work. Share Register of Springvale Creamery Company, Limited. RE.MARKS. Sh-ire .No. NAME. I'ost Office. 1 1 Transfer No. I J. S. Howes Owen Sound 2 i( " 3 ir II 4 5 6 It Jno. McMillan II II II \ II II II M 9 10 n II H n 11 W. A. McKay II 12 M II 13 M II M II II ^5 i6 ri C. A. Madden II II 17 iS H. White II II II 30 t| tl 21 22 1: . Rcid 11 II I. 23 -'4 -5 26 ft I,. V. Voison M II It !• II I. .. 2S Y. McDowall II n -9 „ II 30 M It 31 33 (NoTE-This and following i shares not taken.) ■;i !^ ■'M n. j: •■■I i li t -) '^ 11 — 74- The Transfer Book. This hook belongs only to Joint Stock work. It is only where tlie capitiil is held in shares, and a corporate existence granted by cliartor, that the transfer of capital from one to another is permissible. In case of a change ot partners in an ordinary partnership, the the old partner goes out by an agreement for dissoUition, and the ncss partner enters the firm by a new agreement, in wliich all the members of the firm that is being formed are jjarties. Shares in the capital of a company are personal i)roi)erty transferable from one to another at pleasure, subject, however, to the approval of the directors of the company. 1. If the stock is not fully paid up the directo-s should \ury carefull)- enquire into the financial standing of the |)erson who desires t'^ purchase, to see if he will be able to carry out the obligations that the shareholder who desires to withdraw has incurred on the unpaid portion of the shares. 2. In many undertakings in order to protect the business. It is necessary to have persons only in the company who are agreeable, who v, ill not divulge the processes of manufacture, or special methods used by the company. This precaution is necessary to protect the company from persons whose desire in getting such shares might be to obtain a controling interest and to subvert or ruin the undertaking of the company or play into the hands of rival institutions. In the majority of cases it is projier for the directors to retain control of their stock. In some institutions such as railways, Xrc, where the stock is fully paid up, the only restriction placed on the shares is that the transfer book is to be closed for from fifteen to thirty days before a dividend is paid, so that the company may know to whom the dividend is payable. When stock is transferred the retiring stockholder must surrender his stock certificate and sign a certificate or short form of Power of .Attorney, either on the back of a stock certificate, or on an accompanying paper, or in a book kept at the company's office, author- izing the transfer of his shares by some person for him when he cannot attend at the head office himself. Form of Trduxfcr to he cndoi'sed on l/w old Storl: (^ertificftte : \]\: it known that 1, I'.dwin Reid, the hf)lder of three shares in the capital stock of the S[)ringvale Creamery Company, I, imiteil, numbered 22 to 24 inclus- ive, represented !)y the within certificate, do hereby irrevocably nominate, constitute and a])point Chas. \. Madden my true and lawful attorney to transfer the said three shares of stock to William Messenger, hereby ratilVing that all that my attorney shall do for the pro]ier carrying out of the said transfer. Signeil, sealed and witnessed this 3rd day of October, A.I). 1891. John W. Smith | '^^"^^■'■^- ''^■■"'' ('"S-) The new shareholder, William .Messenger, must sign the stock book the jamc as a shareholder taking stock at first. In this way he signifies his acceptance of the transfer. In some companies a book of forms of transfer, similar to the following, are kept as a transfer book. n Oi Oi I 5i ~3 h s 1 •St <1 1 • ^-) ^ O ^ 1 '^s* K, < Q t-H MX ^ ^ a s^ • ^' ^ ^ ^ •^ i U ^ :5 5 5> o 1 :5 , Si > ?5 ^ ■^ >w ,'•"' ^ 1^ 1^ o k ^ =; ^ '>^ 1 g "i i? s .-X <=: 5 "s :5: 2 Q Q < ■ CO m c5 Sj < < «> ^ "S ^, *> u hi kl ^ »S, '5o S. *5 ^ K^ ^ ■s. 1— (II I o '^ ^ B N C ■ss lU D i 2 J= < the mover and secondjr usually furnish the resolution written out, 'I'he chairman read- ing their manuirript, pats it to a vote of tlu m.-etin^, and marking on it '' carried " or | "lost" as the case miy be, hands it to the Secretary. .\ careful Secretary will preserve all su"h original resolutions, by-laws, <.\:c,, in case any dispute arise afterwards. A good! plan is to arrange them in order, [)ut in an envelope all belonLrin( a I'.oard of Directors by a Hoard (if Directors. 'I'he ap[)roval may be given cither (i) by the very meeting itself that made the minutes, or (2) by a subseciuent meeting. The second method is the more common, the ininules being read at the ne\t meeting of '.lie same kind and dieieupon a|ipro\ed or corrected and ajjproved anil .signed by the I'resident or (!hairman. If a meeting desires [to pass or ap[)rQve of its f)wn minutes, it may be done just before ailjournmem. by having [the minutes read there and then ap[)roved by the meeting before lliey leave the room, The following is a .Minute Hook of the Company : — .Mi.XL'I'l': IJOOK UI" .SI'RIX(i\ .\l,l'. ( Ri;AMi:R\' CO.MIWNN', l.l.Miri;!). l^eiipi-al niPttiiij,' of sliaieJKildor.s of tlic .'■ipiingvaU' C'rcanicry ('(.iiipaiij' ivt tlie ctlice (pf If. \\'hito, |Ks.|., OHt'ii Soiiiul. Miircli lM. In'.M. .Vlililk'iitiiiii wiia miit\<: .Maicli l.st Ijy |. S. Howes, |. McMllluii, W. A. M Kay, C A. M idik'n, |].. I'. \'()is(iii, K. Kfid mill II. Wliilt; to the [.iciUi'iiiiiit (lovei iinr of Oiitiiiio in t'tmiicil, for Lctti^ia T'iUi'iil iiii'ui'|ir)iMtiiij? tiii'ni ami llieir siu'C( .■^soir in ollicii, a lioily loi'poiatu to tiviclo iiiiilcr tin' tiiin liiiiii' of tlio .Spijiigvale Cieaiiu ly Coinpaiiv , l.iiiiilcil, anil tlio l.uttc-i.s I'utcnt liavinj,' Ipl'i'U iccfivcil bv liii' Secii'tary, tliu 1111 etiiig was calUil Ky H. Wliitc, j'roviiioi.al I'ti'siitcnt iiaintil in tlie Letters 'iitdil, who called tlio iiiecliiig to oidi r, an I .isUod the I'rovisiinal .Secielan , V. A. Mailikn, to tako |lie iiiiimtcs. Tlie .'Secretary pro;entei-k iird t h;,' Slock Hook lliowiii;; Ihe signatiiici of J. S Howes, >C():i ; |ohn McMilliUi, !<',Ul) ; W . \. ^^ Kay. >-t,UO ; ( '. A. Va.ldrii. .s'jiid; }|. Wliitc, .SiiiO: K. Hciil, .SSUU' : L. 1'. N'oison, .•;i(:(i: V. f. M. lio\\iill. .--.Mio ; and l»|iiMici| II) pel' cent, paid 011 all the above stuck Hinountiiig to s.'i'Ull, m d di {.o iud in ihe .Mciiliunts ^:iiik .t^'Jlill. .M'lVid liy F. ('. MoDowall, i-ccoiuleil by Iv I!ci ), 'i lial thirty sl.ar..s of tlie (.'.i])itul .Siojk of tlii.s fnniiiiiiy be allotted as follows : live .sliares to J. iS. H iwe.s, l?")!),) ; five s'lari^s to John Me\Hlliii, .S'i')'( : five s'l xr,}M to W. A. Mc- iay. .S'lllU : 111 roe shares to (J. A. .Madden, y'MH) ; flii'.'e slia.rcs to H. While, .■;-.'!;:(l ; three sli iros to Kfid, .-<;)( 10 ; tliree aharca to L. 1'. N'oiaoii, SiUH ; and llireo shares to !•'. ( '. .Mel )o\\ all. s.'iir). Noli:. It .is tlic custom ill iim>iy coinpunics to allot slums in the Co/'ital Stock l>y a 6-/i/,7\ // /'('///^ considered one of the most solemn transactions of the company. •mA !. ! i I . f ■; 1 M 1 !^ 1 ., :i I \ 78- |{(!id. That the genurul ))ylawH fcir the govern- Thai iho ^enrnil l>y hiwfi for the governiiiuiit Thvro liciiig Hiillicit'iit Ntock HiilMcribed nml ilnlv iilhilicil to hv^iii liiiMineHH acroriliiig to the proH |iu(;tu«, till' I'rt'NidiMit il('chir<'!< I'nwall to lulic ilie cliair. !•'. ('. McDowall, I'nsidi'iil pro Irm, ionV '\\v tdiair, and cnlliil for noniih»tionN for l>ircctorM. ioliii Mi'Millan iinniinulcil l^f. Wliilc, I' Uuid, ('. A. Madden. |. S. Houcm, I.. I>, Voiion and W. (■Kay aH Diri'ctorh, 'i'licri' litMni; u'< luithfi' nomiliulioiiH, tliu I'luiirinaii duchired Ilium elected, UH lix iH the nunilxT rei|uin'd l/v tlic V>\ lawH. It waH nioveil l>y John Mc.Vlilhin, stconded l>y V. nii'ht of tliu conijiany ln' rc»il tlu lnHt, lime ' \irrii\l. Tlu' by laws wt;rc nail by \V. .1 y .lohn Mi'.MIll.iii, -. nded liy !'). Keid, of the company lie read a hlioh,! lime i 'i;;//f,/. The hy lawM were read a secontl time hy W ,), dray, HoUoitor. Movfd liy John MrMillan, Hcconded hy V. Iteid, Yhat the grMieriil l.v lawn for the government of thiH company lie read u third tiM;c, simile. I li\ Ihc I'reniJent, scaled with the corporate seal of the (.'oniliany, and likewise enHroMMcd in the minuCH Carii,\l. The liy lawH were read a third time liy \V. ,1. (iray, Holicitor, »i){neil and aeiiled bh per reHolution, Noll'.. '///( h\ ItVtVs dl tin- ii>rpi'iiition agt' should he (iiposs(d in these minutes iiiiniediately nfter aiinptin:^ the liyhra's. On motion the aouotuit ot W. .1. ( iray, solicitor, for charter lees .st.")!), and serviccH 911), wui cr dcred to be paid. On motion duly moved and sfcondcd and adopted, the meeting adjourned. ('. A. MviiDKN, Senrtary. Noi'K. It is /')'(i/'er ti> /eti7'e s/>aee here sn that the iie.\t ^^eiieni/ mcelin}; i>l the share holders may eoiifirm thi se minutes at their meetin;^, in some form like this .• - " Adopted by general muetinj: of shareliolder.f as read this •JOtli day of December, IHlll." II. W'liiTK, J'resiiteiit. Oil'ict' of If. W'/iiti'. 0\vi:n SoiM., .Man ti 24, iHyi. Meeting,' of Directoin tdcctcd at toe jieneral meeting of the Hh.irtholders cf the 8priiigvale Cream ery Company, Linnted, held this dav, all the DirectoiM elect being present. Moved by L. v. \"oison, secomU'd by \V. A. .McKay, That II. White be President ; K. Reid, N'ice President : and '', A. .Maddun, Secy, Treasurer of tliiH Company Carricit. Moved by d. S. Ilowi's, seconded by C. A. .Madden, That a call of 40 per cent, be made on the shareholders payable on May 1st, and one of "J.'i per cent, payable on May 'Jlith next, at the Treas- urer's office, in C(im|)b- oiler submitted by John ,J. (Jib.sonnl W'roxeter, Out., to sup]ily and jiut in jjositiou, boilei', cngim . and all machinery and fixtures ready for operation, and supply all tools and appliance-^ necessary for the manufacture of butter, according to his phin, specilicalion and schedule attached to his ollir. Ve accepted ; said work to be done ami tools furnisheil complete, on or befoic .May 'JOth next for .'SititKI, to be )iaid thus; S(I(M) at time of completion, and the remainder six months after, and tlie I'resiilent and Secretaiy are hereby author- izeil to enter into an agreenient with him in compliance with this resolution — Carried. The meeting wai adjcmrned on motion duly adopted. Minutes adopted .May 10, ISlll. H. WlllTK, C. A. Maddkn, Secretary. President. Minutvs of Mectiufi of DIvectovs in t/io ()lJicc in the New Factory, May 10, '!>!. Members all present. The Presiileut in the chair. Minutes of last meeting read and approvi-il. The Directors hiving pieviously examined the wS. Ilowus, m'oniiiluil liy \V, A. MoKny, 'I'lml thn followiii^; acuoiiiit* )io |kmm>iI, in- iimlcil liy till- I'rcaiilunt ami Sci'rcliii'y, nml puiil by clii'i|iir : il. Loiighueil for IniokH kimI Ntatioiifry, j;i7.,'i(l: .1. K. Idkiiiiiioiiil fur |iriiitiiiK, HilvcrtiHiiif^, Ac, .'fll.lO; (.'. A. Maililvn fur MiilMiy lor iti>r> iu«t III |iMikJiij{ up piili'iiiiH, .f'J'J.'.'d Motion I lO //.,/. '\'\w wwvXiu^ wBH iiiljoiirni'il Dti iiioiioii duly currivd, {'. A Maddkn, Secrtlary. Mlauttti approved May -.tKli, IHjti. H. WlllTK, /WuiltHt. overiiMiuut OJfnr of S/>rinffr(il<('iri. 'I'lie lioaril of Diructoix mot on tlio ilatt> abovu nicntiDnuil. MiiuiberH all preNcnt. Thi' I'ruHiiluiit ill the ('hair. MiuutuM of lant nioeting read aud approviid. Till' hireutoi'H ini|)outi'd th<« work of ■!. .1, (iiliHon under liiH contract, and oheckud off tooli ami ikpplianct'H with the luhoitiile attiiclied to thii iiiiitiait. Moved by K. (', Mi'l>>>wall, Hi'eumlud liy V. A. Madden, That J. J. (iibson be paid the Cumpaiiy'H <:lu'<|ii(' for i^liill) and note tor .i^lllii:) at six month*, in ful' for hU contraut, the work and artiuleH fur- iiisliuil liviiiu vntiiely Hatiafaotory Carried. Moved by W . A. MuKny, necMided by I. S. Howes, That the applioation of Herbert Agiiow for the ponition of butter iiiiikor bo accepted, lie m do all the work in connection with the factory, and til lie iiiiiil .'i<4() per month. Time to begin ilune Ixt, and wa^es to be paid monthly Carried. .Nliivud by K. Keid, seconded by F. ('. Mcl>(iwall, That the otler of VV. j. I'atter He Nun to gather to funiigh all hofHeH, mid draw cream at one half cunt per inch, payable monthly, be iiucepted .spiiiij; wasona, drivers, Ac, necessary— Carried. Movuu by v.. Koid, Heconded by il. McMillan, That the oll'ev of F itarber of one iiiid three- fourtiiM cents per gallon for the buttermilk of the factory, payable at the end of eiicli month, be ac- cepted Carried, Moved by b. I'. Voison, seconiled by V. ('. .McDowall, That tlio .Secretary be paid a Halary of .<'ii) a mouth V'hile the factory is in o)ieration, and that he is hereby authmi/id to purclui»e such supplies aH may be leijiiired from time to time — Catricit, On motion the meeting adjourned. ' C. A. MmiUKN, Si,r,lary. .Minutes approved .Mine .'10, I8!H. H. VVmitk, President. .... < '•■; I I M Office of S}»'iiiti l/v K. C. M''l')o\v.ill $75, aivi ili.at ihj c!k'|ul's oI" ihc Comiiaiiy bu pa^soil to ;hciii iiiiiiif- iliately for t!u->f ;'.m mills Carn,'J. Miivoil in- I. S. llowts. scroiiiU'd by C. .\. MaiMcn, Tliil a iliv'ik'nd nf m per cent bi' i^aid to the sbanlMUiiT~ .> 1 ibL'ir ]i.iiil up Capital .Stocli, anuuinlinj; to $; i, [ujable on Hut iiiluT, ISHl, ami llial I'.u- 1 il.uici.' nf prnliis bo pLicc I ill lv'-iM\i' Vmv\~~C,ii>i,\f. \bivcil i'V L. I'. Voi.m, s(.for..loil by W. A. .McKay, '1 l.al .\. CiU'.rd and ('. K. (.rii;;; be the Aii- illt ll^ nf ih,' a\-co-.Mr-; of ihi-, t'ompaiiy f)r \\\i soi.'Joii 'pi-l do.-, li —(",;/;•/,•./. Nbived by r. A. Nbid'bn, seconded by 1.. I'. N'oImmi, Th-U tli'' .-Xniuial ('.■■iicial Mtetiiif; ofihisConi- li-nv be hi'id at ilio I Lad < 'l:u-e or, iho i;i''i of January next, and ll; .t tiie ii.j'.ii-e of the sam-j fe piililisliiHl ill llv "(Kvc'ii Sound .\dMTli-er ■' ■-(.■<;'/•.■, If'. The iiue!i.i<; adjourned by re.sobilion duly moved, sccmded. ;■ ml adopted. C. .\. .M \lihi:N, S,,);/,tiy. ne oun- eill ler in h,o e a I ih.t 1 for S. anil in},'st ini;v off .M-slaMrc ewe all I rect ir>. ct^e ..■fai 1 1. and ■f Ih^ Si — :e •111 immo- By-Laws. l",\i'rv Coinpanv makes a Sft nf l)y-la\vs for llic l.vl Micrnl ilirccliMii of ihc al'fa'rs nl" ihc Conipanv. 'I'licnc l)y laws r.uisl he in ai'conlaiiCL' holli willi i!k' IaIIois Tali-iU the ( 'liartcr of llij ('u:ii;)iiiy. S,)-n ■ (.'omiji-iic; arc nivire e\i)'.ieil in their l)y I those sul)iiiiiiecl here, hut many are lax on this point. an:l care'V^s nt A ork 1)V the In la\ ( r not. ■| ei and iws liian a., to whjtiier they iuith.cr nmen'.licis a ease \>l'.eic an nccoiint- ant iiad been lise years with a Cumpany antl hatl not in all that time seen a cojiy oftlic >y aws. The hy-laws are some times passed on fnsi li\' the Directors, and afterwards sulnnit- ted to a general meeting for approve By-Laws of the Spiingvale Creamery Company, LiiLited. Wliccas till D ircctois iif the Spriiiijvalc Crenmery ('omi'riny, Limiti'il, (Iceiii it c\in_'iiiL.'nt that certain liy-laws lor roi;iilaliiiL; tlu' atlairs hh.i'l \h: held at ihc olTiee of liu: ronipanj (Hi lli I'lr-'l Monday after the first day of l.\miaiv in e: vear, to ele ;iy cl Directors (oi il ch year, to receive llie r .ii-iiiiiL' \e,ir, .u.vl for ;di other ■f ti.e (."oni[iany's allairs eport of tlie Idreco'- lor the p.i.st rinse.-, lel.iiiii'^ to I lie iiianajjenicnt 'I'lial a genera! niceliiii; of the sliareholdcr.'- may he called at ary tinu' hy ihe Diiec'ors whenever tliev may deem tlie same necessary or advisaM;? for any purpose not contrary to Uuv, cr the l.vtters I'atenl nt the ('oiii|iany or the .Statiilc, ..nd it is incunib,'nt on llie I'rLsi.'er.t to call a niecial meeting of the .share- Iwilder.- p.ia >lieni ver reipiired so to ilo in wrilini; hy viiit-fmirlh part in value of the shar..holders of the Com- y. for the tran.^action of any li'.isines.s speciiied in sucli writien rei|iii^'.lio.'i and notice callin:; the meeting. I'hat the notice of tlie lime M,t\ pl.ice Itir holdini; the annual or a (genera itiiig of the Com- liany, nuisi he given at lea>t ten days [ reviously thereto in the " > )\\\n .Sound .Advertiser " or sticli other laper piililislud in ( )«en .Sound as the Directors may select, and also hy niAilin;; the same as a registered lette er ilulv aililrcss- il to ea.di slnrehohkr, at 'Ih.U meetings o f the Direct ir^ .sll.ill he hehl as e.nst ten days jirevious to siich meeting the 1 lUsiness o! tlie G aire, and sli.ill hj cal ed hy the I'resident iip.iny may re- lic ouns That at gener.d meetings of the C'omi^.ny. tvciy shareholder -hnll he cn'.itU d to as many vote shares in the Company, and may v ite by pri xy. •I ha! i|iie- ions at mei img. s liaii he decided l>v a in.ijor.ly in valae of tlie h in h'iders present, either in ))ei.-o.i or !■_ prosy, and in case the luiinher of vules is eipi.il, ihe ^le.^ident or I'hairman shal i.ive a deciinig or casting vote. 7. rh. . the affair.- of llie Com 11 form a i|iioriim. cS. That the I'rcsid-nf, \"w?-V mgst them-elves at the first hoard nn ij. That the rresident shall. nil nntta TwKs. lij managed Ifiard of ll.'e I )irc c.ors f wlioiii ilirce ,1, nt, and S ■ >■• ee'mg alter llie anmial me.aing surer sh.ill he eh' I i.en hy the Directors from if the if Directors and Sliareh.olilers \\l It, preside at all meetings ol the Company. II'- sli.dl call niecl- sistance to the Manager as nia\ hi s po.ver. cisc all llu' rights and pouer^ ol ihe rrc>idenl. li .\ D ecessarv, and shall advise with and render .'uch as ahseiice the \ ice- I'resident sha'l hav e ami exer- rectors Hector may at any tune .samnion a meeting 01 hat ipieslions ari iiig at am meeting of Director- shall ided I y a m.aj iray ( if vote ci-e of an eipiality of voles, ihe Chairman, in addition to his original vole, shal! have a casting vote. f Di- In I I. Thai the Sei ■Treasmer shall keep a ricord if the proieeJin!; at all meetings of the lioard id of the Shareholders of the C im]iaiiy, and shall he llie custodian of the seal of tlv ('om,iany papers, records, ca->li, vaUnhks, or seciiiilies, etc. i\er when aulhori/ed so to do 1 tlv e re-olulion, hinds of the C II oinpany as ori y a resolution 1 Iv -'P )f llie Board, to such uersoi Ihi :ifall L-longing lo li.e Company, wli;ch he shall de- n or per.^ons as may he named lered hy ihe iJoard of Direcu if ihe Company, and receive and pay out llie and lall from lime lo lime, whenever re- |uired, furnish to the .said Hoard ol Directors a linan;'ial statement of the athitrs of the Ccjinpany. Ily itiall give honds to the Company for the .suni of $ioco for the faithful diaeharge of his duties. It; ^-S mmm — 82 — 12. T.iat any SliarehoUler, who is the holder of three .shares of stock, nut in arrears for payments fnt calls upon his stock, may be elected a Director. ij. That the Directors shall hold ofiice for one year and until their successors shall be elected. 14. That in case of the death of a Director, or his being unable to act as such, or his ceasing to lie a Shareholder, the vacancy thereby created may be tilled for the unexpired portion of the term by the Boanl from among the i|ualitied Shareholders of the Company. 15. That the Company shall have a corporate seal of such design as the Boaid may determine, which seal shall whenever used lie authenticated by the signatures of the President and Secretary. 16. That the Board shall Iroui time to time fix the salary or wages to be paid to o'ncers of the Com |)any. STOCK. 17. Thai calls upon subscribed stock shall b; r.i.ide from time to time as the lioird may determine. iS. Thai it shall not be compulsory on the Hoard to receive full payment of any share or shares until the same shall have been demanded by call. 19. That the Board shall have power to summarily forfeit shares and the money paid thereon, upon which any call shall have remained unpaid for six months after it shall be du2 and payable, and such for- feit stock shall thereupon become 'he property of the Company. 20. That receipts for jiayments of calls shall be issued from time to time as such i)ayments are made, but stock certificates shall only be issued when shares are fully paid up, and both receipt and certilicate shall be authenticated by the signature of the President and .Secretary, and sealed with the t'ompany s seal. 21. That shareholders may, with the consent of the Board, but n^: -otherwise, transfer their shares, and such transfers shall be recorded in a book provided for the purpose, and u transfer entered on the old stock certificate signeil by the shareholder selling and duly witnessed, but no person shall be allowed to hold or own stock in the Con\pany without the consent of the Board. ACCOINTS. 22. That the Directors shall cause true accounts to be kept, Of the stock in trade of the Company. Of the sums of money received and expended by tiie Company, and the matter in respe '. 'f M'inch such receipt and expenditure takes place ; and Of the assets and liabilities of the C.ompany. 23. That tlie books of accounts shall be kept at the Mead Ofiice of the Company, and shall be open to the insiiection of the members during the hours of business. 24. That (mce at least in every year the Directors shall lay before the Company in general meeting a statement of the irolils anank account shall be kc))t in the name of the Company Board, and all cheipies shall be s'gned by the Secretary-Treasurer. at a bank to be s -lected by tin soi.K iior. 26. That W. J. tiray, Kscp, of Owen Sound, shall ba the solicitor of the Company, but he ma) .U any lime be removed by a resolution of the Company, passed in general meeting. 27- AIMHIOKS. Tint one or more .\uditors shall b; appointed annually by the Shareholders at the annual gen eral meeting, whose duty it shall bs to examine all books, vouchers and accounts of the Company, and all documents having reference to the busmess thereof, and to prepare a balance sheet and abstract of the affairs of the Company, and submit the same to the Board as soon after the close ol the financial year as possible, together with such suggestions or recommemlations as he or they m.iy think fit. ( HANl'.liNi; IIY-I.AWS. 28, That the Company at any general meeting may from lime to time repe.U, amend and re-enact iheje by-laws, but such change shall only be made by a vote of at leasl two-thirds of those present in per- son or liy proxv. Adopted liy general mealing of the Shareholders by a full vole of the SharehoMers present m person and by proxy, this i-jth d.iy of March, 1891. v.. Will IE, rnsidml. J C'orporate L CllAs. .\, Maudf.n, .Scaetaty. HI i J ?1 - 8j- • Application for Shares. '" Everything is (Kme formally in a joint St(j(k ("onipany, tiic Dircctcn- as a rtpre- sentative body having no official knowledge (if any matter of husinCNS, unless it is brought l)cfore a meeting of 1 >irectors, either by wruten or \erl)al statement. A single I'nector may know of some fact or business |)crsonally, but to know of it ol'ticially is ([uite another matter. 'I'herc is John .Smith the privatt individual, as well as John .Smith Director of the Company. If a person therefore desires shares in a Com[)any, he should make known his desire to the Directors by making a formal application for the shares. The followiig is a suitable form. APPLICATION FOR SHARES. mt 111' Ilia) It OwKN SiH-Mi, March 23, iSor. The Directors of the Springvale ( 'rcamery Co., Limited, Owen Sound, Ont. CiKNTi.EMEN, — Flcasc allot to me three shares x, the Capital Stock of your Company of the value of $100 each. I will sign the Stock Hook for same on receii)t of notice of allotment, and will pay calls on same in accordance with the terms of your prospectus. ^'ours respectfully, V. C. -VfcDoWALI,. When this ajiphcation comes beiore the Hoard of Directors, it will be their duty to consider whether the applicant will be a desirable shareholder, (i) .As to luiancial stand- ing that he may be able to pay up the stock when called ujion. f 2) That he is not the emissary of . in opposition concern, nor a man of cantankerous or (luarreh.ome disposi- tion, &c. They will reject his ap[)lication, or accefit it by passing a resolution or by-law alloting the shares. If the Director; in their wisdom consider that it would be pruden to give a smaller number of shares than the ni.uiber applied for, they could allot a less num her. Some Companies have a bylaw limiting the number of shares that any one person can hold, and the number of proxy votes th.it he ma\' -.ote on, so that one person would not he permitted to control the ( ompany. I.' [ion the allotment of the stock the Secretary would wiite a notice to the applicant for shares simil.ir to the following ; - ,cnl in person NOTICE OF ALLOTMENT OF SHARES. ()wi:n Sou.nd, March J4, iSyi. F. C. McDowall, ICs(i., Owen Sound, Ont. Dear Sir, At a meeting of the I'.oard of Directors of the Springvale Creamery Co., Limited, held to-day, three shares in the (Capital Stcjck of the Company, of $100 each, be- ing numbers 28, 29 and 30, were duly allotted to you in compliance with your application of yesterday. \o\\ will please call at my ottice and sign the Stock Hook ami make pay- ment of the first call of 10 [ler cent., amountmg to $30. Vours obediently, C A. Mauui;.\, Sec. Treasurer. 84- Votinp: Powers of Shareholders and President. According to See. 5 of l!y-la\v?, jwgc 81, inado in lianiiony wiili the Letters I'atent Ar.f, eacli sliarchoklev lias one vole at all general meetings of the {'oinpany for each sliarc lie (jwns, and may vote either personally or by proxy- that is, a])point another person to vote for iiiiii if he cannot he present. The pers(;n voting (or anotlier may ue Uirtxled to vote either llrst (and generally), according to his own best judgment at the tmie, or s«;cond, he may lie directed to cast a particular vote on some si)ecial business. In this Jui.t case he may vote one way on liis own shares, and another way on the shares he represents as a proxy. If there is anything due and unpaiil on shares, the owner thereof is not enti- tled to any vote on them while there is a call unpaid that is due Proxies are sometimes given for one meeting and its adjournments, like the sut)joined form. Sometimes for a definite time, such as one year, and sometimes it is a general proxy tha* is \alid until recalled or revoked. Know all men 1)\' these presents that I, John .McMillan, iieing the holder of ten shares in the ("apital .Stock of the Springvale Creamery ('oni[)any, Limited, do hereby nominate, constiuite and apjioint Harry White, my attorney for me in my place and stead, to vote as my proxy at the election of the Hirectors, and on all o'Jier business that shall come liefore the annual meeting- of the said Com[)any to be held at Owen Sound on the 24th da\' of March, iSyi, and at c\ery adjournnunt of said meeimi,'. Signed, sealed and ileli\i.reil | in the presence of ^'. \' ANDl'.SKN. Jun.N McMii i,.\N. (L. t.) 'I'ae stockholders Ikuc power to elei;t olVicers to art as the agents of the Company, and to make by-laws for their direction. They also give gener.d directions to ofticers what to do, and how to do it. All of these acts must of cour.^e lie in accordance with the laws of the country, and consisleu' with the charter. When such officers are appointed, the powers of the stockholders /i> do /'i/siiiess is really exhausted. It is placed in the liands of the olticers who are agents of die CJompan}', and bind such Coinp,uiy by their acts. If olVuers are guilty of fraud, misapplication of funds, etc., these oflicers are hable Id the stockholders, and amenable to the laws ui the land. If they are guilty of negligence, they are liable to the shareholders If they are incompetent, others can be elected in ;heir place at the close of their term of oflice. T\VO VOTES FOR THE CHAIRMAN OR PRESIDENT There \■^ a custom in t. iking a \'ote on any (piestion that is luite unknown ai m.my places, that is, that the rresident or Chair: :an has a right to v )te as a shareholder or |)irector when the \ote is being taken on an\ (paestion, and his vote sln)uld be counted just the s.nne as an\- other shareholder or Director. In case ther*. is an e(iuality of votes c.ist -";■ tie" the President or Cli.iirnian wlio has already voted, has a right as Presi- ilent or Chairman by virtue of his office, to gi\e the casting \i)te. Thus \oting twi'-e 011 the same subject — 01: 'e us a privati- iiidi\ idual, and once as an oftiu^r iflp Q U joined ^1 h cncral ^M S ^^ -1 > un ^H Z iiurcliy ^B < ^H Q. It shall ■ s on the ^H O >- ^B (£ U s )mpany, ^| < what ^H 111 laws ^B X the ^B ^a^ds ul ^H u J liable to ^H < > z ' of their ^H E Q. U) 1 ^M hdldcr S6'— M ' Cream Register.' " " 'I'lic fuicuoing Iijok docs not belong to Joint Stock Company work any n»orc tiiaii to ordinary l)(i()k-kn]iing. Tt is simply a con\cnicnci' that would be used by any intelli- gLMit book-keeper, v. hetlier the work belonged to a single individual, a partnership, or a company. It is a b jok to save entries. Instead of journali/ing every persons' cream every day it was collected, and posting it to his credit in a ledger, this is made to do for day-book, joun.al ;i:;d ledger, as well as a receipt book for patrons to acknowledge pay- ment of their D'.onli.ly bill. The test colunms are for the trials of the quality of the pa- trons' cream. Tour monthly tests are i^iade, and the average (juality found for the month. Suppose the a\erage test ivas 15 that is, i inch of cream makes ] ;"; lbs. bu.ter. The pa- tron is paid for } ;} of an inch, as the inch shoulil make a pound of butt -'r. Some fac- toricfi adopt a decii;:il system of tests instead of the fraction of a [)ound system here pre- sented. In either ( .:se the result is the same. The total quantity of cream delivered multiplied by the a\eiage test gives the (luantity lo be paid for. The person who gath- ers the cream should carry a book, ruled like the [)art of the Cream Register, in which to enter the cream as b.e measures it. When he delivers at the factory, the ([uantitics should be entered opposite the respective names in the ('ream Register. At the end of the month each pation's total is carried out. 'i'hoe totals added together should equal the sum of the daily totals of cream at the bottom of the i)age. 'I'he book-keeper in this way has a check on his own w(jrk. The amount due each patron is found, the sum paid to each, and his signature taken receipting such settlement. The whole amount of the payments is entered in one amount in the Cash lUjok. It is customary to enter the da\'s make of butter inuuediately under the total of «-ream for the day, also the delivery of the buttermilk, the total product is found by ad- ding up. The following is a sam[)le of the book used on the gathering wagon : — CREAM GATHERERS BOOK. 4 s !) Ill II !•_> l.'i 14 l.j Hi 17 18 1!) •2i) D. Coiiry J. C;ill>cit. W. II. loncs. W. \. buy. T. Mnorc. D. Koss. K. llatton. D. Campbell. J. liakcr- James Uiirr. (Piition.; not .nil tnicri'd Mil. Siif- licieiit arc cnl'-r- e(i to ^!io\v ilt;- siny uf book .) Sydenham. 1 Nl 111 ;,s oi- CKl ;am KOR JUNE 4 6 3 11 '•5 >5 i3 30 32 'S »7 »9 10 12 8 9 10 8 12 10 1 9 1 M 11 10 10 12 8 9 10 II 12 '.^ ! 10 12 8 •4 I ■> II l(> ■5 12 •5 16 13 II •3 12 '5 14 10 8 12 •3 It) 14 '.s 12 10 13 '4 "5 'j 12 '5 lb -«3 10 J4 ■ IS '3 14 10 12 15 ') 10 12 1 1 •3 14 16 10 12 II '3 12 II M 1.5 '.S 10 9 8 IS 12 S 10 <) 10 14 10 12 13 9 10 12 9 S S 7 12 13 10 9 8 7 16 10 12 '4 'J 12 11 lu 14 '3 12 9 10 '3 . I'ofcif m'2 :m7 ;{.{7 .{17 '.m 33ti \:m 1327 1342 !338 i;m :ui ft ^.. -87 — The Journal. There is notliing specially new in rej^ard to the Journal in Joint Stock work. This hook is used just as it was in ordinary work. There are some transactions that may seem new. For example, the one regarding the allotment of slock. iUit when we apply I lie ordinary rules for journalizing to them, there is no trouble. In the example men- tioned, the shareholder gets into debt to the company, therefore we charge him with the amount of his subscription in the Stock liook, and we credit him when he pays in capital just as we would any ordinary partner. The jirofits at tlie end are paid out as a bonus .ind a dividend. The bonus was paid to the shareholders by cheque, and immediately returned to the Company as the last call on stock. Tiicn liie dividend is paid in cash on the entire paid up capital. 'I'his is put in the Cash Hook. The only difference between this and the ordinary paying out of profits, is that the paynicnts are ciiargctl resi)ective- ly to Bonus and Dividend accounts, and these close into Loss and (lain, while in the ordinary partnership the Loss and (iain account is closed into I'roiirietor's account, and the proprietor is charged with his withdrawal. The Company work coulil be done in this way too, and the dividend credited to each, and each one chargetl with the payment. There is no need for this. Indeed it should not be done, as the share value is a fixed amount in the Company work, while the |)artners' aciouiu is subject to constant fluctu- ations in partnership work. 'I'he student will find the journalizing very simi)le if he will only apply the ordinary rules. It will be noticed that we have adopted the princi|)le of having an entry in the Journal or some other princijjal book, for e\ery entry in the Ledger, so tliat full eN|)iaiiation can l)e had for all entries. Iwen in the ordinary closing entries tiial are frecjuently iiuule only in the Ledger, we make them in the Journal, and in liiis way have an opportunity of writing out a full explanation of each closing entry. There is no reason why these should not be put in the Journal, and many reasons wiiy they should appear there. In this way we make the Ledger what it really should be a receptacle into which «// the business is brought and classified. This principle of making the Journal and other books historical, and the Ledger only a sort of collecting and classifying apjiaratus, does not belong to Joint Stock Company work alone. It is equally necessary for all kinds of work for private individuals, partnerships, associations, societies, &c., and if this principle were strictly adhered to there would be many an hour's work saved and many moments of perplexity removed. It will be noticed that the Journal entry part is in lieavy type, indicating that the en- try for posting should be written heavier and larger than the explanatory part. It is also worthy of attention that a memorandum should be made in the Journal of every offer made or received or acce[)ted or rejected, and contract entered into, and every agreement as regards salary, duties of ofilicers, date of beginning work, or dismissal, the date of oiiening and closing a factory, and all such business items as will afterwards be convenient for reference. \\'e remember of a case of a Sttuk Com[)any taking land, and a factory and lot, and a (juantity of plant, as payment on stock, and the entire deeds of the l.md and factory, and the bill of sale of the plant, were copied into the Journal. Do not be afraid of a few pages of Journal. Make your entries so explicit that there can be na 'k' '■n — f?8 — tl )ul)l abmil lliLJr iiKMning. While tliis is ncrcssary in onlinary siiigk' proprietor's work, il i. iIoiil)ly iicccssa;)' in Stock Company l)ooks, where all liie work has to he larefully scruiiiii/,c])rove where the ('oiiipany.^ bu-.iness is large, vi/., charge to Plant Accouat all machine y, engine>, boilers, \r., ih.U are fis.ened down or attached to the buildirig, and all pa", i, \alves, (Ivi:., belotiging to them, and charge to Tools .\ccount all movable articles, su:!i as hammers, wrenches, pulleys, icne-^, chain.s, tVc, ivc. Tliere is perhap.i no necessity for the liner division in the ca e ol' the Creaiiiery Company in hand. In case of a founilry or such business, the length of time plant will last as compared with tools, is much greal.i', therefore they .ire well lo be separated so that a proper amount can be written off c. !i liind easil\- at the end of eai h year for depreciation, the life of the tools being perli r)s three to li\e years, while the machinery with ordinary repairs and due care might last ■•: )m ten to iwent\- years. If the one (!ompany had several factories, it is right to keep a ,;parate IMaiU .\ccouiU with the machinery, iVc, of each. A com- plete inventory sho..l 1 be made each year of e\ery machine and article separately for each Plant Acctnmt ai the time when the stock is regularly taken. 'Phis will keei) -i check on the men using t!'..' articles, and [trevent them carelessly leaving the tools where they used them at work. It will likewise show ih.it it \\as defnu'tely known by the manage- ment that they pos-e,sed the tools and a|)[)li,uices reiMCsented by their accounts. If any i)ortion of the plant wc'v removed permanently from one foctory to another so that it really became part of the jilanl ol the other factory, it sheuld be written off one J'lant .\ccount antl on o the other, duis : - Plant .\ccount, l'aii, \V. A. McKny, (''. A. M.rlik'ii, I!. While, and ]•',. Rc'id, t(.^ the l.irutcnaiit ( lovmior ol ( ha iiin. in ( 'oiin cil, for Letters I'atent incoriHualinL,' them as a joint Stock Company, witli powers to nianiiraclure and ileal in CriMni- cry liiitter, also d.iiry produce, \e., under the eoiporatc name of S[)ringvalo ("rcamcry (!ompany, Mmited, M.iirl 4- 'I'he Letters Patent hasiriL; lieen received IVdni the Ciovi'rnnient, the Stock IJook ol the ('om|)any was opi^neii, I and tiic following subscriptions to the < 'apital Stock re- I ceived, and first calls of ten per cent, paiil by all in c.ish jier Cash Hook. I. S. Howes, five Shares at .$ico John .\le.\Iillan, I'isc Shares at n \V. .\. .McKay, five Sl.ares at ('. A. Madden, 'i'hree Shares at n H. White, II II !'-. Reid, ii n n I.. I*. \ oison, II II II !•'. ('. McDowall, h m u To ( 'apital Stock I 4 Real Estate, - -4 To Merchants Bank, Expense, -4 — To Merchants Bank, I'aid W. J, ( 'iiax-. Solicitor, ( 'harter I'ees, .$30, ser\-ices rendered, .$10, 1)\' chei[ue. 24 '{"he following persons were elected officers : Ii. White, ri-esidiiil ; V.. Keid, Vnr /'/rsidciit : ( '. .\. \\m\- (}n!\\ Secy.- Trcd surer: ]. S. llowcs, 1.. I'. N'oison, and W. A. McKav, Directors. 1)r. The offer of |. S. Sonier\ille of one acre of land for factor)' site was a.ccepti'd. 'I'he ileed was duly executed, and the price. .$::oo, was paid by cheiiue on Merch.nits Hank. 500 00 50000 50 J 00 30000 500 Ol. 300 00 30000 300 00 20000 40 00 ! \\\w. ^^(■I\enzie's offer to build a factory },(t x 60, two || storys high, with stone b.asement, as per specifications and '1 ])lans prepared by him, was accepted, payable $500 when work is cenipleted, and $400 in three months. ; Carried Joricard - - - ; 3240 Cr. 300000 200 00 4! f 40 00 00 I 324000 'M ^j: I •4 > , — 90 — OwKN Sot'N'i), March 24, 1S91. -Ja-u » Dr. Cr. Proiigfit fonvard ... 'I'lie (iffer (,f Jolin J. (iiljson of Wroxelcr, to furiiisli and fit up the factory witli 011^''^', boiler, shafting and machinery, water pipes, apparatus and apjiliances a com- plete outfit for t.ie manufacture of huller, was accepted, pa\al)le $000 on the completion of the work, anil $1000 in six months. ^fav 10 3240 Expense, To Merchants Bank, '{'he following hills were passed hy the Di- rectors, initialed, and ordered to he paid hy ( hecpie : liooks and Stationery, J. ],ou(,'- iieed, $37.50; I'rinting, J. V.. Hammond, $4i..40. I 4 i Salaries and Directors' Fees, - . To Merchants Bank, (". A. Madden's account tor salary was passed hy the Directors, initialed, and or dered to he paid hy che(|ue. — 10 4 5 Real Estate, To Merchants Bank, To Bills Payable, W. McKen/ie having completed contract of building .satisfactoriiy, was paid by cheque $500, and a note at 3 months for balance of account $400. The Secretary was authorized to conduct the bu.iiness of the Company at a salary of $50 per month during the season. 20 iMigagcd TIerliert Agnew as butter maker for the sca- .son, at $40 jier month, to begin June 1st, payable monthly. 20 Made an agreement with W. |. Patterson to gather the cream from the patrons at the rate of one half cent per inch, payable monthly. 20 Solil to Y. Barber our buttermilk product at 1 ?/( cents per gallon, payable monthly. Carried forward ... 78 324000 90 78iyo 22 20 900 22 20 00 50000 40000 '; 424110 4241 10 ■.4A1V 9' Owi'A SoiND, May jo, iSiji. lu-oii'lit puwaid - • Dr. Cr. S 4 5 Plant Account, To Merchants Bank, -, » ... To Bills Payable, ■ . ..- ^.. Jolni J. (iiJ)s()ii .l);i\iitj4 coniiilcti'd his con- irad 1)1' inacliim.'ry iiiul ;i|)|)li;ni(i.s ^ati^lac- torily, was paid by t'lu'qiK' $6oo and a tinlo at si\ months for i)alan(L' $iooo. JO Butter Account. To M. & J. Walla, e. '4941 n6oo 130 » l!(nij;iil (il M. i.\: j. Wallace, 'IV)r()iUb, on ac- »" count, a> per in\()i( 0, supplies of dviii")' ^dt, '- tubs, \( . Butter Account, r " - To J. Park & Son, Bouf^lu ol j. I '.Ilk iv Son, St, Lawrence Market, 'I'orouto, on account, (loooo parrh- ment wrappers. ... , ^ . . ; z •- -lulv 'JO -'—^ — ' ' S ' . „ . » lo{ 4341 10 ooli C)oo 00 1 000 00 00: I 30 00 1130a J. Piirk & Son, . -..-.. To Butter Account, * ' Sold J. Park \- Son, 'I'oronto, jooo IHs.Tub I _ Gutter, at jo cents, and 1 .SOH lbs. I)iitter in I lb. prints, at JJ cents. 11300 ' 857.00 4 I Merchants Bank, - Expense, To J. Park & Son, Drew on j. I'. irk \- S;)n at sight for animnit ot' invoice of Joth inst., less the amount of his invoice iil' wr.ipjiers, and had same tlis- counted at bank, lace ol' dratt $754, dis- count $1, [iroceeds |)laced to ('ompan\'s credit. •1 1 867 1 1 • ■' i 1 1 - 753 00 1 J 00 754 00 J. Park & Son, Aug. 3 To Butter Account, i' loSooo Sold ). Park (\; Son ,^000 lbs. Tub lUitter at JO cents, ^uid 2000 lbs. of butter in 1 lb. l)rints at J4 cents.' Carried for-ivard i' I oSo 00 i I \ StS^Iio,. S785 10 W}^^--Wh' f'- I 1 i> #, IMAGE EVALUATION TEST TARGET (MT-3) 1.0 I.I 1.25 ^ iillM ^ m .^ m It i^ M 2.2 2.0 1= 14 IIIIII.6 Photographic Sciences Corporation m iV «- \\ ^^ «^ ''^ o^ 5^17 23 WEST MAIN STREET WEBSTeR.N.Y. 14580 (716) 873-4503 :^. O^ ^l^^fF I' ! — 92 — Owen SouNO, Aug. 13, 1891. Dr. Cr. Proui^ht forward Bills Payable, To Merchants Bank, Paid our note in favor of \Vm. McKcn/.ic, due to-day, by ciicquc on l)ank. 4 5 J. Park & Son, To Butter Account, Sold J. I'ark iV Son 2700 lbs. Tul) Butter at 21 cents, and 1800 ll)s. of l)ulti'r in one pound prints at 25 cents. Sept. I o Merchants Bank, . . . - . . Expense, To J. Park & Son, Drew on J. I'ark t*v: Son at sight for invoice of Initter shi|)ped tlieni Aug. 31st, and had draft discounted at hank, and proceeds placed to the credit of the Company. I'ace of draft .$1017, (hscount $1.25. 30 W. A. McKay was elected \'icc President in place of H. Reid resigned. — "-.o — Wm, Messenger, To E. Reid, - . . . E. Reid, To Wm. Messenger, 1'^. Reid has transferred his stock to Wm. Messenger. Three shares, N'os. 22, 2},^ and 24, as per transfer No. i. sanctioned bv the I )irectors. Sei' Minute liook folio I'ace of shares .$300 ; amount paid up %22i. J. Park & Son, To Butter Account, Sold J. I'ark i^v: Son, Toronto, 4200 lbs. P.utter in i lb. prints at 26 cents, .$io(;2. 8785 10 I 40000 101700 •01575 125 30000 ! 22500 Merchants Bank, Expense, To J. Park & Son, Drew on J. Park iv Son ;U sight, invoice of 5th inst., and h;ij draft d'scounted at bank, and proceeds |)laced to credit of the Com- pany, l-ace of draft $1092, discount $1.25. Carried fcncanl 1092 00 109075 » 25 l|i3928'io 878510 40o'oo I I 1017 00 1017 00 30000 22500 1092 00 1092 00 13928 10 Owi.N SdlMi. ( )rl. ;;;. iS()l. M. & J. Wallace, - - . To Merchants B^nk. Dr. Cr. I ,^0 00 I 11 ' I ;^o 00 Komittod to M. \ j. Wallaci' <.lu(iiii' on hank tor in\()i(c of May jotli. $i,^o. 1 ! Salary & Directors Fees, To Merchants Bank. I'aid ( '. .\. Ml. Mm hy i lu'i|Ur on lianL 4 months' salai\ at .f'50 pir nimiih, $:!oo. Butter Account, . . To M. ft T ">V?.llace. Ikuight of M. V I Wallace, salt, till)-. ,in(l otlu'r siipphcs. a.s \\-x insoiii.', .$50. 200 00 ,;oo 00 ;ooo 50 oo ! The fmrtli call of 25 ut cent, of tiic siihscrihcd ! capital was made, payahlt.- l>cc. ist next. N'o\. :; — , J. Park & Son. To Butter Account, Sold I. I'aik \' Son. Toronto. ,^000 ll)>. of liiittcr in I 11). prints at 2\ cents. r^ooo 720 00 ' 6 I 5 Merchatits Bank. Expense. To J. Park & Son. Drew on |. I'.irk \: S:)n at si;.;ht. for shi])- ment of the 5th i,,st., and rcoived rretht at hank for ,nnouni ot' drift. Ic-s disconnt. l-'ace of ih'aft %-2o, disi-oiint $1. Bills Payable. To MerchmLs Bank, Paid our n.)tc in I e. or .il J. I. ( i.hs m. d.itcd .May 20th, due lod,n', 1>\ chvipie on hank. $1000. ! 71900 I 00 JO 00 1 000 00 1 000 00 J. Park& Son, . - - . 75000 To Butter Accoun^ 75000 Sokl J. I'ark \- Sun 2500 :lis. llutter in 1 ll>. prints, at _^o cents. Coniiii li. C. A. Mailden .<7.-.. H. White; .■<7."), L. P. Voison Si"">. W. Messenger .'*7"), and F. (". McDowail #7.">. Tills would cover the above entry in the Jounuil ami the one on i>i'. side uf the Cash Kook on same date. Dr. Cr. 17498 loj 1 7498 10 — I Paid up Capital Account. ... To J. S. Howes. W. A McKay. John McMillan. C. A. Madden, H.White. L. P. Voison. F. C. McDowail. W. Messenger. The ahove entry places the |i.iitl a( count capital in the Stock Ledger, the sharelioklur^ jrrounts being closetl in the General Ledger. Sec jiaiics Oo, 61 and i of -104. Carriid 1oi:,.'ard 50 CO 749 OOj 00 i I 75000' 3000 GO 22048 10 3000 75000 75000 500 00 500 00 500 00 300 00 300 00 300 00 30000 30000 [2048 10 ys OWKN SmSD, Dlt. I. 1.S91. /in>ii_^/i/ f'tiwtiid Dr. Cr. I i20^8iio J204S 10 4 {■i\U Uo ' / / .1 Loss and Gain Account, To Expense, Salarj- and Directors Fees, Plant (for wear and tear,) ("losing entries for o\iniisi'>. vVf. B'.itter Account. To Loss and Gain, ( 'losing entry lor iirolil^ nil l)Utttr. > Loss and Gain, . . - 1050 co To Bonus Account, - Dividend Account, I'jUrv closini,' accounts ol profits (lisl»iir>eel to slvire- | holders. f I Loss and Gain Account, . - - To Reset ve Fund Account, ICiUr) closing the sirphis profits remaining in Profit ; and i.oss Account into Reserve Fund. 76f,s Capital 3tock Account, . - - Reserve Fund Account, - . . - To Balance, Iv'try closing I'roprie ■)ry l.iahilit) .Accounts. Bilance, To Real Estate, Plant Account, Merchants Bank, I'.ntrv closinu accounts shouiiiL; asst-t-.. I 3000100! i 7668^ 307^)68 1-440 .\ii 30 100 DO jS 7;,o 00 300 00 7C1 ^^\\ 307C1 f)S 1 100 00 1 500 00 47^> ().S 31 74S 02 31 74X c: The Cash-Book. wm m ^'11 m -. '1 1 '.ift i £St' Tliere is nuthing i)eculiar regarding tlie ('a>h-l'.ook of a joint Slock ('oui|. ■, llieie fore there is nothing in tlie Casli-liaok here th.it would not he in any ordinary Cash ISook. Tile p.iynients tin butter account each month are jiut down in the exiilanation |iart ot' the entry in full, hut carried out into the payment column in total to save posting .\ sperial form of C'ash-liook will he presented in connection with the next set of hooks that vili he found verv useful where all payments are made hs |iciittl an arcouni wiih luancli of MetclinntN Hnnk, nml ilt'iHisitcd cash. .May 14 Merchants liank 26 4 Merchants Mank ^o 7 lUittcr Account 'JO. ■ Jiii/atur June 30 7 lUitter .Account \jO i Balance July 25 7 Mutter ,\ccounl x\ 7 lUitter Account , 1 I ^ 1 i I : S i 1 HahiiKt 120000 Depositcil Dcpositeii J 700001 I'aid frfij;hl an.in. ' -' 3" .300 00 Cash on hand I'.iid to palrons as per cream rcij'sttr for Miontli I'f June, $549.41 ; also paid 11. .Ay;- new's w.iges $40, and to \V. J. I'alterson for drawin};cream$I<).34,l>y order of Directors Cask on hand r.iid las. Morton for 211 cords of wood at %2. 50 i)er cord, by order of the I )ireclors. I'aid to patrons, as per cream rej;is(er- for July, $700; also paid II. Agnew's wa- t,'es ,$40, and paid \V. |. I'atter.'oii for draw- ini; cream $25, hy orde r of Uircitrs 300 00 ' 903 50 4(>50 1950 00 46 so ^>55 2$ ;ooo I Cash en hand 70500 Si 5 00 H2S6' 927 88 1 I i i I 1 Dr. •sr r=; acsasjsats; iSiji II liaiancc Aiii,'. 12 s I- I'ark \' Son Kt'ii'ivcil iliii|iic from .1. I'.irk i^ Son fur In 108000 vuici' ot liuttcr ithi|)|)eil 'Jntl iiiHt. ,?i 4 Menliaiil^ Hank Witlnln-w i 61^200 Sep. I I'.alaiHv IJiitter Accduiit Koit'ivi'il clici|iu' fiiiiM liiirbcr for liutturinilk sgio? for Aii^'iii-.t ' .^o 4 Mcrthaiils liaiik Witlniicw lialance ( )(t. I 7 lUittcr Account Uet'fivuil cliviiuc fmiii ISaibrf fur liutturmilk' fc»r Septeinlicr 50 ^ Mcrclianls IJaiik Witli.lrcw 656*5 112K8 I I 177200 1884188 4425 I 7>5:3^ 5i|88 620100 lialance Nov. 2 7 liiitter Accoiinl r - ISiitter Account 2(} (1 Mercliants liank :() - Hutter Account JS.957 67188 77520 Hecfivfil Hailiei's cliii|iio for liiilteniiilk for ^s I ? Octolier, ."tirill gallons ill 1 ,' cts. Soil] ,1. Mrl^iiiolihtn >t SoiiH, Owen Sound, for! 80 OO jiish. KMMllbs, nailer for cooking, iit S ots. Witlidrcw 15330 KciTiveil liarher's cliuimf for buttermilk for Novcnilior )ec. I ,:; lialance |. S. Howes ■john McMillan \V. A. McKav C. A. Madden 11. White W. Messenj;er I,. P. N'oison V. ('. NrcHowall 475'°° I 3822 'rroasurer, receiv eil fioni shareliolders amount of 4th call on stock, being 2.'i ' 2500 2500 25 00 75:°° 75'°° 75°° 75°° 75°° 64«.^5 jo 165 652 75000 7 5 ''5-' - 1)1) — 1891 If' Aug. 12 4 Mcrchiinls Hank |3' Butter AccDUiU lialancc Sep. '30 7 Hiittcr Ai count Balance c ASH. I'lmi p.ii I 11". :m pre Ciiniii Ki'iii-ter for .Viiir sii.'tii. |>,, I II, AiiiitwH WllJ,'^•^ xJit. hiiil \V J. I'aUi iM ii fell- (liiUMlig ire.iiii .*'■_'.■). Ciiili on 'Hiiiil I'liid pill inns, ax jkt Crcaiii HcgUter foi Sipiciiili, r. .S'l'l"". t'.iiil II. A),'iicw'i» WHgi'K #Hl I'liiii W . .1. i'alttTson for drawing crvniii iJ'J I. •-'.'>. ( ash on laiiJ ' I I C^r. i,S(c U}, •/ / -•/ iSS^88 I !_ ' 7?<>57 Oct. 3' 7 Butter Account i I i 3» 7 Butter Account Balance I'liiil patroiiN, aM per Cream Kegiater for th" 02000 inDiitli of Ootober, $.VJ(». Paid H. Agiiew's wa- ges ;«4n. I'iiid \V. .). Patterson for drawing cream !<"_'0. j I I I'liid freiglit and cartage Cash on hand Nov. ^ ^' Merchants Hank X '' Merchants Bank '^^ 7 Butter Account Deposited I{arber"« olieqiie Deposited Paid patrons, as per register for Xovendier, 4*4I)U. Paid H. Agnew't* wagen '^40, also paid W. J. Patterson for drawing cream ?*"iO. I .)0 (12 I 90 ' '' 77520 5.=! ','. 80 oc 4^)0 00 261 Salaries and Fees Paid C. A. Madden -i months salary at .■<)<», -°°o° 795 13 .sKHi. Directors' Fees H. White . ■!««), E. Keid I *!(», W. A. McKay *.> 1 )ividend Account Paid dividcml to slmreholders |>er Dividend Hook folio l(l."i, in cash I I > ^' Merchants Bank Deix.siied ! So'Vij 300 00 45<'52 75f'52 •r ^p — ICO The Ledger. 'I'lu'ii' 11 iiDtlim^ IimII) s|icri.il III >i |iiii I >VHk ( Oiuii.my l.ctl^cr. I; is kcpljusl llu' Siiinc .1 ■ in ordinary liook ke't'|)in_u. A |iiiiiil m i\,ii dii tlicri-iiilts of some tif the acroiiiUs would imt iicrlia[is 1)l' out of \)\,\i\\ \ In.- ( 'a|iit.il Stock An onnt shows the par value of all stock siiliscrihcd for. It doi ■i not -iliow an lliii)}; ahoiil paid up stock whatever. Il would I).' (!•. Iiiti'd if all)- sh.ircs were i inc JK d. The Sliarclioldcrs' Accounts in the icdu'cr arc in halanc o wlunc\cr thc\ l).i\( jmicI iiji ilicir shares in full, hence the necessity for a Stork Ledger where lluir paid up stm k uould \>v f luiid at their credit to show their interest in llie Cunipany. In lApm e Ai (iiint we find the cost of bringing money Iroin I'oronto, that i^ sometimes chart;ed to livhan^i An uunt or Discount Account, In Itutter Account on the I'.'hit side i^a'l the i o>i of the Initter, the cream, the drawing, thj l)uttetii.'l-crs wa^^e^, the wraiip.'r->, tubs, and other supplies used for it, and the freight paid on such supplies. ( )n the ( 'redit sidi' we liiui the pro( eeds from sales of both butter .Tiid buttermilk. TIiin .\( -oairL i onespoiuN with .\l erchandi.se Acconnt in an ordinary business. It elo-.es into Loss and (l.iin the sum.' as Merchaiulise .\ccount. If the I>ebit -ide is the };re.iter there lias been a loss be;ause it has cost more than it produced. If the ('redit side is the j;realer, there has been a j^ain, as there is in this case, of $i yy^^.zS. Instead of the iialmrj .Vrcjur.t sometiiius o|ieiieil in the ledger, \vc simply l)ring down the b ilancjs of ac -oants, sho.ving Kesoiirces aiul l.i.ibilities, ready for another season's work. I)K. I.S'.II. ( "J /»//'. I A STOCK. is'.n Mai. : \ r.\ Sundries Ck. I 300000 IMIM .Mar. .24 i'o ( '.»i)il.il Stock //. Mil IT I-:. 1,1! 50c 00 I M.ii . J4 lly ( 'ash Wax i )cc. i ii ii 40000 I 30 00 I 12000 I 7500 :^ 7500 30000 181)1 ;•;. in: in. Is'.H .Mar. 24 To Capital Stock .Sep. ,^0 " Win. Messenj^er I ,^00 or, .Mar. -'4 l>y Cash JJ5 DO Ma\ 1 ■ .. ' 2U .. I Sep. ,?o •! Win. Messenger I 30 00 1 12000 I i 7500 5 300 00 1 t' 5^500 101 I sill Mil (K. Mar .24 I'o r.i|»ital Slork i ,50000 M.u. .• 1 l!\('asl) I M.iv 1 .'. M i I .,■ ..' I , ! 1 Ice. 3 M I 30 00 I l.!0 00 I 7500 .? 7500 300 00 I I 300 00 IS'll I VI I Mar. 24 To Capital Stock ^oooo; Mar. -'4 My Cash Mav 1 Dei. 1 ir M I .^o 00 I I JO 00 I 7500 .? 7500 300 00 |,S!I J.S. JIOWHS. l.silj Mar. 24 To Capital Slock I 500 00 M. ir. 24 M i\ -•fi 1). c. I lly ( ash 5000 I || 30000 I 12500 .? 1^500 ^oc 00 1 500 00 I, sill ./0//.V MrMll.l .I.V. I '.■.-I Mar. 24 To Capital t,to(k M. I ; 500 CO J .\l.n. 2.\ \\y (.ash I, ' j.M.'.) I „ „ I, -V-c. I ,1 ;! 500 5000 300 00 12500 12500 50000 I.Slll • I l' Mar. J4 To Capital Stock 11'. .1. M< K.\ v. ' ! ' ' 1 ^oooo' .Mar. j | i;\ ('.isli Mas 1 ,.' n 2(1 ,, „ ! )i.c. 1 ,1 M 50000 i J 1 5000 « 20000 I 12500 3 12500 500 00 r~ liK. 1K9I Mar. i4 To Capital Stock — lOJ r. J M AhltHX. ,|oo oc I.NiM \l.ir. .'I It) (ash Mav I .. " l»c<. I (•«. I I I I ,)o 00 \\ liOOO «; 7500 iH(,i ' Sf|). ,?o To K, kcid ^ — p' .*.-^^ ■ WM. MHSSHSdHli. 1 1 Nw I 3 ,;oo 00 I Sf|). ,^0 llv K. Kiui ! )cc, I " Cash -t-rrr;^ ■-*-- 5 »»5oo -^ - ■ iiBiJb 00 REAL HSTATK, iH<;i May Dec. Suiulri cs llaian »c I Mar. 24 '!"() Merc hanis Hank jI ioooo ^ goo 00 1 10000 |l loooo l8yi| /Vr. / llv lialiiHie HILLS IWYMiLE, if \llOOOO t too 00 iS()i I Aug. I,? To McTcliants Hank 4 40c. 00 Nov. (\ 1 000 00 1 400 00 1 |S.,| May 10 l!y Real Ksiate 20 .. riant Account 1 I ,^ 400 00 ,? 1 000 00 1140000 M.A.J. WALLACE. 1891 Oct. ,^i To Merchants Hank 5 r^o Nov. 26 00 so 00 I So 00 I S(j 1 Ma> 20 Hy Hutter .\ecount Oct. 31 M II 4 , 130 00 5 5000 i«o< iS(,i May 20 To Sundries J- I /•/. !A"/'. 3 lf)OO0O 1 600 00 I ,1 I Sm I I >ei . I r.v Loss ami (ia Ml iial; nice « 1 00 00 I) 1 500 00 1 600 00 UK. 1 \ h'.\i' j:\si:. CR. |H.)I 'l.Mll Mar. >4 'lo .MiTclianis II. ink .' 40 CO />< i 1 tl\ /.(i|> i»//i/ (iillH iV 1J440 May lO „ S 7S.K' liilv 20 .. J. I'ark \ Sim I 1 uo Sep. 10 M M n 4 1 -'.^ 1 1 Oct. 30 M II " s 1 .'5 t Nov.: K H M II (I 1 Ou 1 •< 36 tt (i >• * (I 1 uo IJ 1 t 1 1 i 1 J 34 40 1 "■^^ ' i 1 ./. /M/.'A A .SO.V. lSi;l iSmi II 1 |uly JO To HuUcr Account 1 .Sfi; 00 M.iy 10 lly Ituttcr .\ccouMt 4 1 ' ,^ 00 All^.l 2 II M H 4 1 OiSo 00 July -'5 ti Siiiulrii's 4 75400 " .?' M M II 4 1017 00 .Xii^;. 12 M Cash 2 loKooo Oct. s II M t( 5 1 'i()J 00 " .1. 10 M Siiiulrios 4 101700 Nov. s »■ H It (I 7 20^ J. I )rt. 20 " 5 109200 " -'5 •1 M l< f> 75000 Nov. 8 1, n 2() 11 „ (\ 72000 6 , 75000 1 ■ , ,[ 1 , SALMill: .s' 552600 .S52'' 00 i.\7> niifhxrroits feics. fsgiT |S()| - ., Mav 10 'I'o .Mlk liaiit^ 11. ink .^ Z2 : J />!■<■. 1 />'\ J.t'ss tiiid Gain S 4i3 io Oct. 31 II •! II 5 joo 00 , 1 Nov. 2h H Casli ,1 JOO r.n ; 1 , 1 I I ! .\2.i JO 432 20 HI IS.H. A/'. - \'M)K '" May 20 To M. \ J. Wall.icr 1 1 ;oi-T luh 1 lis Cash 2 50 75 II 20 • 1 I. Park \ Son 1 M.^O .. JO ■•' J. Park \- Sun 4 867 00 M .50 11 ('ash 1 .\?^ " .1' II C,l^h 2 f'5 63 lunc .?o II 1 ()0S 75 .\ut;. J •1 J. Park \ Son 4 1080 00 July ^5 II II 5000 .. _^1 II II 4 1017 00 " .-.0 II J 7(1500 Se|i. 1 II Cash 3 .■^9 07 Auk- .51 II 1. J (11)5 Of) ( )i [ I 3 5' 88 .Sep. .SO II - ''.s"-5 ■■ 5 .1 1. P.irk \ Son 1092 00 Oct. .11 .1 (i.:oco .Nov. 2 1 It 1. Cash 3 55 '3 II .?I II II l!.;0 -1 5 II .1 80 00 II .1" II M. \- 1. Wallace 5 500c 11 1 5 " J. Park \ Son 6 720 00 Nov. 26 1. Cash ■ ^ 4(1000 II 25 II II 6 750 00 26 • 1 /.OSS and (lain 5.^j(.(,,S , •1 Cash — » 3 38 22 i:>"l 68 m I rf^f Wi. 10} I)K. l8qi i Mar. 24 May I 11 26 Aug. 1 2 Sej). 10 Oct. 5 Nov. 2 8 .. I H .. 26 Dec. I, MEIiCU.'i.M'S ll.\M< To Cash I. I'ark \- Son ("asli J. i'ark \- .Son Cash r. I'ark \- Son ("ash J. I'ark i\; Son Cash I t I 4 ;,ocooj Mar. 24 liy Real llstati I 20c 00 , " 24 70G ;,)(, ' May I o T > ', oc ■ I o '45'',^ .■) I ? 101 July loi^o 75 ,^ 5 ' .? 7 I(; oc All So CO ■ " 74(;co Scj). 45052 Oct. Nov I o 20 June _^o 1 r)cc. 2 Halaiicc 1891 Dec. I I'o Hank 1891 : I )e<\ I To (.'ash i8«)i ' /kt. I To Jhilamc 3' 26 26 I )ec l'A[)ensc Salaries and I'ees Real I'.state I'kuu ( 'ash l{ill> l'aval)ie Cash M. \- j. Wallace Salaries, Kees, \-c. liills Payable Nr. iV J. Wallace Cash Honiis Account Halance ,S264 7,S 470 OS noxrs ACCoi'iXT. io 00 I S()i /)i\: I /)'i' I.osi and Cain DIVIDEND ACCOIJXT. ^ ;oo 00 I S(; 1 /)((•. / />'r /.iiss and iiain h'ESh'/,' 1 7-; A acouNT. S 76 6S |S()I |)e< . I l'>y Loss and (lain Dec. 1 r>y D.iiance 1S91. I>ec. I To Sundries LOSS ASD <;A/y. I S() I 1 1 8 64^1 Oo 8 105000 .A'cscnr Auniiiit S -()6S 1 1. No\. ,^0 l>y lUitter Account ck. 200 40 78 2 2 500 600 608 7f>5 400 6 (J 2 056 00 00 (>o 20 00 00 75 00 00 00 25 62000 13000 20000 000 00 5000 47500 25000 476 68 '8264 78 . I. >if li> /,cr vrnt, on thr palil u/, c(t/titiil, (li'rUinil hj/ the Dinvtnrs. Xoretnhrr I'', IS'.U. i.c-dm- Kulio. Naiiit; .01 101 101 102 100 102 101 lOi I. 8. Howes ■|no. McMillan \\. A. McKay C. A. Madden H. White W. Messenger 1,. 1*. XOison F. ('. McDowa I'ost Ortuc Su..sk i^ ,1 jrcit s.ning in a large Company. On un. other page where S;oik Ledgers are diMii^-i !. will \w found a combined Stock Ledger .ind Dividend liook tiiat the author |ilaiiiiLi| >oine vears ago for an extensive manufac- turing companw This shortens the work coii-idiralily. ^■^■fwr 1 06 The Book-keeper's Balance Sheet. The sul)joined form is ilic kind ol liaiamc Sluit usually lakcn off by the ho()k-keei)er for his own use. It would he of im \alur to ilu' a\craL;c sliarclioldcr as it would lie ijuite unintelligible to him. it is howcvir ihi- Kwis dlilu' siatinu'uts ot Resources and Liabil- ities and Losses anil (iains, lor puMic .iticin, ihil lollows it. When this lialance Sheet is correctly drawn off. all that is nocc^saiv m (udor to iiioducc lh(i-.c that roine after it is to make an analysis of butter accoiuil to :.< i at the rost nf \arious jiarts. i!ic cream, thewor'<> &c., and a division of the product of the In turv mtn iiib, roll. \c. and buttermilk, then explain your result in worcN. I'lu' lumk kc< pi r wimld 1 lo^c liis .Tcioiiiits accordin^i to this sheet. Springvalc Cycainay ( oiiipaiiy, Liiiiiicd. BOOK-KEEPERS BALANCE SHEET, TAKEN DECEMBER 1, 1891. Ledgr Kolio. Nanit", l.r. I 1 5 4 Capital Stock Real Estat Plant Account Merchants Hank I 1 100 00 1600 00 8264 78 I 7 7 6 Expense 12440 Salaries, I )irectors' I'ees 422 20 Ikitter Account 415,^40 Bonus Account 75000 Dividend No. i ?oo 00 K.> . i \.\a.U :-oo 00 7788 10 ^026 68 1 1 00 00 1 500 00 47668 I iains. 100 00 124 40 422 20 75000 500 00 1671 I 78 1671^78 ^076 68 I 16116 60 •773 2S 177328 I Total Profits 177^ 28 ! Expenses, HoinisiV: Dividi-iul \in)(\ 00 Balance ti'ln' carried tn Ko-crve :(i (lis I'Dtal Resources 3076 68 1 .laliiiitics 0000 00 Not Rfsour, c- 3076 68 M \kiNi. \ y I'.ud up (.'apilal Rr-.crvc I'uud 3000 00 7668 r. A Q 3076 68 I07 Balance Sheets and Statements. It is customary for tompaiiifs lo m.ikc St;Ucinents of tlic business and staniling of the Company once each year. Such statements may be made half-yearly or oftener if desirable. 'I'hese statemerts should show liie present standing oi the (,'ompany in a statement of .\ssets and I.iatii'iti 's and the suctess that has fallen to the lot of the Com pany on the transactions of the year; this is shown by a statement of Losses and Cains^ These statements should be e\plained clearly b\ using sutYicient words in connection with each item, so the ordinary shareholder wiio is uninitiated in the "mysteries of Double l'"-ntry Hook-keeping" may be able to understand exacth' the profits made and the [ires- ent worth of his shares. Obscurity of statement will create distrust, therefore great care should be exercised in their preparation. Sometimes a statement of (;ash receipts and payments is asked for in Stock Com- jiany work, but not often, as such a statement ijclongs particularly to corporations of public character, such as towns, townships. Ovc . and for sucii corporations as Mutual In- surance Com|)anies that are carrieil on to t;i\e members their insurance at cost ()rii'e and not for the purpose of trading and making iirofits, -Ml such Corporations as. school settions, hospitals, trusts, benevolent societies and all corporations that iiave to do with public charities and schemes for public benefit like .\gricultural. Horticultural, .Xpicultural So( ifijcs and Associations, Mechanics Institutes, \c., not being trading cor|)orations for the purjjose of making profit, publish only the Statement of Resources and I.ial)ilities. and Receipts and Expenditures of cash. 'The fiiiancial statements are usudly [jfjp.irjd by the Secretary or Accountant of the company and the books closed, then iho auditors verify the statements from the books and sign them. As there are chapters to follow, on balance sheets, statements, auditing, \.c., we will leave the further discussion of these matters to be taken up in them n statements for Shareholders and General Public. Springvale Creamery Company, Limited Sfdti'menf of Assets a ml f.idhilitirs. t(ih-cii JM-etnhcr 1 ISUl. j ASSr.TS. I.IABII.rilES. Real F.state riant Account .... (.ess written (.f for wear and tear . .... lOOO oo lot) oo 1 rooof) 1 end CO ''.lid up 1'aj.iial Ke.sttvf luml.. .... JOOO (X) 76 68 i Cash on deposit in MLrch.mts HanU (T'^' •J-"^ .5076 ()S 3076 68 \- We certify that we have examined Uio ery Company Limited, and ihai thu firejj Decemljer isl. 1S91. linen .'Sound, I>ec. i. iSoi, HulnTs, liank hooks, &c., of ihe Springvale Cieam- in-ji al)^lract ol the assela and pro; rietory liabilities at A. (Jill ORI> C. K. C.tiiiK; A'JDITOKS, mm^ 108 i SPRINGVALE CREAJ*/;r!:'^V COMPANY LIMITED. Sfdtcnnnf of /j»sscs diit/ (!(tiiiiid Slmreholders .■iiid ii 1 Itiiliince Ciiiiied to Itj.serve ,(i:; . iiuile necessary tiiat accounts with ■. \:\- m idc from one to anodur very fre(|u.'n- i hilinci' may he taken anytime with )Ut 1 ,1 r.c c helween the Dr. iialance of paid uj) t. 1 dance of the ('ai)ital Stock Account in c'liaid capital for which shareholders are n.ii'ihe Dr. balances of all Shareholders" L "1 S;iirk Ledgers will he further discussed . '1\ to till' consideration of several labor- ■■ milts, lOi; Stock Ledger OFTHE Sl'RINCVALE CRKAMKRV (OMI'.WV 1,1 Mlli:! ). Dr. 1H9I. PAID UP CAPITAL 1S!»1 STOCK. Cr. Mov. 30 To Sundries "t i 1 1 8 300000, 1! 1 \ 1 ! 1 1 ii 1891 J. S. II OWES. I8UI Nov. 30 By I'aiil up Capital 8 ;oO CO 1891 JOHX McMILLA X. IK91 I I I 1 Nov. 30 l$y I'aid up Cai)itr 8 ' 500 CO 1 ! I 1891 1891 W. A. McKAV. ISiH Nov. 30' liy I'aid up Capit.il 8 500CO WM. MKSSKXGJJH. IMitl Nov. 30 Hyl'aid up Capital S 30000 no 18!ll C. A. MADDEN. IH91 N0VJ30 By Faid up Capital 8 300 00 1H91 II. wniTE. ISHl Nov. 30 By Paid up Capital •j I 8 I 30000 1891 L. P. VOISON. IK!) I Nov. 30 By Paid up Capital I 8 300 00 1891 F. C. McDOWALL. 1K9I Nov. 30 By Paid up Capital 8 i 300 00 ii I J I The Government Report. When a charter is granted by a jrovernnient giving a company a corporate existence the government reserves the right to demand annually a report of its affairs. In case of hanks a monthly report is re(|uired of circulation, notes held, etc. Insurance Companies are required to report annually their financial condition by a report on a form prepared by the department having control, duly verified by atilidavit of the officers. In a .Men an tile or Manufacturing Company a very simple report is reijuired by the Ontario Ciovcm ment : See Sec. 57 of the Ontario .\ct, pages 36, 37 and 3S of this work. The annexed suminary gives the particulars retiuircd in sub-section 2 of 57, and the following list of shareholders complies with sub-sections 4, 5 and 6. List of Shareholders. SPRINC.VALE CRKAMIiRV COMPANY, I.IMirKl). List in duplicate of all persons who on the 31st day of December, 1891, were share holders in the Springvale Creamery Company of Owen Sqund, as re(iuired by Sec. 57. Cap. 157, R. S. O. Names of Shareholders alpha- betically arranged. Address. Calling. Howes, John S. Madden, C. A. McDowall, K. C. McMillan, John McKay, W. A. Messenger, W'm. Voison, I-. 1*. White, Harrv Owen Sound. Cicntleman. Soo 00 Accountant. 300 00 Farmer. 300 00 .Mariner, 500 00 Merchant. 500 00 I'armer. 300 00 Farmer. 300 00 Manufacturer. 300 00 3000 00 Amount of .Sto(:k .-Viiiouiit iiiipuid siibacrilied. on stock. N'othinj;. Affidavit Verifying Government Report. The following is the form of aftidavit for verifying the list of shareholders, and sum- mary attached, as required by Sec. 57 of the Statute before cited : - Province of Ontario. \ In the matter of the Annual Report of the Springvale County of Grey. .- Creamery Company, Limited. TO WIT : I y^.^ Harry White, President, and Charles Augu>itus Mad den, Acconntant, of the above named Company, each for himself, and sjjeaking from his own knowledge, doth make oath and say, That the annexed list of shareholders, and smn- niary of the affairs of the Springvalfc Creamery Company, Limited, are, to the best of our information, knowledge and belief, true and correct in every particular. Sworn before me at Owen Sound. \ H. Whiti.. in the County of Crey, r- \ m this tenth day of January, 1892. I * • •^- ^'\'^"' >■ W. J. C.R.w, (7 Coiinfiisst'oner. 6-^f. PMl! — T i: !#li I ^ - .o w i. -non Kv\\\ R.mi.D.ijd ,iiit «v Xiniili IK) .1111 Jll S.llHinf .H() Snjin.Kls-.M iii' V III I jiiDiliiiii.iii^iil .nipini i|Mis I •III. up .<(( i>i.n( >(.vi)^; [i.iidtm ■ui ai]1 j(i i.i.icls.i.i III •'|'i''!i .1.111 I -^ a'iukIiiih, ).ii|i |i) s,i.ni|oi|.inM|>,' ►; i|.)|i(.tt .l(i| lllli(iiii\- pniil .'il|J ' >i; ! -(Ill II l>p:| ,l() IMUi)] i '-J\l 113.1(1 .MA,)II .».\\!I| ll-Ulltt , i a.i.niils j(Hiin(iiii\- pi|iii.iiij_ ' J ■p.Mi.Hinj = SM.1VI1S ]() llllll)lll\- IWil .111 |_ •pni ill Kjp!, ) JO imidiiiv ivi'>l .iq.l. !<]pi, ) jn iuiiipi,") ,1" luiujiiiy •Ii'\)J'l l^'M ~ "'l"S P'^"^'-'! iiiiKiiiiY' Di]|^ ■loni , Oip .H111« 'l>.1ll»^I 1 •S ' « &^ 1 X >* *.» cc •o . -1 ■fca \ it, 'A Q^ .id M.-iijUin. 1.1(1 |.;ii c»i dii I ^ |1 J.". iur>iii,j,Tii3Uinin:> .T.p -.ijvim .1*^ J.i>|ninii ni] | 'pDpi.VlIP SI 11 1|.M1H\ I _ Ills' ,)i) .1.11111111 \ I '^ llllllll •) ;l|p JO ■>|.101;^' ■ ~ |i y luiiiiuii! ,111 1^ I >^ :^-: g*!"' c ».a. 4-1 1) 0) n a o — 5J 3 ~ C « U ■S ^ Ji 3 3 '^ o '^ g 2 -a 2 c o o .,2 o SC i; c -5 i .S « a. to a I ^ = S u T^ c V S c CI o o 2 ^ - - 2i go ij P 2 o C O in o o a. c 3 a 2 O 4J o — -^ i3 I -5 o rt 3 C r < 1) a. o a •a rt ^3 C rt 3 3 O y o rt c o Jl t! HI •Si u > o a. O rt u e ^^ 2 -y: 3 4> C rt u Sf 3 o 5j rt ^n "r > £.50^ rt 3 a- 2 o * ^ -S rt ^ a. 5 "(J rt C ^ ex u So := O O rt M,:< ■« £ 3 (U ^ o 3 u c -a rt !£ o. 1; ..o c 73. > « T3 .2 ii > u VI 5 S .£ v5_ 3 o 1 - ■ in u *-• .^4i;ss' .J. o •- ^' 3 2 rt •*> ♦.» " *-» c U-. O C o a 1— . o v: c 3 B ^ c si c — rt pQ - OJ r: -5 « a- O X — H3 - Directions to the Student For Kkei'INO thk Books of tiik Si'kim.vai.k Ckkamkrv ('(nipANv. I.imitkii, for the Si:coNi> Skason, r.KiM; ihk \\.\\< iStj^. The student will do well to lamiiiariA' himsell' with tlu' tninsartions of the first year's business hpforc beginning work on the serond year, >u that he may i)e able to carry on thp work of this year. The best way to do lhi^ is to write up the first year's business in your books. ' A second factory is purchased, and ln)lh are run for tiie season. A separate account is to be kept with each factory so as to fiiKl the |)rofil maile by e.ich for the year. Sep- arate apcounts will Ije kept also with the Real l^>late and I'laiU of e.ich fictory. In beginning the work of the second season, if you have not already done the work of the first season, and thus hive the accounts with balances brought down ready to be- gin with, you must open accounts in your ledi^er for the Resources and Liabilities, and enter up the Resources to the Dr. side, and the Liabilities to the C'r. side of the accounts. The Resources are : Springvale Real instate Account, .$1100; Springvale i'lanl Account, $1500; Merchants Hank balance, $476.6,-; ; Liibilities : Capital l^iock, $3000 ; Reserve Fuad, $76.68. Vou will oi),'i up a separate Stock Ledger, and debit Paid Up Caiiital Ac- count, and credit the individual shareholders with their paid upcajiit.il, as per entry at the topofpage6i — also see Stock l.edger.p.iges loyand 110. Vou will draw uj) the Stock Hook AS on page 6S, leaving sufficient room (ov additional subscriptions for the new slock that i§ to be issued. Vou will likewise prejiare a Sh.ue Rcgi>ler, as per [>ai;e 73. I'Jiter up the shares already there and keep sutticient room for twenty more shans to be taken up .at an early date. Vou should now take a tri.il balance of both t leneral and Stock Ledgers, to prove that they are in balance, before beginning the following transactions. You will be careful to avoid posting any ordinary transactions to the siiareholders' Cyipital Accounts. If you have any business trancaclions with the sh.ueholders, open pri- vate.accounts with them. \o other business, not even the pa\nient of a dividend, should be mi.\ed up with the account with the shares of stork and payments thereon. You will enter up in your Minute Hook the minutes of the amuial general meeting, and'all^ meetings of the Hoard of Directors. They will meet at least once each month wjiile 'the factory is running, 'i'hey must sanction all paynunts 1)\- resolution. Notice particulafly how this is done in the Minute Hook, pages 77 So. Kwp your Minute Book entered up every month as you do your work in the Journal, etc. do not leave it behind. Balance .your Cash Hook every month, nnd post all transa'tions as you go along, if possi- ble — do not post less-freciuently than once a month. •■ .Take a tri.il balance at the end of every month — make it in the form of a (ontiiuieil trial balance to save writing down names frecjuently. Memoranda of Transactions. an. 10, \)2. At the .\nnual CieneraL Meeting at the Company's otVice, the following persons were elected Directors : IL W hite, ). S. Howes, W. A. McKay, C. A. Madden, L. P. N'oison and 1'. C. .McDowall. The Auditors' report was adopted and ordered to be engrossed in the minutes. HP i if il — 114 — Jan. 10 At the Hoard Meeting which folluwed, H. White was re-elected Prtsidtnt ! W. A. McKay, l^ice President ; and C. A. Madden, Sttrtlary. The accounts of the Auditors, A. Clifford $5, and C. K. Cirigg $5, were passed and ordered to be paid by cheque. NoTB. Debit exp«nie for the Aiulitorv' Feea. Murcli 20, A meeting of the Directors was held at the Company's office, and the offer of Peter Torrance was considered. He offered his factory and plant complete, being a building 30 x 40, and two stories high, with complete ap- |)aratus for carrying on the manufacture of Butter, and is run by water power. The factory is situate on one acre of grouhd which forms a part of lot No. ii in the 2nd concession of the township of Derby, and known as Coldstream Creamery, at $1200, payable $200 cash, $600 in paid up stock of the Com- pany, and the Company to assume payment of a mortgage of $400 due S. J. I'arkcr, Oct. ist next, with interest at 7 per cent, from April ist next. 'i'he offer was accepted, at a valuation of $650 for Real Estate, and $550 for plant. Chetjue on bank given for the $200. NuTK. Debit Coldstream Keal Estate for #«.)(), and Coldstream Plant Account ■'!t,"),')0. Write cub appliuution for shareH and notice of allotment, as per page 83, for each of the shareholders for stock taken in the following transaction : — The $2000 of stock in the Company heretofore in reserve, was offered and taken as follows ; Peter Torrance $600, which was fully paid up in his deal with the Company, J. S. Howes $200, John McMillan $100, W A. Mc- Kay $300, K. C. McDowall $200, C. A. Madden $300, H. White $100, W. Messenger $200. The stock was subscribed for and allotted, payable as fol- lows : 25 per cent, at time of subscription, 25 per cent, on July ist, the re- mainder at the call of the Directors. The first call was paid in, in cash. It was also decided to remove i)art of the Springvale Plant, as per schedule amounting to $150 not re(iuired, to the Coldstream Factory, to make a more complete outfit there. NoTK. Dohit CohUtreum Plant Aucount $l.'>0, an<). Make an entry crediting the shareholders and debiting paid up stock in the Stock Ledger for all payments on stock in addition to the ordinary entries in the Jour. nal and Cash Book, charging the shareholdfirs with the capital subsoiibed and credit- ing them witli ])aymentB thereon in the (general Ledger. May r. .'\t a meeting of the Board of Directors held at the Company's office H. Agnew was engaged as buttermaker for Springvale Factory, and P. Tor- rance for Coldstream Factory, at $40 per month each. W. J. Patterson agreed to gather the cream for both at i/^ cent per inch, and the buttermilk of Springvale Factory was sold to F. Barber for the season at 1^ cents per gallon, and that of Coldstream l-actory to J. P. Redfern at i^ cents per gal- lon at the fai|uunt transactiona of the tame kind. Vott will rule up and make out a Cream KeBister for eucli factory similar to that on page K'>, for the month of May. They should correspond in aiiic unt with the ulove entry. June I. Received from V. Barber his checjue for 844 gals, of buttermilk at ij-^c. per gal., also from J. J*. Redfern che(|ue for 760 gals, at i}<^ cents per gal. NoTK. Credit the Hutter Ac :oimt8 of the reepective factories with the amouuta received for ita output of buttermilk in this' and ul^ suhsv<|uent cuscp. sitcd in the bank. NoTK. The student will make out an instalment list for this second call payable to-dfty. In addition to the entry in the (ieneral Ledger, put these amouDts in the Stock Ledger by entry " Paid up stock to the shareholders." ! > In tl U' I ; llilt' July H. II., »i i< 26 M .^' Aug.- 1, " -5- II 2S " 30 ,, .V Se|. '• II 1^ II 2() n 29. Oct. I. 2X. 3i- ~ii6 — Drew ( lic(|uo on liank and rtniittcd it to M. & J. Wallace for invoice of May 9tii. .Slii|)|)t' llutttT at 21 ccnt.s ; also from Coldstreara, 1890 lbs. Roll Mutter and 1 51O lbs. Tub Huttur at same price. ,,, Received from J. I'ark & Son cash for shipment of a3rd inst., $1456.36. 1 )irectors met and ordered the following amounts to be paid in cash : — Springvale Patrons, $482.60: Wages, $40.00; (lathering Cream, $22.14. Coldsfeam -Patrons, $460.35 ; Wages, $40.00; (iathering Cream, $23.19. Deposited in Hank $400. Received cash from K. Barber for 1618 gallons of buttermilk at if^ cts., also from J. P. Redfern cash for i6y2 gallons at i ^^ cents per gallon. Shipped |. Park \' Son 22S0 lbs. butter in rolls at 25 cents per lb. and iS6d lbs. butler in tiil)s Ironi Springvale at 19 cents ; also 2192 lbs. butter in rolls and i(t. .^ I — 117 — ' Paid C. A. MaddtMs salary fur 6\. months at $50 per month, by cheque. Deposited in liank cash on hand. I'aid each 1)1 li>c |)iiect(»rs (except the Secretary,) by cheque on bank, their fees of $10 each, for the season. NoTK. D-ar^L' Siihi) uiul DiittctorN' Keen Account with the Heoretkry'i S»Ury niid tlio Dii'ootdi'H Fei'H, n» in tliu foniicr ycur. T'.iuy do Dot Iwlong to one factory, but to the gi'iioral (ixpeiiiiu nf tlif Coiiipaiiy. Factories closed for the season. Write off for deprcci.ition of plant from Coldstream Plant Account, $70 ; from Sprinj^vale i'laiit Acioiint, $100. Kstimate the Real Kstate of both fac- tories at its value according' to the account. Take off a preliminary balance sheet to estimate the profits ; you will find them $3272.55. Submit the same to the Hoard of Directors for consideration. You will nrjw proceed to pay a dividend of 25 on the paid up capital amounting to $1075 by cheques on Merchants Hank, and carry the balance $.< 197.55 "^^ profits to Reserve Fund Account, as per resolution of the Hoard of Directors. Close your books and make out -tatenent of losses and gains, and resources and lial)il- ities, similar to those on pages 107-108, having them duly certified to by the Auditors, and you are ready for the next Annual Central Meeting of the share- holders, at which the rejjorts will be i)resented, and officers elected for the ensuing year. In preparing the statement of losses and gains for the shareholders, be careful to ^how the net gain on each factory's operation:^ during the year exclusive of general expen- ses such as secretary's salary, directors' fees and depreciation of plant. Analyze the nrtake of iivrtter carefully. Write up a report of the secretary relative to the business, give the result of 6b.servations. (i) ■ As to the patrons, and the cream su|)plied by them. ' As to gathering and delivery of the cream. As to the manufacture of the butter. As to the marketing of the butter, t*c. ' As to the relative merits, cost, etc., of the steam power and water power ' (2) (i) •'■ (4) (5) factories. (6) (live suggestions as lo the businj.j.s methods you would advise for the next season. - ' • " . The secretary can easily give a l)ird's eye view of the entire business, every detail of which he is familiar with, and thus fully inform the shareholders of the past experience of the company and forecast the future for them. Such a report should be made to share- holders at each annual meeting of the company. In some companies the secretary presents a report and the directors jjresent one as well. This is almost always the case where the secretary is not a director. !1 s ati-' It? i 'Milk Register OK KINCARDINE CHEESE FACTORY, For the week endiriff June 10. 189:?, NAMK. j Monday, ; 1 TofSDAY. Wkd SE8. ; ThursuayJ; Friday. Satur. Total Mor. Ev. j 242: 263 Mor.j Ev. Mor. '2.34 Ev. i 233 Mor. Ev. Mor. 1' Ev. Mor. 241 Ey W J. Patterson 23« 236 237 237; 234 232 2627 Abraham Einch i 226 264: 268 2f>() 277 275 274 279 268 264 274 2935 M. Haugh 347 3''4 296 356 ■339 3(>^ 376 384: 386 397 393 4000 Robert Lewis 76j 77 74 79 66 68 75 76 77 72 79 819 H. Sinclair 97 96 •94 ,7« J ^.86 88: 87 92 93 96 92 999 2676 2608 2794 2576 12 2638 2594 IS ' 278i|2632!2684;2746 2734 7 29703 Number of cheeses 12 12 i| 11 1 llT and weight 557 '•)■ 1 573 ' 570, : 565:1 S76j 293 13134 In close connection with the creamery business is the cheese factory business and the abijvc is a form suitable for keeping a record of the milk supplied twice each day by each patron. We give just five names and the totals at the bottom for each time the milk is gathered. Underneath is the daily number of cheeses made and their total weight. At the right side is the total column for the quantity supplied by each patron, for the week. This may be transferred weekly to the patron's account in the Ledger or this form may be extended for two or four weeks according to the times at which the patrons are paid. With one writing of the names if the columns are extended far enough, four weeks may be summed up a-id the patron's receipt taken on the book the same as on the Cream Register on page 85. There will be little trouble in adapting this form to the books of any factory. As the milk is weighed when it arrives at the factory this is the first book into which it will Ix' entered, unlike the cream that was measured at the paHon's residence and entered into a bojk carried by the mm who gathers it. Dividends on Wet and Dry Stock. In many places where cheese and butter factories are established, there is much di vergence of opinion as to the modes of sharing of the profits. Wet Sto:k is that held by a patron who furnishes milk or cream for manufacture. Dry Stock is that held by a per- son who simply furnished capital for erection of buildings, &c., and supplies no milk or cream. He does it as an investment. 'I'hese factories are usually formed among thi- farmers themselves, and arc urually looked upon by them co-o|>er ative concerns, and the amount paid in on slock for the erection and ciiuipmcnl of the -tig- factory is by some considered a sort of " donation for l)enevolent purposes." In some factories they adopt the principle of dividing the profits wholly on the stock — this is to a certain Extent unfair to the patron, as his milk or cream is necessary to produce proht. In other sections of country they divide profits according to the quantity of milk or cream furnished, and leave the Dry Stock out; a proceeding evidently unfair to the persons who furnished the capital. Inasmuch as the shareholder is necessary to the patron in these semi co-operative concerns in order to make any profits ; and inasmuch as they are really mutually dependent, a division of profits may very well be made to both — ist a dividend equal to good interest to be paid on s'ock (capital,) and the remaining profits to be divided among patrons according to the (juantity of cream or milk supplied. It may be argued that this gives the Wet Stockholder two dividends. He has a right to them in his double capacity of capitalist and patron. The agitation against the " dry " is to a certain extent a process of freezing out of the capitalist by giving him no profits on his investment. In semi-co-operative factories the practice is to pay out certain rate per inch of cream or gallons of milk each month for aU that has been delivered during that month retaining from half a cent to one and a half cents per inch or gallon after paying cost of manufac- ture until the end of the season, so as to have something on hand in case of any loss be- ing made. At the end of the season the fair way would be to pay a six, seven, eight or ten per cent dividend to the shareholders and tlivide the remaining profits among the patrcns according to the quantity of cream or milk supplied. Suppose the to:al milk manufactured were 76584 gallons, and that there remained $574.38 after paying all working expenses, salaries and dividend on stock. We find by division that this is just 3^ of a cent per gallon on the total amount supplied, hence the patron's total gallons for the year, multiplied by f^ of a cent would give the balance due him. In many ''actories built and run on the semi-co-operative plan the patrons are setting aside a small fraction of the profits of each year and with this fund gradually buying up the slock, when all the slock has bae:i purchased and the pro[)erty is deeded in frust. I'hey are run afterwards entirely on the co-operative plan. The above discussions ana processes are only heard of where factories are built by Airmers among themselves and where a butter maker or cheese maker is paid by the month or l)y the pound ol the commodity manufactured. >\'hen such factories are form- ed the stock is sjiread as widely as possible .so as lo increase the influerce and patronage of the farmers in the community. In all such cases a proper sum should be set aside each year for th-i renewal of the plant and appliajices, when they wear out. There are many cases where stock comjiany factories are formed, as in the foregoing creamery example and who purchase the cream or milk from the patrons at a fixed price and run all the risk of profit or loss, there is no such thing as "wet" and "dry" stock in such factories. ■ ''■;:> i^li. IWI idt I20 ■I [ Books Suitable for Businesses Where Large Numbers of Men are Employed. . .^-VVe have taken as a sample lasc tlic ("anada Jjtoiie CQiiipany, Limited, to show .special bookji for kecpin,^ account of men's time who arc employed on any kind of works Of in any large shop. , AN'e need not mention many of the huijiuesses where such forms ,AviU )je apphcable - only a few, such as railway contracting, lumberinjj, building g;^n,erally, .aijidhous^. contracting, steam-boating, ^:c. We liave five foremen leniployed on five diffcr- (el\^.,\vorks ^u the following business, and the books are so arranged that each piece or kind of work shows its own i)rofit or loss as the case may be. W.e give e.^amples chaijg- ; ing. material, Ial)or, iVc, from one C()ntra(■^ to another, i"v:c., when taken from one to the other, also where material, etc., furnished for a contract and charged to it, was afterwards , reported by foreman as helonj-ing to plant of the firm. The cross entry is made correct- ing it. We introduce special hooks, sucii as the ^V'eekly I'ocket Time-Book kept by the foreman on work, anil returnefl weekly to head otilice. The ofiice time-book, into which all the time is copied from the se\eral small time-books .ns they are returned, and where the workm.en's accounts are made out. i'lie pay-sheet, that is a summary of the tinie- book, and f;-om which the paymaster i)ay?, and on which he takes the signature of the workmen as a receipt for the money. I'he details of the Contract Book, which keeps, an : aijalysis of the cpst of the varjoui? departments of work instead of keeping separate ac- ,cour\ts for each kind in the, ledgfir, the .spe(;ial form of cash-book, etc. .::• We have recorded the transih:lions fully, and inserted explanatory notes of direction .'to the .'learner wherever we have thought desirable, reminding of the routine of Joint Stock Company work. The business from the beginning down to May 13th are regular trajisaction-s based on real transactions. in t'^e work following it will be noticed that in , dates we have skippetl from May to November, and that the amounts are large. Tljt; re- maining six months" business is added together and given in about the length of one month, as we believe the .same end will be served as if we had repeatediUionthly such trans- actions as are here given. Our totals give the six transactions collected in such, a way as .to shorten the work and give n.Uural results of the season's work: ■ The'Student is recommended to read the transactions over carefully, first to get an •idea'M'the natute of the businesH, and then examine the various books, the forms which a*e presented after the memoranda of transactions, and lea^n their uses.. Special atten- tion is drawn to the form of Cash H lok and Hank .\ccount combined, which is here pre- sented;' 'ft is very Obnvenient, and adapted especially to company work whcrtiall pay mentS'i^¥e'n^tide by che(|ue. The Journal and Ledger are similar to those thestud'ent is aJready'rfccuktfe'med to. and need no special reference in this ccnnection. ' For ail'l' special forms of books here presented, it will pay for the student to have a book of- plain',' faint, ruled foolscap, in whici> he can rule u|) all his forfj s to suit himself. All such books would have to be specially ruled for any comuany wishing to use them. Do not think that you can recollect all about them ')y simply looking at them — rule them up and use them. 'I'o actually work the entire set out is thj only thing that will bo of real, last ing benefit to the student of such work. 121 MamMniia of Transa^ions of the Canada Stone Co. Ltd. Authorized^ Capital ■f/idOOO coiiNistiiii/^of ■''"// shtiirs of -iiloo each. . , ', ,, .. fitrnrpoiritcdJiini' Sfh, /SO..', an. 10, '92. Application was this day made 1)) Harry White, Thomas Hrett, William , .; ■ . Morrison, William James (Iray, James Re.tii, John Samuel Howes, Fred :Ac- Dowall and Samuel Juhn Somerville, to the Secretary of State of the Domin- ■. ' ionofCxnada at Ottawa, for l.ettes Patent incorporating them and their successors, and all who should l)ecome as.-ociated with them, under the cor- porate name of the Canada Stone (!om|)any, Linn'ted. Authorized capital $50000, divided into 500 shares of $100 each. The i)etition was duly signed by the above named persons, wiio asked in tiie i)etition that the following be provisional officers: H. White, PrcsiJfiil ; James Reith, Vice President ; J. '" S. Howes, Sec-Treasurer : James MasEon, Si./icitor ; and Thos. Brett, Fred McDowall, and W. J. dray. Directors. Head Office at Owen Sound. The Stock Book was opened, and tlie f()ll.)wing amounts duly subscribed for — JosiahTolton acting as witness : H. White $10000, Thos. Brett $8000, W^m. Morrison $5000, W. J. dray $5000, James Reitli $7000, J. S. Howes ^ $5000, F'. McDowall $5000, S J. Somerville $5000, payable 50 % on or be- fore Feb. 25th next, the balance when called for by the Directors. Note. The stinlent will write out a pi'ot^ijoetu.s, an application to the Secretary of .State for Cliarter. with all thf' rei]\iinite atii!eling. I'i) The iidvjrti-ieinent of meeting for local paper. (3) Write up the' Minute. Uook for l)otli meetings, and for all snlise|ucnt meetings with- out being further reminded. (4) Writ^ iij) a set of li^-iaws for the government of the Company, and have them approved liy the Keneral meeting, alid- writfe but Share Reg- ister. (5) Write notice of tirst call of .V) piyal.le on or l)efore, 'J5th inst.,8uchas would b« sent to all shareholders. H. White conveys to the Company as part payment on liis stock, the Gray Quarry, situate in Owen Sound, being jjark lot No. 9,'on'the 3rd range west of river, containing twenty acres, by Warranty Deed, value $2000, also (juarrying and contracting plant pet Bdl of Sale, valued at $6000, Thos. Brett conveys to the Company as ])art jjaynient Of his stock, the Sandstone Quarry containing fifteen acres and appn achcfi, being a part of lot No. 4, on the 5th concession of the town hip of Mono, vhlue$i50o, by Warranty Deed, also plant for quarrying, iS,c. per Bill of Sale, $1800. Feb. 5. .T-i i m 11 m MM Ili-MI — 122 — Feb. 5 James Reith conveys to the Conn)aiiy as part payment on his stock, by deed duly executed, the Red Stone Quarry of eighteen acres, being part of lot No. 7, on the 6th concession of the township of Caledon, value $4000. This , is subject to a mortgage of $2000 made in favor of \V. J. (Iray, also quarry- ing and contracting plant as per Hill of Sale, $2000. \V. J. (iray pays the ('ompany his certified chcviue for $3000 and dis- charges the mortgage held by liim against the Red Stone (,)uarry for $2000 in full payment of his stock. NoTK. Charge all ({uarries to Rual Kutate, and all plant to one general I'lai ■ Account. M 25. Received from subscribers their first call of 50 % as follows, per their certified cheques : J. .S. Howes $2500, Fred McDowall $2500, S. J. Somer- ville $2500, Wm. Morrison $2500. II 28. Opened an account with the branch of Molsons Bank at Owen Sound, and deposited to the Company's credit all the cash on hand. NuTK. All money should lie deposited in the bank, and all payments to be made by cheque. Note the mode fur keeping the Cash Book containing both Cash and Bank Accounts. Mar. I. Paid James Masson's sight draft for expenses connected with the char- ter, by cheque No. i, $320. Paid invoice of Warwick & Sons for books, stationery, etc., by cheqiie No. 2, $136.20. Deposited with the Canada Pacific R.xiiway Company, checjue No. 3, $2500, with our tender for i)ridge No. 764 across the Don River at Toronto, also cheque No. 4, $2000, with our tender for bridge No. 846 across the Thames at London, Ont., and cheiiue No. 5, for $2400, with the Corpom- tion of the City of Toronto with tender for curl) stone. Note. Charge these clietiues to Tender De]iosits Account. At the meeting of the Directors, the salaries of the officers were fixed for the year, as follows : H. White, President, $300 ; James Reith, \'ice Pres- ident and foreman of Red Stone Quarry, $800 ; Thos. Brett, foreman Sand- stone Quarry, $800 ; Fred McDowall, foreman Cray Stone Quarry, $800 ; J. S. Howes, Sec-Treasurer, $800 ; W. J. Cray, Book-Keeper, $600. Note. A separate account will be kept with each Quairy aid Contract, and everything; that the Quarry or Contract costs will be charged tu it, inchuUng the salary of the foreman, as above specitifd. The seveial accouiits vill b' cicrlittd with Vliat they bring in, and the profit on each piece of wurk can thus be arrived at. The valariei of President, Sijc. -Treasurer and Book-Keeper, are chargeable to Salary Account. II 28, Advanced to each of the quarry foremen by cheques Nos. 6, 7 and 8, the sum of $200, to enable them to make advance payments, payments of board, &c., when necessary, and to pay off discharged men at a time when the pay- master was not at the work same to be refunded to them by paymaster on his rounds, and to be refunded to the Company at the close of the season. Note. Debit each foreman personally with the .^'2(MI entrusted to him. Received notice from the C. P. R. Company that our tender for bridges Nos. 764 and 846 have lH;en accepted, also from City of Toronto ordering stone. 123 — A|)ril I. Hcgan work on bridge No. 764 over the Hon at Toronto, as per contract entered into with C i*. R. Co.npany to-day, excavations being at 90 cts. per cubic yard, and masonry at .^13.50 per cul)ic yard. The Railway Company to move all plant where re(,iiired, and transport all stone, ike, from our ([uar- ries at their expense. Began work on bridge No. 846 over the Thames, London, excavating to be at 75 cents per cubic yard, and masonry $12 per cubic yard. Stone and plant to be transported as in No. 764. Advanced to W. J. Mulock, foreman on Don contract, and Mich.' el Connoly, foreman on London contract, $200 each, perchecjues Nos. 9 and 10, on same terms as other foremen. •I 20. Shareholders who have paid up less than 80 % of their stock, paid up to- day enough to make up 80 / as follows : James Reith $1600, 'I'hos. Brett $3100, W. Morrison $1500, }. S. Howes $1500, V. McDowall $1500, S. J, Somerville $1500. Deposited all the cash on hand in the bank. I. 30. Foremen report as follows: (Iray (J»uarry .shipments to Don Contract, No. 764, $2000, to London No. 846, $1500. Sandstone Quarry shipments City of Toronto, $4245, also Red Stone Quarry shipments to Lionel Yorke, for Parliament Buildings, $2920. Note. Chaige contracts and persons with all shipments made to them, and credit the (juarry shipping the material. Drew on Lionel Yorke, Toronto,' for the amount of our shipments to him this month, and had proceeds of draft credited at bank. Collection $1.25. Paid the following bills on account of Don Contract, No. 764 : McRae Si Co., Ottawa, cement, checpie No. 1 1, $320 ; Wilson iS: Son, Toronto, sand, etc., cheque No. 12, $62 ; Biddon iS: (!o,) Toronto, lumber, cheque No. 13, $536.20 ; Poison Iron Works Co., repairs, checjue No. 14, $76.35. Paid for London bridge No. 846, the following bills per cheques : Mc- Rae & Co., Ottawa, cement. No. 15, $227; Wallace Bros., sand, No. 16, $24.60; W. B. Simpson, timber. No. 17, $331.45; L. Pickerton, repairs, No. 18, $41.36. Paid Gray Quarry supplies to Redfern & LePan, cheque No. 19, $136.44 ; Redstone Quarry to T. L Thompson, cheque No. 20, $72.27 ; Sandstone Quarry to R. P. Butchart iV Bros, cheijue No. 21, $184.26 ; and John Swin- ton, for wood, per che(iue No. 22, $225. May I. The foremen report charge to C. P. R. Com[)any Estimates Account with, and credit Don bridge No. 764 with 750 yds. excavation at 90 cts. and 690 yds. masonry at $13.50. Credit London Contract, No. 846, with 635 yds. excavation at 75 cts. and 6^6 yds.- masonry at $12. XoTE. Keep an account with C. P. F^. C/Oinpany estimates for the estimated amounts due from the Company on all contracts l>y the foremen's measurement. We thus know how much to expect, and have an idea of how much profit is being made monthly on e»ch contract as it is credited with measurements. Should the measure- ment at any time not agree with that of the Company's Engineer on any contract, a trass entry will write it back if too much lias been charged, and an additional entry will 9prrect it if the engineer's estiinate exceeds that of the foreman, ■ 51? mm M May I.' Cs.j ..!•, V . •; II lO. II 13. .. 13. Nov. I. I'lii — 124 — . J. S. HowoB, Sec- rreasiircr, draws from hank, per cheque No. 23, mone y to pay workmen's wages, per Office 'I'inie Rook and I'liy Sheets, as follows : (Jray Quarry $1787.91, Red Stone (^)uarry $1658.50, Sandstone Quarry $1985. ■65, Don Contract, No. 764, $;8(j8.75 • london Contract, No. 846, $2765.50. Note. Charge total amount to J. .S. Howes personally for the present time. Credit hitn and charge the vario\i8 contracts with their several amounts when he makes his report, aa having paid them. Kven if some persor were not on hand to get their pay and it is brought back, let the tctnl wages earned be charged to the contract where the work was done. All amounts returned by a |)ayniaster as not paid will be credited to " Unclaimed Pays Acco'uit,'" an 1 should lie piy tiiese on a subsequent occasion charge the amount to Unclaimed Pays Account. Received from the C. V. K. Company checjucs for 90 % of the amount of the estimate: for April for contracts Nos. 764 and 846. Deposited all the cash on hand i.i the bank. Note. Credit C. P. R. Company iSstimata .Account wiih the amounts of these cheques. The 10 per cent, retaioed is kept as a guarantee that tha work on Iho con- tracts will be continued. J. S; Howes reports having paid all tlic men on the pay sheets of the sev- eral quarries and contracts, as per entry of amounts of May ist, except J. Koomer $425 and W. Simpson $5 of Sandstone Quany, and J. Knaus $70 and A. McEwen $71 of (Irjiy (Juarry. (See note on entry. May ist, relative to this.) Received from C. F. R. Company our marked chccjues sent as deposits with our tender for contracts Nos. 764 and 84(1, and deposited .same in the bank to our credit, together with tlie amount of Unclaimed Pays ( n 1 2th inst. Note. In the remaining transations we hi.c added togetlier the business of the season's work, believing that we have suthcienb to jlliitrate the various rpec'al fea- tures of the books used for this contracting Irjsiaess, and f jr any other busiiies' where a large number of men are employed without 11 muUipliciition of entries. We theie- fore have collated six niontlis' work and ciilled it one moiiili. We called it the month of November, as the bills are usually paid during tlie tiist half of tliemonth following the one in which the work was done or the debt contracted. Foremen of quarries rejwrt the following: Cray Qu'arry shipments to Don contract. No. 764, $8981 : to London contract. No 846, $8oi8; .Sand- stone Quarry, to City of Toronto, $12525 ; City of Montreal, $3737.50 : Red Stone Quarry, to I.. Yorke, $6237 : T. Voigt, $8036.75. Foreman of London contract reports to charge to '' London contract ex tras " and credit to London contract, \o. 846, the cost, of retainmg wall and sheet piling, $6580. ^ .. ,, .i- ,.- Foremen on contract.-; report work done to he charged to C P. R. lis-ti- mates .\ccount : Don hridi^e Xo. 764, excavation .$31 20 70^. masonry $32010. 80 ; London contract No. 846, exciv.uion $4520,30 and masonry $26413.20, also on London Contract Extras a retaining wall and sheet piling for protec tion of banks oil either side of bridge, $8640. . -^ .. ... 8. .. 1 1. .. 12. I5- 16. 12: I'orcnicii (if I)()n coiuni't No. 7O4, reports to charj^e l.i ndon cont'-ac N'o. N^ri, with joo l);itivls of iiiiK'nt shipped from Don contract to London, and credit siiiie to Don contract at $4 per barrel, also that of the hills of sup- plies ciiari^cd to Don contract $.S^6.20 should he charged to Plant and cred- ited lo ilu' coiitr.ii t. I'oRiiian ol !,. 11(1(111 (■ontra(t No. 846. reports to charge to I'lant .\ct count $14(10 of Mipplii's ciiarged to I. 'ndon. Rr(cive(l iioni llu'(' iriiorntion of the City of Toronto chc(|Ue for $1 2500. and lioni I.. Noike, I'.s.i.. cl e(iue for $("1237, 'I'. X'oigt $8030, City ofMon- tre;;! $37.^7.50. Credit Ci y of 'ioronto with shortage on shipment of stone $25, and r. \c)iglit .$6,75. (Debit (piarries for shortage.) iH'jiosiied all tbe cash on iiand in the bank less ci llection on chctjucs $6.25 I'a (1 t' e following hills on account of Ciray (^)ua"r/ for supplies $648, by clic'i'i.: No. 24 : Sandstone <^)uarry b\ che(|ue No. 25, $13 ; Red .Stone (^)uarry .$13, per c'le jue .No. 26. Re.'jived from Canada i'acific Railway chciiue for work at Don contract Xo. 7(14, an'd at London conlract No. 846, $67862.83. Depo^i cil the C. 1'. R. Company's cheipies in hank, less $16.40 for col- lection. Laid for material, i.\:c , on account of Don contract No. 764, per chciiue No jy, $75^3 (^3. and on accamt of Lond'Mi, per chetjue No. 28, $8580.60. |. S Howes diiw from bank to jiay men, jier checiuc No. 29, $77541.60. He re jDvt-; jiay iieiit nvn per pay sheets : $17048.50, Don contract No. 764 ; $17433.35 lor London contract No. 846; $16956.50 for Clray (^)uarry ; $14456.75 for Red Stone (^)uarry ; $11496.25 for Sandstone (^)uarry ; and $150.25 for uncl.ximed pay. Receiv'd from e.ich of the five foremen the $200 of cash advanced to them, also die ch(.(iue deposited with the City of Toronto on tender, $2400. Receivd from C. P. R. Company cheque for $8324, being the amount allowed iiy C. P. R. lor our bill of extras lor retaining wall, &c., at L.ondon. Write back the overcharge oi the extras of the Estimates Account to the I'Atras .Accoimt $316. 1 )i|io-it all the cash on hand in the bank, less $3.20, collection on cheques. rile following iiaymenis were made by cheques Nos. 30-35 : H. White, President, $300 : j S. Howes, Sec-Treasurer, $800 ; \V. J. Gray, Book Keepe', $6oo- all clinrgeaiile to Salary .Account, and the following chargeal)le to the various (piarries : jamjs Reith, foreman Red Stone Quarry. Thomas Brett, f> rem 111 Sand-t. ne (Juarry. and L. McDowall, foreman (Iray Quairy each $000. ,,...., MfcA^-t4r^'lAfa,JB II; i- f — 126 — Nov. 30. Inventories Real Estate. I'lstimated value $7000. Plant per inventory $10364.20 NoTK. You will now take off 11 hook-keeper's bulance sheet similar to that on the ^ Minute Book, page 80, and hand it to the Directors that they may know the profits of tlic business for the -loaHoii, and deehirt' any dividend they may think proper. They will engross it in their Minutes and return it to the l)ook-keeper with a memo in refer- ence to dividend, 4i'., on it, when he will proceed to carry out their desires. . " 30. According to resolntion of Directors a dividend of 10 7 on tlie paid up capital of the Company was paid to the siiareiiolders by checjues consecutive- 'y 3^'-43i numbered as per dividend book folio — $4100 The balance of profits $13844.51, being placed at the credit of Reserve Fund, and the books duly closed for the season, .Messrs. 1-. V, Neelands and Robinson Marshall were appointed Auditors, and requested to audit the books, and verify and sign the annual statement of Losses and (iains, and Resources and Liabilities for the general meeting of the shareholders on 20th December next. NoTK. The student will prepare a Book Keeper's Balance Sheet, also statement of Losses and Gain, and Resources and Liabilities, and place on them the certificates signed by the Auditors. See that your ( Iains and Los.se8, ahd Resources and Liabilities are correct. The Cash Book. The Cash Book following and belonging to this contracting business, is unique in presenting both Cash and Bank accounts together, so arranged that the balance in the bank is struck every cheque that is drawn. This style of Cash Book is suitable to companies that make all their payments by cheque on the bank; where all cash isdepositedin the bank to the company's credit, and payments are only made by cheque after the directors have passed resolutions ordering their payment. 'I'his is the practice in all well-ordered companies, hence this style of Cash Book is suitable for all styles of corporation and company work. On the Dr. side there are three money columns simply dividing the different receipts of cash. I'hese are only useful in this particular business to show at a glance the relative amounts of receipts of cash from the different sources. There is no posting of totals ex cept to 1 )r. of Cash. In many businesses the receipts of cash can be very nicely classi- fied so as to save much work in posting. For example in the steamboating books that follow this the cash receipts could be classified into passenger earnings and freight earnings, and the sum of each column posted directly to the credit of that account. A sundries column would be kept for all items thrtt ^rc to be posted separately. Other businesses might be cited to show the use of special columns in the Cash Book, but the foregoing will suffice here, — 127 - The credit side of the Cash Book has special foalurcs. Ihr first is that tlic money being /'w/y deposited in the bank the Cr. of cash aiul the Dr. of bank will he iiiiiril hence the first money column on the Cr. side would be bahinced with the Dr. side v( \hv Cash Hook. 'I'he difference would be the amount of cash on hand not (kiioitcd in the bank. In most companies where payments are made by che(iue a sma'l amount of cash is kept in the head ottice for making petty payments such as postagi', tiK nr.mis, . t( . When these accumulate for a week or a month (being paid out of the cash on hand in ihc head office in the meantime) a checiue is issued for the total of them .nnd ilcidsitid as (ash to the company's credit at the bank, instead of the cash actually paid mit for ilu>c things. The footings of this first money column would be posted to the Cr. of cish, and 'the Dr. of bank, if these ace junts were kept m the ledger besides keeping tluni in ihc rash liook. The second money column on the Cr. side is the real column of paymcni'.. In it arc entered all chequer, that are drawn against the company's account at tl e I ;,nk. ;;i.d m '.he third money column headed "Balance, " the ( hecp e is deducted or the dc|insit add' d to the former balance every time anything is done. The second coh:mn mntains ilie Cr. of bank. This would be posted to the Cr. sid;; of bank if the company s imnk .u count were kept in the ledger, as well as in the cash l)o.)k. In many businesses the second column could be divided into a number dI cohnnnM corresponding with different accounts in the ledger and still have the balance < nh nm kept as it is. Suppose we had made this column into three columns in this work, vi/. : (i) Don Contract, (2) London Contract, and (3) Sundries, all "Don" payments wou d post ti> Don Contract acconnt in one item and save time. Others could be done the s^me \\;iv. If no accounts were kept in the ledger with cash or bank, the balance of cash and the balance in bank could be entered in the trial balance on the Dr. side directly from \\w cash book. There is a small extra column on the credit side for the cheque number, a ver\ u^l ful record both for the book-keeper to save him missing any cheques in entering up .iiul fjr the auditor in checking over the vouchers with the various payments. • l ; ^FfTlTT a:|t Dp IH'.CJ Feb. Apri :> l(» \V. .1. (Iriiy ■.*.*) 10 •-'.-) II •-'.-I I'.'i •Ji» i;t May Nov. •J(i •-'(I •-'0 20 •JO •JO 10 12 I'J; 10 1 II ' •JO 30 •J4 40 •JO 45 50 :ttt (iO til (i-J (U •J4 .1. S. HoWI'H V. MoDowiill S. .). Soincrvillo \V. MiirriMnn • liuiieH Keitli 'I'lioiims Hii'tt \S . Morrison .1. S. MOWUN !•'. McDowiiII S. I. Soijierville L. ^■o^ke C. 1'. K. Kstimates Unclaiineil Fays Tuiidcr Deposit City of Toronto !-. Vorke T. \'oigt C'ity of Montreal ('. P. R. Kstimates il allies Reith Tiiomaa Brett F. McDowall M. Connoly \y. I. Mulock Tender I)c]ioHit ('. P. K. K^niiiiates — laS — CASH. Paid ( '. iiipany hJH certi- lied elii'<|iio 50 of Hii))Hcril)cd ntnck Paid on stock to make MO paid up Received payment for shipments during month Reua !M» ", of estimates for April Returned Returned marked che<|uei Received cheque for stores Rec'd rem. cash advanced Cho(|ue returned City of Toronto London Contract extras Total on contracts M sale of stone 1111 v^-. I. . • ' ContracU. .Salea of Stone. 16180 43 67892 82 8.')24 00 92367 25 2920 00 12500 00 6237 00 8030 00 3737 50 ■V- Total to Dr. of cash, foi. 2 33424 5(> Sui'lriti. .1000 (X) •JfiOO INI 25(NI IKl •J'ltNl IM) 2.')00 (N) KMNI ttU 3IINI (Ml 15 I 1.1 1 24 1 24 I 1 I 24 ! 28 mil 28 01 28 62 1 64; I i 1 ,63 20! 30 I »» 15 .SO 3;^ 33 33 Xi 3« 3« 36! 30 Alolttons Itank Kxpeiixe Kxpeiiso Tender Deposit J. Ruith (peracct.) Thos. Brett 1, v. MoDowall „ W.J. Mulock „ M. Connoly n Molsong Bank ti II Kxpenso l!)on Contract London ( 'ontract .% 26 ! :«) i 28 May i 1 59 Nov. 10 1 8 15 Dec. 26 9 29 9 28 II .i U 12 SI 12 :k ,J2 59 IB 1« 15 IH 18 16 18 16 18 16 28 16 29 16 26 10 70 Gray (Quarry Red Stone Quarry Sandstone (j.uarry J. S. Howes Molsons Bank , Expense (iray Quarry •Sandstone Quarry Red Stone Quarry MolaotK ^nk Expense ' Don Contract London' Contract J. 8. Howes M/L>lsons liank Kxpense Salaries Account Red Stone Quarry Sandstone Quarry Gray (Quarry Dividend Deposited Paid Jas. Miisson's sigiit ' draft, Chiirti'r V'ven, «f. Paid Warwick fi Sons for Htationery ' C. P. H., Don Contract Bridge No. 764 C. I*. R., London Bridge, No. 846 I City of Toronto j Advanceii to Koruman of Redstone (Quarry Advanced to Korenmn of Sandstone (^uiirry Advanced to Koreinan of Gray (Quarry Advanced to Forenuiii of Don Contract Advanced to Foreman of Lontlon Contract Deposited Coll. on L. Vorkc'N draft McRae & Co., OtUvwu, oe- ment, Wilson k Co., Toronto, sand. Bidden & Co. Poison Iron Works McRae cement Wallace Bros, sand, W. B. Simpson, timber, L. I'inkerton, repairs, Supplies, Redfern & Lepan T, I. Thompson „ R. P. Huliiart Bros The Sec. -Trciisiirer drew from Bank to pay men Deposited Collection on Cliciiucs Supplies 4 3 6 7 8 9 lU II 12 13 14 I.-) 16 17 '< 18 19 20 i 21 23 24 26 tCsnh Cr. and llBiik Dr. I.'KNN) 00 Deposited Coll. on C. P, Material R. Cilciiuis 10700 (M) i 2920 (N) 16180 43 46.")0 2."i .•W).")(>4 .'lO Che(|iieii. .'120 00 I. 'tit 20 2500 (N> 2(NKI 2(N) 00 2INI 00 2(! hoik; ;{! M.ilnnce. To pay men Deposited Coll. on C. V. R. Cheques H. White, President, J. .S. Howes, Trea.s., W. ,T. Gray, BookKeeper Jas. Reith, i'oreman Thos. Brett, F. MoDowall n Paitl SnarehoUIers per Diviilpnd Book per cheques, Nus. Cash Cr. Tolio z, Bank Dr. folio 6, Bank Cr. folio 6. 28 29 .30 31 32 33 .34 .35 36.4a 67862 S2 11724 00 (i 2.". 6 IS 00 23 («) 1:1 00 Mi 10 I 7">s:j !i.") I; 8.')80 (iO 77541 (10 3 20 .3(KI (K) 8IH) (HI 6(H) 00 8(M) 00 8(10 (K) 800 (M) 41(Kt 00 { l.'IIKMI (Kl 12(i.S0 INI rj.vi;t .so IIKI43 MO so 13 .so .Vlt.'l so .•.1»3 80 .VJI.'t so .")! 1 i;i .so isl.'f HO 1(143 so l.vi»;i so IS'JIi.'t 80 i:f2U2 .->.") 17042 ."».'» 178SO .*>.-> 17344 .35 17268 00 17041 00 l7(M(i 10 l6(iS4 !I5 16643 .V.I I6.-.07 15 16434 88 Kill-.',") (12 1!I2!I 31 L'llOO 74 2.".7.'".!l '.10 .-.:i-'(14 4!l .■|li-_VlS 24 ."i.'illlO 24 .".."..'i.sT 24 .-,.-,.-,7-1 24 i--':;i.;7 0(i i-j;!i-j(i (1(> ii.-,s;i(i 71 1 07 -•"ill 11 •-".1711 .-.1 1 1 i;!s .-,1 11 i:!.-i .•{| 4 U.S.-. 31 4o;i;i.-. 31 3!I7.35 31 3S!I35 31 ;tsi;i.-, 31 373;f5 31 3.i2;i5 31 »? .1.57542 (K) 124;KM> 69 11 '■** 130- C-A.3^T-A.r)J^ STOiTB OOa^F-A-ltnr. LTD. Time'^ook /'>>/• (iidtf Qtnin'if for the week endiny Ain-il I'th, 1*19.'. Fhkii M. McDdwaix, Foitiiiiun. I •> ;i 4 .'» (t NAMi:. H. Agnew II. Uell I'". Speers J. Stewart C.A Madden \V. Crawford do l>iv Will. McKenzif 0( ( UI'AIIpN Stonecutter ■A|S li\ tt II 1015'to la.i^iois 101014 15 01 11 ro 12 10 10 13 10 12 IO|IOI2,I2|IS 10,1010,10 lOjIO 1012 1012,10 10 lo'l2 10 1012 10 1312 12 12 12 10 The Time Book. riu' lime liook is kept by the foreman on each contraol. It is a small hook that ciiii he carried ahoiit ^asily in the pocket. 'The above is a weekly form ; some prefer a luontlily form. W'iwn ;h . weekly form is used there are generally two to each contract, so tiiat one may be .iwav at the head office of the company to he entered up, the other one heinj^ in the Iwndi of the foreman. The books will in such cases be returned alter nately. In refeience to the methods of taking time on large works, many systems are adopted, one good one is to give each man a number and a brass tag. A small oftice is arranged in ;' convenient place about or near the middle of the works; each man hands ih'his^ N iN,vo r>.^5 m*0 1 I i ll 8 8 s. J ce I i t>ft -■ - 8 s, 3 ;lL in c« ?! 8 8 ^8 6 »n in 0b »n tn' N 2--~b O 2>-'0.' »ina lo in in in m in in tn O o^ in o M \0 in (^ O- ^ >I W3 0<5 ►-»» 1^ NNNflNNNN 3 2 U ^ ^ I fe is »: t; "5 •« . u: •ox I - •>• i SI- >: 6 i 3 5 •c •£ u X 3 C 5 » c O ^' 3 . .e1? C O s c « ? 2 P o -r i* y /. J '^ 2 J- fg' oil 3 5 t c cs t: n ~ •r. " 15 ^ x: "O o rt r: . o ^ 1) - w C O w .,j-,- >,i<[ ■■ !■ ?!f I 132 Tl^e Ceii]eiclei Stone Grey Quarrij, for flif iiioiith of Ajiril, Itilhi, o -A 1 W 4 NAMK. H. Acjnew H. Bell F. Speers J. Stewart C.A Maflden W. Crawford (ieo. Dav Win.McKen/.ie .OrcUPAIION Stonecu'.ttr 1 >i .< 4 2 13 10' 10 10 10 10 10 K IOI2 12 10 10 14 12 10 io|i4 10 10 10 10 12 10 10 12 10 10 IQ K 10 .") I) lOill I 15 10 12 10 1212 lO 15 10 12 lojlO 14 15 12 10 lOjIO 12 12 12 10 io|io 10 10 10 10 10 12 10 12 IC 10 lo|l2 10 10 12 10 13 12 12 12 12 lOl I I I ' ' ' I I I I I I 12 l.S 14 !.■• Ki 17 IS lilLd-JI 'J-i •-';< 24 -i.") 10 10 12 lo'io|io' lO 10 12 10 10 10 ;o 1 2' 12 (o 12 12 12 14' 1 5 10 10 If 13 14 ic. 12 12 10 12 10 10 12 12 1 '5 15 'c 1( 10 10 12 IC U) II IC II ! I i i I The Office, Time and Pay Book. 12,12 12 11 o] ■ ' 10' 10 12 '°i 10 I 10 I0J12 12 10 lo'io I ' 12 12 10 I I ■ I 12 10 IC i J 13 'O 10 10 10 10 10 10 10 10 ,1, 12 12|12' 12 12 10 : 121010 10 10 :|0 10 1 10 I'l The t'orm of book above illustrated is tlic 101111 suitable lor tlic head office (jf any company that employs a numljer of hands, it is espeeialK ustlul lur ^wU as Railroad (Companies, Contracting Companies, Lumber ( 'oni[)anies. wlitre there aie various gangs of men employeci at different places or on tliffereiit worlds, and uijcre these men are paid regularly once in two weeks or once a month as is the usual rustom. It is the duty of each foreman of a work or gang of men to report weekly the time of all the men under his charge to the head office of the company. This is usually (baie bv havii g two weekly time books, such as is illustrated on page 130, for each foreman or time-keeper. 'I'he.se are used alternately by the person in charge of the time'-eeiiir.g, one being sent to the head ofilice each week. It is copied off into the ( )ftice Time lU.ok ami relurneil to the Time- keepe;. When the Time Hook for the last week of the month is copied into the Office Time Book and Fay Hook, all the time is m.ulj up on the page fir th.it one particular contract, the c. '4 ■JS J'.I.SII I ! lo' 8 8' lo lO 10 12 12 10 10 lO lO lO 10 lO 10 lO 10 10 lO 12 I J IJ ID Toial ;{| .lays ur h r I I " ■29 o 27 () 2S 5 J2S u 2S 2 Touil niea^ r- inelU 27 (), 2S 5' 27 9 25 ;2S 25 25 25 25 25 25 ear:i'ys 72.50 'mis as arc not paid anil recci])tcd on tlie I'ay Sheets, entered in the I'li'laim jd I'avs lolnmn. 'i'iie Pay Sheet illusiiatcd on page \t,\ c^rrcsiionds with the first and last parts of tlu' iitli-e Time l!(i.)k, and the " lia'ame jvuablc " cokimn is put on the right hand side 111 l.e next to the sia CL O <-f *; 3 re n _ u_, o re w 3 ^ J^ -• H^ o "^ ^ H 3 Q Oq M re **i -^ re " =- ^ "" < g^ « 5 N- 8 = p 5 3 a ?? g- 2 0. 8 « s ft 3 S C S 3 ft 3 - CL 8 5^°-- ? W 3- C 3 rt /• 3 o P <^ re ft r*. O- =r CR CR 3" i-J 'J 3^ p re E- 3 ui o ~ ° ►*> O 3 p* '-'■ ft ft f* ii Sop w .^ 3 3 :ri 0» " t/j C V- O sr cs. 3 O. re re ■- 3- S; o re 3 - 5 ^ re 5»5 P ft s "^ =i 3- ft p r» cr 3 ?■ c 3 2. >< re o' 3 "2 ft re 3 ft 2. 113 3 „. ■-* o ?- rr — ft J' 3 ^ ^ 3- S ■£. 3" ft re re re o Oft 5 o P ^ r^ ^ " o 2 % 3 8 S- E. -: ^ r^ 9 cr CL g £. CL ^ ^ P d 3 P " ^ 5 3 S O r» =.=;/• i r^ /■ X i:; 3- 3 "C O -^ _J 3 ^ —I O ~ 3 ~1 r^ ?r 3- p „ 3 o S =? 2 3 o ::. c B ^ 3 cr; ?^ 9 ^ S ft p' ^ 3 'T C •2 2- :? ■-^ 5; ft cr ft s: O ft o — • N r-. -1 ^ X -'■ — 134 — w O M CO CA B. O CA > H- . . ► , ..3 > H K g ^ ^ ^ ^ ^ 1 II s "^ r a!- 50 < c g re SJ- > 2 n i r; f 1 > 1 i 1 1 s 8 i Cement. 1 • s SAND. 320 00 Timber for con- si ruct'n. 1* ■5 Tim. &i L. used as plant I o W ! 3 : $r^*s tj ,T - - ~ I .* I r»: Iff n t? ^-^ *^ ^ S3 0) t; r J3 — »3S "^ steamboat Books. It is proposed in this connection to outline a method of keeping the books for a steamboat company and use the transactions both as an exercise in joint stock company work, and an example of how the books are kept usually on board of the boat. The offi- cer on the boat whose duty is to do the business and keep the books is called the "purser." A set of books will be kept on board of each boat and the purser on each boa* will render a statement to the secretary of the n mpany at the end of each trip. These statements will be journalized each trip. They should be accompanied by proper vouch- ers for all payments. The statements of the steamer Carmona for tri])s Nos. i and 2 are appended as also the forms of principal books kept on board the steamers. The com- pany's cash book may be kept as outlined on page 1 28-129 '" connection with the Canada Stone Company. Time Iwoks and pay sheets such as formerly illustrated in connection with the Can- ada Stone Company would be kept on each ship. The pay sheet, duly signed by all the hands that were paid, should properly accompany every trip statement as a voucher for the payments. I'he freight book would show details of freight earnings and the passen- ger bo jk would show details of passenger tratili:. These are illustrated after the Memo. of Transactions. Memo, of Transactions. John' Simpson, John Harrison, and John Corbet are joint equal owners of the steamer Cambria, valued at $30,000, fitted out and in good order ; and Henry Smith, W. Tate Robertson, W. Rough and 'I'homas Maitland are joint eijual owners of the Carmona, valued at $40,000 fully e(}uipped and fitted cut. They apply to the (lOvernorCieneral in Council for letters patent incorporating them as the deorgian Ray Transit Company, ca- pital stock $100,000, divided into one thousand shares of $100 each, and the letters patent are duly received Feb. 1, 1892. Feb. I. The owners of the above steamers l)ci;ig each interested in a steamer to the amount of $10,000, subscribe lor 100 shares of stock payable in his share in the ship, and a bill of sale is duly executed for each vessel to the company and the 100 shares issued fully paid up to each shareholder. ' ' " NoiK. (i) Write out a prosneclus of the company, seltini; forth the present state of 'oiganization of the company, giving full |iarticiilars about lake trade. It is proposed to issue the remaining $30,000 stock at par payable 25 ;^ with application and the remainder in , monthly ctU* of 25%, The boats to run from Owen Sound to Port Arthur in connection with I lie C P. K. It is expected that the Dominion (lovemment will grant a subsidy for mail service. (2) Write out Stock P^iok and sign shareholders' names; keep room for more. (3) Write out Share Register. leaving room for s.coo shares. (4) Write out a certificate of stock such as would be given to the shareholders for the fully paid up .stock. (5) Enter up in the Journal the transactions so far. As the shares of stock this far are to lie issued fully paid up there will nr be anything gained by entering thi shareholders' accounts in the gen- eral ledger, therefor ■ ..' the followin;; entries arc made it will shorten the work. I^fi - Feb. »5- Mar. Apr Apr. 1 6. Apr. 20. (1) steamer Cambria, Dr. $:iO,(»(Mt, Carmoiia, .. $4(),(HK>, To Capital Stock, $70,0(K». This entry is to lie posted in the (Ic-neriil Ledger and an account opened with each stoamer for its cost. Paid up Capital, Dr. $7(>,(MHt, To Jno. Simpson, $1(),,(KH», M Jno. Corbet, lO.OtH), ,. Henry Smith, 10.(K)(», „ W. Tate Roberison, H».0()0, ,. W. Kougli, 10,0,. si id M Passenger acut. I,(>'.'U Carmona Freight acct. Dr. $180.73 Wages acct. Ur. •21«(.(K) II Harbor dues, etc. acct. &2.')0 ti CoiiimiHsions acct. l'J4.'jr) II Kleviiting acct. '2(W.7r> May 23. n (i rain shortage* Overplus 2.'i5 Cash iicct. (i,»»0.(K) To Purser Steamer Carmona $71oO..')0 These entries leave the Purser responsible for and rhiirged with the balance of cash in his hands and the uncolkctcd freight. Nii cnuv is nuide for the $800 in the statement, as he has been already debited with it. The suuie will be true of the bal- ances of freight and cash in succeeding trip stateuients. Deposited in bank ail cash on hanil. Delivered to Steamer Carmcna 120 tons ccal (" $3, provisions $200,and ships' stores $375. NoTp. Dr. Carmona .Stores, and t'r. Ships' .Stores for the ^'M') delivered, TTTT f — m8 — May 24. Steamer Cambria has returned, and I'urscr M.iitland reports, per Trip Statement No. i ; Freight enrnings, $5, coo ; pasfcnger earnings, $1,500. I'ayments : Advance freight, $150.50 ; wagis, $u/) ; iiarlior dues and tolls, $45 ; commissions $110 ; elevating $250 ; grain sliortage $2. Paid Treasurer $5,500. Nc.TK. Credit Steamer ritiiiliiia'a ficiglit and passer ger iicitf. \\ itli (ainiiiga, and charge Steamer Cainbria'n aecounts \\ ith all paynienlH. Deposited in hank ail the cash on hand. Delivered to Steamer Canihria 100 tons coal. $,?oo : pn^visioiis $175 ; and ships' stores, $300. May 29. Steamer Carmona returned from trip No. 2, and Purser Matthews ren- ders Trip Statement No. 2, as follows : Freight earnings, $4,625.40 ; passen- ger earnings, $1,360.40. Received for overplus of grain. $5.70. Payments ; Advance freight, $485.60 ; wages, $235.50: harhor (hits and tolls, $74.20 ; fn.iiL lission, $96.40 ; elevating, $220.30. Paid casli lo Treasurer, $5,000. Note. Credit gi'ain .slioitiigu and oveiplus acct. wiili li.e iti 111 of .•:•."). 7". Deposited all cash on hand in the hank. May 30. Paid accounts presented by Secretary for provisions, jicr (heiiue $380.50. Delivered to Steamer Cnrmona, coal — 100 tens (<> $3; ])rovisions, $260. June 3. Steamer Cambria returns from her second trip, and Purser Miiitland re- ports per Trip Statement No. 2, the followirg : IreiLlu earnings, $4240.25 ; passenger earnings, $1,120 ; overplus of grain, $4.75. Payments: Advance freight, $425.60; wages, $;;o.3o : harbor dues, $50.60 ; commissions, $85 ; elevating, $170.30. Paid to Tr-'asarjr $4,600. Deposited all cash on hand in bank. June 4, Delivered to Steamer Cambria 100 tons coal Qi $3, and | iGvisions $200. Note. It i^ needless to repeat these, trip reports uiitil we g( t i

t. I ;n knowledge the receipt of Six Thousand 'I'hree Hundred Dollars mentioned. lIi..\R\ Smith, Treasurer. Owen Sound, May 22, 1892. Steamer "Carmona." Purmrs Statement for Trip No. ..'. Ou-oi Sound to Port Ar'Jin)- and retuvn, Com.)nencin(j M ((nd endiii;/ .Udjj -.'', 1^').\ 'I'o cash on hand from last trip .... 379 ' 5 II Uncollected frt. n h .... 19025 M Freight as per Fri. Book folio. . 4625 40 II Passengers as per Pass'ger Hook 1,^6040 II Overplus of grain 570 Owen Sound, May 29, 1892. $ '')5f)i 00 f{y advan- • f,t.i)d.per Fr;. I'ook folio 485 60 II \\'a",ji per l';!y .Saeet 235 50 M H irbor ilues and canal tolls ... 74 -o II C"o;;!iiiijsiun on tickets 9640 11 I'.;ie ■ i^;i c 220 30 II I'aid riei.>,;re' 500000 M L'nc.;ll ■ 't.'d in. p.T ~tat' nient. . '23000 II Balance ^. e...,!; ^.1 !..i..U ; 24900 W . 11. .\1.\ I iii.us, Purser. $ 656 1 00 I certify that I have examined the steamer's hooks for trip Xo. 2. and compared tlic vouchers produced for the payments, and find them correct, and the ahove trip statement also correct, I acknowledge the receipt of $5000 n eiitiaud as paitl to me. 11 IN in S\iirii. Treastirer. Owen Sound, May 29, 1892, — 141 2 I ()0n ! 225 630000 19025 379I25 77 jc 00 (iiid 48560 235 5" 74 20 96 40 220 _^o 000 00 230 00 2 1 9 00 1561 00 I'd tlic tciiicnt ircr, i« « C^ Ss B C2? s-i e^ ^ ^r ^ <^ oj ^ 2» CD B =1' >^ "< S CO ^ 1 <4-l s. ^ t-> ^5 .CJ be ~ 1^- *S 0'^ U^ R ^ ««* •» ^ ae .a, ^ ^ fi^ ^ ^ b .« I ■.t I T^ O Oj j2 .<-• u^ <-• 5 .* «» ZS ° i is 0.0 •A u u c (A OS c O c < z H u §65 jI i ^- ffl-:>--ffi r^ It tvf. ^j S a B w - S J « S _ tt £s^ a - s o ^ >< = m O «'-'< S 2 c.tS S 2 CO .!^ a a s Jg tf £ 4 f^ lad X M ud o a 0) O 3 cS a; o u Cu X in * o ^ i a B >. ^ — .i^ *», A '3 "- "ft- . » A u c^ ^, c -Z ■■::■ \j ^ ■~ 3 -* ir: o rr: J-^ _ v3 ^J /^ ^ — ^ .=- -_, -o ? jJ CO 3 X" 3 H *- '- ~ ^ ^ -— - jr3 s-tf i S = .^ ■^ ^ -^ X. >- -- .'-' "3 i: 'B = 5 - c «J ~ o c ♦" J:; r: _=: ^ .s c ■-» ~ = ,:£ :s c: -n i5 S > ^1 -3 -a ^- ^ - u C. ;: ■r "J - >, X t; O '73 5J 'A ^ *^. C r^ ^^ n c ^ "tJ •— I- V '- I- c 3 o "J — u- i-T O 'J "Ho ,0 g M C tS o 2 .S ■r: '/) « .1^ _ — '-'■" ■J C _ 2 •yi C ,- . = s - - 2 "- 5 ,t« t/i ^ -r '3 :::. -a rt ":i .u O C >— » 4) ^ ■£ *j o 2; ,rt 3 4: o •" ■^ •£ 'E U ^ c •/: rt -o -^ p J T .^ -3 • = 1> pi^ § 3 so 'J ■5 ^ -^ S ;/j rt n w ■/: SO _ • - ^ -J JJ — ^ y o _ ^ >. rt C ^ — 5 3 3 CJ ~ o « u. c rt C — 'J rt j: u 'J r^ - :j — rt rt . -' o ? -?: ^ ii > y — •- fcC - o ^ 3 O 3 O X 3 :* ,■: 'J - "-i .=- ~ "3 3 rt r- '^ — 3 tn r» ?■ s> ??• _, o rt o =? 2f o 3 o "*> C i O Q. O =? 2 re „ S- d. ^ 3- 3- S- 9, o =• W Ji n g ' ^' . ft *a ^ CL 3^ _ P "< ^ OQ O =■ -• O 11 3 CL 3 C 3 _ r^ '» "^ "^ "■ ?■ CL o ni - H ^- o a: -A. a ^f -ire I—* -■ >^ ^ ■ 05 5. i-< 1-1 5' - 1 '^ (^ p :/: »^. <" 3 „ w P <=^ « p C^ =^ 3 « 3-0 3 0- ,-. 3 "^ O 3 *-♦ — P -• P ^ (A 3 EH r^ 3" crq ft) n ^3 — cr 2. o- jj o *; o r* ft O ^ 3- a ?r S, >3 Ino. Frost \V. A. McLean & Wife Henr}' Kennedy M. Scully John Smith Dennis Mrown A. McC'ormack W. Cameron A. E. Jones Mi.ss J. Young Remainder of list NAME. % 3 C/3 C 3 O. > > H as Sault Ste. Marie Port Arthur II Sault Ste. Marie Port Arthur II II II Sault Ste. Marie M H H •y. o.CiriCi'::^'ZC^CiCio. Cabin or deck vo ^ <-n 4- 0> 0C4- Berth No. ►"MMMMlHMt/lNM m00000n3^0m oooooooSoo OOOOOOOoOO FARE. — c/1 Ln tg i-i .^ M ig wCntnOOOt-n OOn tnOOOOOO 00 COM.ON Tickets. w 3 n w 5' E.J. E.J. H. D. M s > % ^ ;« CD 2 CD S i^ Oo r *§ I' !3d CD Cfq 2 ~ V.M 2* 2 CO CD CO s' i CD ^ S^ M3 o B <73 CO O o PQ cr> e« 00 .3. ^ s c ^ 10 1/1 m n l>. Cv «> iri 1^ fl w fO IT) !>. r^ W- 10 O O Ul 10 IT) t>. O IT) N !>. N O ^ M 00 "" vO o o o o o i) u — /i c •—1-3.2 ., •! "O T. y — ■'■ ^ '^i 2 S -3 .rt O o 5C "2 rj > ^ ," -^ x: rt **. ^ 3- O r- '73 S- >0 N N M N N M N N rt •o N O W-) o O I-" O 00^0 O O ri 10 11 10 N N HI N N 10 O M -^^^^ ■ f/3 rt „ ^ r-" Ma -::' tcc^ ^M V ■ Treas. of rcight per 1 assengers j) p- Jh S- lb J fOti N 1 SI o 3 c e -I 3 •5 C o ^ •J o 3 rs ^ ;j n ?" "w c -' ■^ , — ^ a. •r. 'J • — »-. ■a r-j 3 D (A "^ J 3 ^ '^ 'fi ri ^ w* U ? H S ■J t; £ -^ 3 ;i r -3 r- ^ -*- — »44 — MISCELLANEOUS PRACTICAL INFORMATION l\*i;i-ATIVK TO Joint stock Company Wor' 111 tilt" fori-j,'()iii},' pa^rs we liavc niveii tlie laws regarding the formation and manage- ment 1)1' ( 'piiipinios, anil several e\ain[)les of how the books may be kept, In the follow- ing; paj^Ls wf will present lonsiderable information of practical nature relating to Joint Stock Cuinpaiiy work that could not well be introduced with the examples heretofore ^'ivin. riiey will i)e better understood when giren separately than following the examples tiial lKi\e ijcen worked out. "Limited" in a Company Name. rill' appearance of tlie word '■ I. innted " in the name of an Incorporated Company indicates that it is a IJinitcd l.ialnlity Company. 'I'he individual shareholder is not per sonalK liable for the paym'-nt of more money than he subscribed for when he took shares. I or ivampie. \\ . .\. bishop subscribes for five shares of $100 each. He pays a lust lall ol JO , , a second call of -.o , and a third call of 20 7- -in all $300. He is still iiahle to |iay to tiic (Company or iis aj^ents or assigns $200. the Company went into ii(juiilali(in the creditors might ('emand the payment of th» ional $200 that he has not paid uji on his shares to help meet the liabilities of the Lv,..^ern. If the share- holder has paid u|) all he signed for. he cannot be called on by the creditors for any more, no matter what the liabilities of the Company are. In a partnership it is differ- ent ilu p.^rtnur is liable to the extent of \\\s prh'ate property for the debts of the firm in case the linn's [)r()|ierty is insutticienl. The presence of the word " Limited " in the name of a Company is intended as a warning to every person who gives credit to the Company not to give credit beyond what they are willing to risk on the strength of the subscribed capital of the Company. Publishing the Word "Limited" in the Company's Name. it is necessary according to the joint Stock Company legislation that every Com. pany whose liability is thus li'.r.itcu, shall always keep the word printed or written in the ( 'oivi, •'■.iv's name : — 1 si. ( )n a sign at the Head Office of the Company — 2n(l. On all circulars, advertisements, announcements, &:c., regarding the bu.siness of the lirm-- 3rd. The Company's name, when signed to any letter, contract, document, &c., shall contain it. It is not necessary to write the full word "Limited." It may be, and usually is ab- breviated to " Ltd." Any Director or otiticer neglecting to use the word in the corporate, name or any shareholder who knowingly permits it to be left out where it should be inser- ted, is not only liable to a fine, but is personally liable for the firm's debts ifthe creditor gave credit to the Company not knowing that it was a Limited Liability Company, and having reason to believe by its absence in the corporate name as used by the officers without the word " Limited," indicated a Full I.iahility Company like an ordinary paitnerthip. -•MS — Double Liability. . lii The Hanking business of Canada is done (.'iitirrly !>> ( 'orporatt- C'omiianics llu\l issue their own l)ank notes under the control of the Retcivcr (Icncrai ot Canad.i .mil in coin- l)liancc with the Ha|ik Act of 1890. 'I'herc are at present only 36 Har.king Cnnipimiis incorporated in Canada, and their charters run for twenty years from July 1, i.S()i. No other company, or corporation, or partnership, or inJivi(hial, may use the words " IJank," "Banker," " Banking Company," " Uankinn Asmm ialiou, ' " hanki.in I louse." \'c.. ex- cept these 36 Hanks, or such others as may be afterwards inrorpoiiicd aiul (()ni|)ly wuh the re(iuirements of the Hank Art. In accordance with the old principle that to whom uun h is nivcu luut h will aU(. la: re(|uired from them, so, from the Hanking Companies a greater liahility is e\arteersons who ImM the JMiik notes instead of gold coin, and of those who deposit their money and entrust tleir business with the Danks, the sharehoMers '\nhM\V.s an- iiii/>/tJor twice t/iv amciiiit n/ t/nir sliairs of stock. For example, James Hrown, M.D., subscribes for ten shares of Inuleri' liaiik Stock of $100 each — in all $1000. He is liable to pay up the $1000 subscribed I'nr .is called up by the Directors of the bank. If the liank at any tune (•ea^e(l mak- ing payments and was thrown into li(iuidation, Mr. brown would be called on tnr .mother $1000 if he had already paid up his stock. And sup|)ose he hail only p.iid .ji()oo at the call of the Directors, he would be called on for $400 more on that, and be called on by the li(iuiditors for the creditors to pay $1000. Ttiis < all for |)ayruent by the lii|ui(lators would be payable at the rate of 20 % of the amount every thirty days until it uas \y,\\i.\ up in full. Closed and Open Companies. A Closed, or Close Corporation, is one in which all the aulhori/;cil capital stock has been taken up, and whose by-laws prevent the stock from being sold or transferred. In case any person desired to sell Out, the other shareholders reserve the right to buy up the stock. In other words, a Closed Com|)any is one that will not allow its stork to be transferred, and that will not sell any new stock, or allow a new shareholder to enter the concern. An Open Company or Corporation is one in which a ])orson not now a shareholder, may obtain shares, either by transfer from some person now holding stock, or by buying them direct from the Company. Stock Ledgers. In a Company where the Capital Stock is divided among a few shareholders, and where the same shareholders continue in the concern from year to year, a Stock Ledger is of comparatively little moment as to its arrangement : but where the Sto( k < lumges hands frequently, or where there are hundreds of shareholders, very much will be gained by having a convenient form — one -that will save labor as well as (jne that will give ac- iff — 146 — • Onteirio I^cople's ©eilt STOCK LEDGER AND Names ef S!i.Trehui I'ost Office V .9 1 3 — ^ PR. •0 . < CR. CR. CR. L_ CR. NO X a 0, 1 ^ 1 Z< 6 '■0 u. a: (J 1st Call n jnd Call 6 I u 3nl call 4th call ] John 'rolinio Kiiicui'dino 1 1 10 1 $2(MI 1^«.50 0(> 16 Jl.-)0 00 34 150 00 1 3« (150 00 •2 Heiirj' ( llii/diiouk (.)rono '4 100 1 2(M)(» .S.-)(MI (M)l»l r>oo 00 .34 500 00 52 5(H) (XJ 3 R. J. l»(.ylo Owen .Sound 5! 20 (> . 40<) i;{ KM) OO'lti 100 00 40 100 00 60 100 00 4 E. II. Ililboni Toronto li 1.5 f) ;iO() 3 7") 00 1() 75 00 3(i 7- 00 52 75 00 5 JeSHC 'I'liiU Osliawa (i 10 l.W (t 21K) 3 .">0 00 775 0(» Hi .50 m 35 50 00,93 50 110 %-^\m !j77r) 00 $775 00 *775 (JO :#' ^^' accuralo ivsr.Its in an uiKlcisianJable form. Thcforegoiiig form of Stock I -cdgcr an(i Div- idend iiook <()nil)ineil was suggested by the author for a Company of about 600 share- holders. It has many advantages, among which are the following : — (i) The Stock can easily he examined. .\t a glance the state of affairs can be .seen. (2) ii is simple, so that any i)erson can understand it: and trace out his own shares easily, as well as his dividends, etc. , (3) It saves lime of the book-keeper, as it is always a standing trial balance of the Stock pan of the books as to the Dr. sitle, and in many cases a^s to both sides. (4) Tiansfcrs are easily made by simply ruling outthe shares transferred and enter- ing them up at the k2W(\ in red, so that they will not be added twice. (5) The dividend is made out witiiout even re-writing the names of the shareholders. (6) .\ larne number of Leilger accounts are exhibited in a very small compass. It will lie noticed there are only six dividends i)rovided for.- VV'heti these are full it will be time lV)r the wiiole Ledger to be transferred to p.^'ge.ti- further on in the same l)ook. — 147 — Meiniifeictuiririg: Co. Ltd. DIVIDEND REGISTER. Slock Remarks. I I)iv. I II Div. Ill Div. IV !)iv. ii V Div. . VIDiv, 9 o a I A E B j B, «200«1« payment of 4th call' extended 40 days. collect 4th call or cancel slock I ■mm 40() 300 •200 KM) 32 •-»4 10 31(M):248 (X) 00 (HI CK) 00 (Nl i a A. 3 " 'n • c a a* c < I ^ I 1^ 51 .*2(K»«16 (H>.«'2(KI'ii;l($ (H) ! •iOOOjIOO 00 2(H)OI(iO (HJ i ' 400 32 (X) 400 3(K) 2(X) 32 001 I 24 (H)i 16 (K)| 31(Hl'24« (HI31(KI248 (HI 31(Xl'248 (HI 400 300 200 3I(KI 40 00 30 0(J 20 00 310 00 *i o t ' ; •5 5 Dividend Remarks. The number of transfers, cancellations, ^:c., will necessitate this. After the Stock ac- counts are ail transferred, they will be in c/cur condition to go on for another periixl of time. In all such Stock Ledgers the Dr. side of the l-edger would consist of the ,.ock al. lotted by the Directors and subscri!>ed for by the 'api)licants. This can be kept conveni- ently in one column, and this column should always add up to the same ainount a- the subscribed stock. The stock that is transferred, if put down in the ordinary wa\, would he counted again and again as often as transferred, unless the precaution is taken to en- ter it in red ink, so that it may not be atlded a second time. The credits of the stock accounts consist of all payments received on slock, wliether in cash or other commodities, therefore tlie Cr. side would contain and add up to ttic entire paid up stock. In this l-edger there is jirovision made for ybwr calls on shares. The Cr. side of the Ledger is the sum of the four Cr. columns of calls. 'i"he Dr. and Cr. sides may be left added permanently, the Dr. side always, and the C!r. side as far as any one call has been fully paid up. — 148 Q =r=r: a'H a o. o 7' =r: s o fSSi— . •-' '^ ^ :z :y '^' ^ ■ zr c ■~ ^ r. n "^ - p O (/I X -( n- j:^ ' ,-f IT. oq o ^ U2 y ■^ =. 2. ^ ■.'■ s-o -^=. ^ 3; CI- c c rr- O D- y yOo^oCp'^- re 2 c ?? 6 X „ rr ' 3 3 E. . ii -'i ^- -.- 2 ^ ^' 2 o. 3 ij^-a =;. 3- ■>£ ■ 'S r^ 3 -J y. 3 — — y r- 3 O - O. 3 —1 < o 1:1. fc 3 f^ S- o B § O 3 r-r _ y ^ C O ^. = 3 :: 2 c- c- aq n. 3 ^- 3 ".^ 3 Crq ■t/*; c o 3 C/"-' OS 3 r, ° S s C X, r- O (Ti ~» ^ n O 3- -, O fi, rt o - " S ^3^ f^ P- O 3 — 3- o _ 3. ~> r^ 2 =^ ri - TT O ' ^ aq "h — c , o -^ Pi p- j; c - "^ c '" oi c — r? 2. 3 - • one ^ Q 3 ^ p- _ _; 3- o ^i.'a - O 3 Ji 3 I". ., S c c ■t«-' -^ "X r: ^ O TD 5i cr=i '^ 3 "> 3 2 ? ■S 2 = - r- '-■— r U5 < c -r - < w § ^ ~.- _ -. 3- 3 ^- ^ EL ^ b ?; d-v; - ?■ £ ■4^ Ss:ro o ^ O fs ;:r- 3- 3 w «; rt! "O "■ 3' V. •^ nr— ~ >» — • c o S n. r- a ft 3" D. O »^ S — — — f^ 3" O 2 — „ — : „ — n C — " crq 3 3 2 5 -VO 3 H rr :3' -5 'c 3- H M Ln Ln M K) S^ p cr 4. 4^ Oj " 1^ CO 00 OC ig 00 O -t' H te D3 H W H O '^ '< O "-< o O O 3" ^ JJ w „ O , ui p en o q 000 M 4^ ! ^ Ln 4^ ? QD ao I d ^^ 5. 3 3 3. D- O O O ii S- 3 C = — ?r ^ o ft 5-„9* =^ 3 ^ ft O so c ?» (/) Q S 9e c ft s '-'■. 3 ri w O 3- - 5' — ~ ^- -^ X| 3" C C CL ^ ^ ^i- 3 ^ - 0) m (A 01 PI tn 3 O- CC — 149 — The Stock Account. . In Joint Stock Company work this account is used in several ways, varying ac- cording to the conditions and the methods of business, the record required by the man- agement and tlie caprice of the book-keci)er. In the foregeing example of the Creamery Compai.y it shows the amount of stock subscribed for, as it is credited for all shares al- lotted at the par value. If any sliares are cancelled for non-payment of calls or any other cause, the Capital Stock Account would be debited and the Shareholder credited for the par value of the share or shares. The Stockholder's Account is then closed inio I^oss and Gain for the amount he has ])aid up. A second method in dealing with this account is to make it show the amount of the unallotted stock that is held in reserve to be placed on the market at a future time. First an entry is made, such as — Capital Stock Dr. $5000 I'o franchise Account $5000 This $5000 is supposed to be the full amount of the authorized capital. Tnen the entry — Shareholder Dr. $500 To Capital Stock $500 shows the allotment of shares, and the difference be'^ween the sides shows the amount of the unallotted stock — the Franchise Account showing the authorized capital— then the payment of calls are credited to the individual shareholder as before. A third method is to ignore the subscription entirely in the Ceneral Ledger, and keep no Shareholder's Capital Account in it, but keep them in a Stock Ledger, and keep Capital Stock Account to show only tiie /'aid Up capital. Instead of making the share- holder Cr. f >r his payments, such an entry as this is made — Cash Dr. $50 To Capital Stock $50. The Cr. of this will show the entire cash or working capital only. The ownership of the shares in this Capital would be determined by the Stock Ledger, which is sometimes kept by single entry. The liability of the shareholder on acccount of unpaid stock would be determined from the Stock S'^bscription Hook and the Stock Ledger. This is not con- sidered a commendable plan, esi)ecial'y when stock is to be paid up in instalments. A fourth method is to call the account Net Capital instead of Capital Stock. It is credited with the [)ayments on account of Capital just as in the third method, |>ut at the end of the financial year the Loss and (lain Account is closed into it as into a single pro- prietor's Capital .Vccount. If there has been a profit over the dividend this account will be credited with the suriilus, and will show a sum greater than that actually paid up by the shareholders. If there has been a loss the capital will be impaired, and the balance of this account after Loss and (Iain Account has been closed into it, will show the actual working capital remaining. The balance will therefore be ecjual to the Share Capital -h the balance of profit, or the Share Capital - the amount of the impairment. — 150 I Treasury Stock. This is a title given to Stock that belongs to the Company. It may be any one of four kinds : — (i) Stock that has never been subscribed for or sold, hence it never hi^s left the Company. It may be sold any time the Company desires, if tliey can find a purchaser. (2) It may consist of shares once subscribed for and allotted and partly paid up, but cancelled and taken in by the Company for non-payment of calls. (3) Shares held at some time by stockholders, that have been either bought back because the Company wanted Treasury Stock, or because the owner wanted to sell them back to the Company. (4) Stock held by the Corporators either in trust or otherwise representing sonic property of a very fictitious or speculative character sold by them to the Company. The holders return the stock to the Company to be sold tc produce working or cash capital. Such returned stock, whether by purchase or donation, is called Treasury Stock. The style of book-keeping and entries tliat produce an account of this kind are as follows : The stock we might assume is all Treasury Stock until subscribed for. Let us use the term Treasury Stock in place of the term Capital Stock that we have been using, then make an entry first of all for the entire authorized capital — Treasury Stock Dr. , To Franchise Account * "' for the full amount of authorized capital this brings it all into the Ledger. As the Treasury Stock Account on Cr. side shows ihc aiiu)unt subscribed, and the IJr. side the total authorized capital, therefore the cliffercMKc between the sides will be the unsold or Treasury Stock. There is no necessity for calling the account credited with the entiie authorized capital, Franchise Account, though this is as good a title as any. It might be called Capital Account, or Authorized (Capital Account, or simply Capital Stock Ac- count. There is a question as to wh'jther then: is any necessity for opening an account with Treasury Stock, as it really has no value to tl-.c Company as an asset, until sold. The Par Value of Stock. The I'ar \'alue or face value is the amount of the share as issued by the Company in compliance with its charter. The i)ar value of shares in the majority of large corpora- tidnH, such as Banks, Rail Roads, Telegraph Clompanies, iV'C, is $100 per share— occa- sionally shares are $200. In Loan Companies the shares are principally $50. In Huild- Societies some are $100, and more are $200 shares, while in Mercantile and Manu- facturing Companies the shares range from $50 upwards to $eoo and $1000. The Intrinsic Value of Stock. The Intrinsic Value is the real value of the shire when it is considered as regards the resources and liabilities of the Company to which it belongs, (i) In a newly formed — 151 — Company where tlie share is $ioo, and only the first call of lo % [jaid on it, its intrinsic value is $10. If it is all paid up its value is $ioo. (2) If the Company has been in op- eration some time, and the shares $100 each, paid up ; if the Company has a paid up capital of $.10000 and has made profits, ;ind has $10000 of such profits in Reserve Fund, the stock is really worth its face, and one quarter more, because the Reserve Fund is one quarter of the capital. The intrinsic value then is $125 per share. (3) If on the other hi, '^ the losses have bet.-n great, the cajjital has been impaired to the extent of $16000, then the shares have really depreciated in value 40 , , and a share in the capital is worth only $60. (4) If there has been neither a deiireciation nor an appreciation of the assets from their first value, the stock's par value would be its intrinsic value. The Intrinsic Value of Watered Stock. In case of " Watered " Stock, it is like anything else that is " watered,'* it becomes "too thin," metaphorically speaking, and is not worth its face. Suppose the Company above mentioned, with a paid up capital of $40000, and a Reserve Fund of $10000, in- crease its stock to $100000, and issues fully ])aid up certificates to the shareholders for the new stock of $60000, they i)aying nothing into the Company, the reserve being used as a payment on stock. The total net assets of the Company are only $50000 to repre- sent $100000 of stock, therefor.: $100 shares in the Company after the stock has been "watered,'' are only intrinsically worth $50. The Market Value of Stock. The MarkcL N'aluc of Stock is the price it really sells for. 'I'his price may be above or below par. There .ire several circinnstances that may help to regulate the price paid for .shares. (i) and prominent among the items that go to fix the market value of shares is the intrinsic value of the shares discussed in the foregoing item. (2) The rate of dividend, and the regularity or irregularity of such rate. If a good or moderate rate is ])aid regularly, the stock becomes a desirable investment. (3) The current rate of interest if lower thm the rate of regular dividend, will make the shares sell at a [ueniiuni, while on the other hand if the current rate of interest is higher than the rate of di\idend, the shares will ha\e a tendency to sell below the intrinsic value. (4) If the Company |)i)sscsses some valuable |)rivilcge or franchise that is likely to give special advantages and larger profits in the future, the stock will have iin upward tendency. (5) If the bu-tvvjss of the Company is such as is likely to be permanent, and will likely pay well for a l.mg time to come, the stock should be above par. While on the contrary if the undertaking of the Company is of a transitory nature, though good profits are exiiected, the stock will lack permanence as an investment, and this feature at least, will have a tendency to depress the price. I\ 15: Watering Stock. This term is applied to all prorcsses of intlation of stock beyond its real value. It is usually accomplished by allotting additional shares to the existing shareholders fully paid up, while in reality nothing was paid for it, or very Mttle at least. It is resorted to usually where the government has reserved all profits made over and above a certain fixed rate pe' annum — that may !-<» paid to the shareiiolders. To avoid paying such surplus to government they will increu. *i the capita! so ttiat the rate of dividend may be kept under the maximum rate fixed by government. Siip|)ose the Consumers' CJas Company, capital subscribed and paid up, $100,000, is limited to 10 of dividend on capital to be paid to the shareholder. The management see that there will be profits large enough to pay 30 per cent, on the capital. In order to retain the profit in the company, suppose the capital subscribed and paid up is increased to $;'oo,ooo, there will be two ways of redu- cing the rate profits — (i) by the increase of the amount on which it is divided, and (2) by making up the impairment caused by the granting of the new stock, fully paid up, to the members. The entries for the .Stock Watering would be : (i). Shareholders, Dr., $100,000, i (2). Coniniission a c, Dr., $100,000, To Cap. Siock, $100,000. For amount subscribed by the v.irious Shareholders. I'o Shareholders, $100,000. ammuit credited to Shareholders so as lo gi\c them fully paid. In entry 2, Commis>ioii a c. is only a sani|)le iiaiuj. Von might use " Impairment a,c.," or Bonus a c. This lakes charge ot the impairment temporarily. In future years a percentage of the commissiun would be written into Loss and ( lain a (•. every year, to keep the dividend under the maximum rate jiayahle by law. Suppose the profits for the year were $50,000 in the foregoing example, and that an 8% dividend was what we wanted to [).\\\ on the capital as increased the 8% dividend would be $16,000. Now. 14 of the ommissioii or impairment a c. would be closed into Loss and Gain a c, thus giving the sliareholders really 30%, while only appearing to give 8%. There are miny ways of doing this WVitcing process — in short, any fictitious issue of stock for the purpose of lessening dividends to a legal standard is Watering, The term is said to have originated widi the late Daniel Drew, who sold great quantities of live stock in New York, and rejjlied that he knew when and how to water his stock, in reply to a query of a friend asking how his cattle weighed so well. Stock Dividends. It frequently occurs that the business of a corporate concern is pro.spering, and profits are being m.ade, and yc-. it might not be advisable for the shareholders to withdraw profits on their shares as dividLMids. In other words, the increased trade requires in- creased capital to carry it on an J make it still more profitable. In such cases a stock dividend is usually made to the shareholder, which increases the proprietory interest of each shareholder, but does not lessen the capital. There are three ways in which a stock dividend may be paid, as follows : C.vsE I. If the shareholders have no; piid up their shares in full — suppose the case, that seventy-five psr cent, of thj shires taken were u.iid up, and there are plenty of profits ■[[i illr^l — ^53 — to pay up the remaining 25/, and tlut llu' dividend were to he taken in that way and none taken in cash. 'I"he transactidii could he put througli in two ways: Dividend, Dr., $500, To Cash, $500. Cash, Dr., $500, To Shareholders, $500. or Dividend. Dr., $500, To Shareholders, $500. I NoTK. The term Shateholders is not a Ledger account heading in either case; it I is iiUeiided to represent the names of all the ! shaieliolders. It is a n^atter of choice witli llic hookkeepLr, .Manager or Directors whether or not the dividend is put through Cash a( ( ouiU. Case ii. If the capital that is siiiisciihecl is all paid up, the shareholders could take up more stock — one or more shares each and ( redit the dividends on the new stock as paying a call ;)n it. The entry or eiUries would he just the same as in case i, with the addition of the entry dehiting the shareholders to Capital .Stock for the new shares. Case hi. If the suhscrihed capital wer- all paid up, and the company were going to pay a stock dividend by giving ea ii shareholder a fraction of a share, fully paid, for a dividend on each share held suppose a (luarter of a share, or a 25% dividend. The entries would be the same as in case :, only the ('a[)ilal Slock entry would be less in amount, being only the amount of the (li\ idend. The entries should he put ilnoii.h the ( leiieral Ledger to show the transaction fully and be entered uj) in the Stock Ledger, as indicated on pages 109-10. If a book-keeper or manager is satisfied with an incomplete record, the entry Divi- dend a/c, Dr., To Capital Stock, may he made, and the amoun's only entered into the Stock Ledger as usual. We have not met many officers of companies that would be satisfied with anything less than the full entries, showing the transaction in the General Ledger. Proper and Improper Dividends. A dividend is unlawful and improper when paid out of capital, or in such a way as to impair capital of a company. The meaning and spirit of the act is not that a company with an impaired capital is ileharred from l)aying a dividend, but that the pay- ment of the dividend must not he the transaction that produces the impairment. In other words, the dividends must hii paid from profits and not from capital. A company might have a capital reduced one-half or a quarter by some impairment, and after all begin to make profits and pay dividends before restoring all the capital that was first lost in the undertaking. Various are the schemes resorted to to pay dividends, in order to keep faith with some shareholders to whom promises of large profits were made, or to make the remain- ing shares of stock sell well, or to enable certain shareholders to dispose of part or all of their load of stock. If such stock is paying a good rate of dividend it will sell readily and bring a good price. We have set n companies [jay a dividend out of capital, and recoup the impairment of capital caused by the payment of such dividend from the premium collected on stock that was sold immediately afterwards at a premium. It took the dividend to make it "go." ,.?■ * '.■ %m\- m I?! — 154 Improper Methods of Getting Profits for a Dividend. The following are a few of the means adojited to raise prollts for a dividend when one should not really be paid— they are all more or less ol)je(tion,ii)le from a financial standpoint, illegal and fraudulent from a legal standi)oint, and highly impro|)er in their tendencies from a moral view point. W'e do not recommend them to he practised, iuit ad- vise that they be guarded against by both the directorate and the general membership of every company : (i). Charging payments to I'roperty accounts and holding tliem as resources that should have been charged to allowances for running tiie i)usiness, and in that way come into Loss and (lain account. For example, supjjose we charge .$300 of a bill of repairs and fittings for our machinery, to I'hnt instead of to Rep.airs a c, it is added to the cost of our plant and allowed to increase it every year, when the amount should !iave been sent to Loss and (lain through " Repairs a c." .Another case we have frequenliy noticed is the charging of the repairs to a house to Real Estate a c that should he sent to Loss and (lain through Expense or Repairs a c (2). The over-valuation of lands, stock, mines, paliMits, privileges, \-c., has the same effect — it is a pretended increase when none really exists, 'i'he valuation is a matter of judgment, and a very easy hole to step (nit of any responsibilit) l)\ claiming an error of judgment as an excuse for such over-valuation. (3). Leaving out liabilities that should have been in and paid, or credited to the parties that have the claim, so as to be properly counted in, estimalmg the worth of the concern. We recollect a company that left out of its books over $2,500 of liabilities and was talking of profits and dividends, whereas the company really had its capital impaired Now, this not only occurs when Personal accounts payable are left out. but also when in recording the inventories of a company the person keeping or auditing ilie books neglects to put down all unpaid Rent, Taxes, Interests on Mortgages, \otes. iJiils of Exchange, &c. He just neglects his duty, and makes out an incorrect statement of the standing for the company. 'I'he same is true if any Resources in the way of prepaid rent or taxes, or interest is not entered up, the profits are short the amount thus left out. Estimating for a Dividend. A little carelessness on this point sometimes causes some iioulile, and sometimes costs the book-keeper his position. Suppose you arc askid, as the book keeper of a company, what the profits are? \'ou take off a Trial J>.i!.i 1 •.■ .i:kI e-eiJ the losses and gains from it and hand it to your directors. Now, this may be correct, and it may be very far wrong. Plenty of Liabilities and Resources may be left out of accounts, such as rent and salary earned, (Jv;c. 'I'hen the dividend is declared on this basis and paid, and the books do not show what was expected and you are called upon to explain by mem- bers or shareholders and directors how it is, and you begin with shamefacedncss to say I did not estimate on this and on that and the other thing and they see at once that you do not understand your work. U'hen you submit such a statement be sure you estimate all current Liabilities and Resources not in the Ledger carefully, so that your — ^55 — 4 L'stimate may come very close to llie real profit and standing at the date when the divi- dend is paid. If yon prepare sucli an estimate carefully, with due regard to all the circumstances and probabilities and facts up to the date of payment of such dividend, you will not only have the confKkiuc of your company and directors in your work as a i)ook-keeper, but as a financier also, and you will be saved much vexatious questioning and explanations. Expense as a Resource- ANhen anything was purchased for use in the business, such as a quantity of coal or wood, oil for machinery, &c., and this perhaps has not been all used when stock-taking time comes around, the full value of such articles remaining on hand should be made up by making an Expense Inventory. In closing Expense Account, when there is such an inventory, enter the amount of such Resource Inventory on the credit side and bring down the balance on the del)it side of the account as a charge against the next term of business. The Expense a c. will thpn be closed into Loss and (lain a/c. for the balance, which is the real loss for the current term. « Office Furniture, Chattels, Books, Stationery, etc., a Resource What is true of the items usually charged to Expense Account as explained in the preceding paragraph, is likewise true of accounts with all such articles for the use of the husiness, as office furniture, chattels, books and stationery, horse and waggon for delivery, etc. Accounts with such articles in carefully managed businesses are kept separately, :md wh'^n stock is taken an inventory is taken for all such accounts with "allowances." Ibey are treated just the same as Expense Account, that is, the inventory entered on the ("r. side of the account and brought down on the Dr. side for the next term of business, and the balance of each, which is the actual loss on each account, closed into Loss and Gain. Interest and Discount, a Resource or a Liability. In order to ascertain the exact worth of any business when a balance sheet is being made out, a complete list or inventory of all interests receivable by the firm and payable l>y the firm should be made out, showing not only the interests due, but all earned or accrued and not yet due. All accounts and notes not due and not bearing interest are not worth their face at present, and therefore there would be an inventory of discount on them. When such inventory of interest and discount is completed it should be entered on the Cr. side of the account if a resource, and on the Dr. side if a liability, and then brought down on the opposite side of the account for the next term of business, showing a resource or liability according as it appears, when brought down, on the Dr. or Cr. side. The account may then be closed into Loss and (lain account for its actual loss or gain for the term of business just closed. If the various kinds of interest and discount are kept in separate accounts according to the source from which they come, such as Bills Receivable, Interest, Mortgage Interest, etc., a separate inventory should be taken for each. . I m ■^w -.56- Whcn a person buys out an intoivst in a l)usincss ^'roat care slioiilil l)c exercised in mnking an inventory of iiilercsi and (liscoiinl. and should such husiiuss have many per- sonal accounts where goods were sohl or bought on long terms of credit, the due date of such accounts should he found liye(|uation of the accounts and the interest or discount to the date of settlement included in the interest inventory. Rent Account a Resource or Liability. Rent, as a term applied to the consideration agreed to he paid for the use of property, usually shows a loss or a gain -a loss if we are tenants, a gain if we are landlords. To the tenant there may he either a resource or a liability of rent. If my rent is paid for s(5me time in advance when my balanc- sheet is taken that prepaid rent would be a re- source and should be entered in my inventory book and treated as a resource inventory in the same way as any of the foregoing resource inventories, ll at tiie time of taking the Iwlance sheet there is rent earned but not yet due. it should be entered up in the inven- tory book and treated as a liabilit)' inventory by i)lacing it on the 1 )r. side of Kent account and bringing it down on the Cr. side the same as any other liability when the account is ruled up. The account will be closed as usual into Loss and dain. If there is rent earned and due and unpaid at the time of taking a balance sheet it should be entered up by a journal entry charging Rent account and crediting the landlord personally. It would in this way be carried as a personal account, |)ayal)le. It could, however, be carried as an inventory the same as rent not di'e. In the landlord's case the rent accrued and not due would be treated as a resource inventory. Rent due and unpaid should be charged to the ten^mt's personal account, while rent paid in advance would be carried as a liability inventory. , Insurance as a Resource. When we refer to insurance as a resource we do not mean the face of the policy, be- cause we could only claim that in case of parting with our goods or property by fire. We do mean, however, the premium paid, or cost of the insurance. .Suppose we insure our shrp for a year at a cost of $120 for premium on the first of lebruarv, on the first of March the "earned premit'm" on that policy is only $io. leavuig a resource of $i lo to be entered into the Inventory Kook and carried into the insurance account en the Cr. side and brought down on the Dr. side against the next year's business. iiiif Unclaimed Dividends. It frequently happens that the owners of small amounts of stock neglect to call for their dividends when they are payable. Sometimes it is not convenient, and sometimes they are forgotten ; sometimes they are f;ir removed from the office of the company and their address unknown to the maiugement of the company, so diat their dividends cannot be sent to them. Occasionally investment has been made in a com|)any that has not been able to make its undertaking pay. The shareholder gives up locking for a dividend, and counts his stock a loss, perhaps writes it off his books. A profit is made and a divi- dend declared and he knows nothing of it. A person holding slock dies. It takes some \i\ mm — is: — lime before he has a (lualified Ic^al reiirosoiUativo. eillior an executor or administrator who (an receive the dividend and j^ivo a refcipt lor ii. In ihest.' and all oilier cases tliat arise where the (hvidend on ai.y shares cannot l>e paid at tin regular tinic, some account miisl he opened to take cliarge i\idend .Xccount lnresery ili\ ideiid p.nd, and ntiin- lier them No. t, No, 2, to correspond with the nunihei of the dividend This is scarcely ever necessary, as usualh' tliere .;re only a tew irans.ictums of this nature I'or e\er)' divi- dend. If the dividend IS all ji.iiil out .iiul sent by mail and one or nunc is retmiied it would be entered on the Dr. side of the Cisli llnok : "J'l' ( '/u/n/'/i,,/ Pii'idiiid, lor .\I.C. Hoyd's Dividend No. i, returned, $15.' If the divideiul has not heen paid out because the persons cannot be found, then the Dividend .\ccoiuit could be chargeil through the journal with the unpaiil portion, so th.it the pro|)er bal.mce of I ,oss and ( lain Ac<'otmt of the com|)any can be ascertained .nid to the I'nclainied I >i\ ulend .\(i:ount < ledited to keep the liabilities correct, thus : Uiviilond Account NH. I ......... .s(."(.ou, 'I'd L'luliiiiiicil I )iviili'iiil .VicMiiiiU .... s4,')..")(l lor Diviiluiiil iincliuiiu'il per Diviilt'iiil Imok. as follows : W. Siiiilh, .■*•_'() : 'riioH. 'I'liylor, .sHl ; .Iiio. I'.ukir, SI.',. When an tmclaimed dividiMul is called for and paid the pa\inenl will be charged to Un- claimed Dividend a i'. If [)aid in cash on V\\ Side of Cash Hook. />'r Uiuiaiiiu'd Dividend ]ij\\\\ I'arker's Dividend Xo. 1 (muI to him .■{; 15.00. Reserve Fund, Rest Account, Etc. In Stock Companies it freiiuenlly occurs that there are more profits th.ii, it is desir- able to distribute as a dividentl or bonus. 'I'he ipiestiou arisen, what shall be done with such surplus profits? In what account should they be kept ? Should cash or property to the amount of this surplus be separated from the ordinary prcjperlv ami assets of the company and made into a sei)arate fund for s]iecial investment. In ver\' lew coin|ianies is there any special separation of the reserve, nor is it necess.iry, though in a lew cases we have seen the surplus profits handed over annually and (iiit in ,1 sei)anite set of books. We have freciuently heard the intelligent shareholder say I see vcm have ([uite a surplus accumulated, where is the cash to represent this, and it is diffuult to make him understand that this surplus profit is with the ordinary assets of the compan)' and that if the excess of die company's resources over the current liabilities is greater than the i)aid up capital, that the difference is the amount of the a<(umiil.Ued surplus [irolils. There are three general ways of treating this stirplus of prcjiits. (1) To carry it forward from year to year as a b.ilaiue at the credit of loss and gai^ account, the balance brought down each year being the accumulated profits to date from the beginning of the company. m .1! m I I If" ! -158- (2) After the (lividciul is paid each year or half year as llic case may Ite, the profits remaining (>\cr arr written on er or closed inic aii.Hcoiint opciud for this spe •J,iMiii,(iii:i l,lillll,(llMI •_'S"_',."ill() "•5 1 >iiiiiinl(in !,,",( Ill (1(1(1 |,;j."iii,(i(iii •_'•-'! 1,1(111 7.'» Inilicri;U l,.v.i;,7l(i 77s, .•Mill •J'_'ll,SIIII OS ( Inlarii) 1 ..'illll.OIKI ■js(i,(iiiir i:{o, 1(10 1 lainilton 1,-.' Ili.S.VI (liiii.iiiiii M."i.l--'4 7.7 Slaiiilanl 1 .'lll!l.(lllll ."lOo.diiii ll7,.'iii(i ;.,s Traders 11(1(1,11(1(1 :ij,(i(ui .■)4,4;(7 S.5 r:reilll III (irofil iii: luns iS'jo, liiyi. :? § I \ZH >«7<)4 7JS ^'■l.'lli.T'.'.S j7.„74 -',411(1 5, (JIM 1, •••'«• 0(i,5Si')i ll2,.'tN'_' 2j,SoS 1 0,L'.-iS 10 " 7 ■ 7 ' 7 ■ III , <'.25.? (I,tl7li "Id . 4S,o20 ."i(i,7."iii *S , io.n7 j 1,71 1 7 ■ S , 1 i,(iiii 1 14,4(14 ,. 1 / ■•' 1.JS4 .■..lil-J , .SlIIO.IHIII .I'-'.', 1. 17.'>,ddii ,d7U. |(lll,IIIKI .diH I. ."id.lMKI ,(i:i4.-)l. ."l(l,dll!l .11 I. .'tl 1,1 Mill 1,1 •-' 1. ."ili.'.KHI .■Xi\ 1. Id.ddd ,d.S'/ I. l."i,d()ll .7.-. I. * 1 iHT cent, bonus. t Last year tli uiis ilc|»h'tt'il oi' iidf. The following remarks by the I'inaiicial I'apci !'he Mc" hant"oii the above state- ment, will be found to the point. "On the whole, the rei)orls presented at the annual bank meetings this year have been fairly satisfactory, although in some instances not being tiuite up to the usual s' 'id- ard. The net jirofits of the prominent banks, coMi|irising those doing business in thi city, aggregated .$3. ,500,522, against $,5,.S58, 302 last year a deeri'ase of $557,7X0. The net earnings of the liank of Montreal show a falling off of $532,312, as compared with the previous year. The .Merchants' and Commerce als(j show a small decrease in nrofits. the former by some $25,000 and the latter by about $10,000 ; the earnings of the T' jnto -- 150 - Hank wi'if practiially llu' same .is in vli\i pnvioii^; tlu' |irolil.-> ul' llic liiii)i.ri.il wiii' in- civascd liv $.'i,7()5 ; llio 'I'railiT-.' Itaiik pnitiii .show an incri'asc i)f $17,800 ; llanultnn, of $;,3oo ; \\\\\\r the t'ollowinn hanks >hii\\ a (Ui uasc in |iinlUs ; (Jni'hic, of $.^2,joo : l)oinini()M, sonic $jH,ooo ; Standard, $7,5X4. and Ontario. $,;,. 17s. NV'ithir ihi' Montroal nor (Jucl)ec Hanks addcront(i each adik'd $100,000 to the Rest, and the Merchants', $175,000 ; Dominion and Inijierial each added $50,000 to Rest ; M.imilton, $5f),tjoo : Standard, $40,000; 'I'radirs,' $15,000 (75 [)cr cent, increase), and Ontario laid Uy $jo,ooo li>i>. year for iv-tock is really worth $150 for CNcry 100 of par value. ( )n the otiier h.ind if there is no rest and the cjpit.il has been nupanetl by losses \c. sa\ -'- ihe stork \\'\\\ oiils' be worlli $75 per $ 1 00 shari'. I'M-^idi's ihe Items above inmlioned lliai iiiike the re.il value of shares ;j;realer 01 less than ilu' par value, \ i/. the ( 1 ) Rest Account and (_•) tiu' impaiiiiiji, of Capital, there .ire (itlier 'onsiderations that help lo m.ike slock sell above or bi-low even tlie real value, or in other w,.; K make the markel value differ from the intrinsic value of a share, these .ire (: ) Tile rale of dividend usually paid. If il is liii;h il will ineri'ase the m.ukci v.ilue, of the share and if low depreciate the market v.iluc {:) If the rate of dividend is variable, sometimes hi^li and somelimes low, the uncer- l.iiiitv will likely lower the markel value. (5) The |)rohable [lermenance of the investment. If the profitable biisines; o! the company is likely to be permanent it will incrtase the vahieof the 'shares, whik'onihc other hand if the demand for the product of the <'ompanv will terminate, or the supply of iiLUtrial, \-c., run out or if there is a chance of opposition dividing ;'•> a |irolii.ible trade the market value niit^lu be vei'v m ich lo.ver thri llu red vaUu of ihe sliire- . Cancellation of Stock. .\ Stock Company' issues shares to ils stockholders pavable in inslalmer.ts. This is llic custom in almost all companies. .Sometimes there is an understanding or an iinijiession left with the subscriber thai only ten. twenty I'lvc, lifiy, or si\ly per cent, will be called, and though there was really no agreement that it would not be called up in full, there w.isan in- leiiiioii to try and get through, with Ic'-s th.m the total pavinent of the sK.ck. Sup|i(ise the coin|)anv- is not viTv successful at ihe beginning, and ihey sink |)art of llu' capital tlu'v had and re(|uiring mori'.theylevyanolher call. .M.niy shaiiholders will say, "It is a l(i>iiii; con- cern ami we will not throw good money afUr bail, we would rather lose what we have in it than p.iy more in and then run risk of losing all". I'liey decline to pay up the impaid I. I! Si!: — \C)0 — jioilion of llif stork. 'Hktc arc now only two courses open to llic company, first to sue and rcc(>\cr ihc lialancc of the stock liy process of hiw if the sliareliokler is wurtli it, or sccon 1 cAn!\.>l ilij sh i:\-; iie'il on wliich full payment lias not been made. Some companies choose the first course some tile secciid, and some will collect all they can at law and then I'ancel what the)' cainiot c(jllect on as a last resort. \ow a company that cancils the shares of stock, should do it oidy after a fair and legal notice of call has heen ,t;i\en to the shareholder warning him that his stock will he forfeited if he does not ( ompK' with his sul)scri])tion to the Stock Hook then after due refusal to conipK with Wic notice of call the shares should he cancelled in the same way as thev were alloied. If alloted simplv 1). resolution of diri'ctors. another resolution i ' - s sufficient til caiuil them. Il' lhe\' weri.' allotted li\' 1)\' law then a hydaw must he made to I ancel them. The hook keeper will make an entr\- writing back the sh.ires to the Company with Capital Stock .\i count and then close the Shareholders .\(counl into Loss and Cain. (i) for cancelling five shares of stock ( apital Slock I )r. .$500 'I'o J. W. .NUCIellaiu! (Share .\ccount) .$500 J. W. .McCli'llaiui (Share .\ccount) I)r$200 To Loss and Cain $200 of $100 each standing in the name of |. W. McLelland. (.') L.nlry ( losing the account into loss and gain if .$j?o had been jiaid u|)on the stock. It will be noticed by the abo\e entries that the cancelled capital comes into tlie loss and gain account on the credit or profit side. It becomes .i profit to the companv because the liability of the i',om[)aiiy back to the shareholders is dei'reased to this extent. If the company \wie lo go into liipiidation there would be a greater |)ercentage for the remaining shareholders, in ollar words the j>aid up capital of the cancelled stock is simplv ajjpro- priatod lor the benefit of tin.' shareholders thai remain in the concern, thereby increasing their financial interests. Then in case of prnfns being made and a dividend paid they have an additicjiia] atlvantage, the paid up c.i|)ilal will be smaller ami with a given amount of profits the dividend will be greater thereby giving a double advantage firs the direct profit accruing from the c incellati(jii, and second, the increased rale of dividend because there is less Share Ca'iital to duidc on. Freezing Out Shareholders. 'I'lie "/■'/■(■(■: r r'/c/" |)roceeding is ,\merican in name at k'ast. it is any processor jiroceeding financial or otherwise done on the |)art of a section of the shareholders to make another pari of ihe shareholders uncomfortable and wish to get out and so part with their financial interests .n a sairifu e. It is when one or more shareholders take advantage of some circnmst-uK e or make ,i circiimsl.uice that will put the remainder of the shareholders at a dis,id\.iiii.i_:e in soiiu way. It is made either unpleasant or unprolltable for them or both. We do not mirodiice this section to commend this kind of proceeding, because it usually is iini hoiiesi ; but just by way of 'aiition to those investing. We do not jiretend to give all the wa)s in which it is done, (jiiiy a few of iliem. < — ir,i — Iditional is the cruing s less ocess or lo make lUi lliei: lUaiie espcctini^ to i^et large relunis and take more stock than they (V?/, rain. More than tht \ can rcalK pay the calls (in. When others \'\\\^\ these oirr/oadtui piMijile who cannot pa\- up the calls the\' sometinu's crowd them liy hringing on calls rapidi)'. an(l then cither n^ake these pcfiple sell at a g'eat rediiilion or cancel their shares entirel\. A li not 1)1' tii.it |)r(i(lu(ti\e kind ihat !ea\es pruperly in tlieir |)la( i'. In plain I'aiglisli the ca ra|)ilal lias been inif^aircd to tlu' ani(jiini ol -.neli exjienses. i'his is the ease in almost all large lite insurance. I'lre insurance, and lo.m eoinpanies at the I.eginninii. as well as with nian\- niauutaeluring companies. of ageneies. etc. I, a rue sums iKive lo lie e.\|ieudetl in the estaMishmeiU It is the ])ractice of many comp.niies to close :dl accnurits for (.Ajjenditurcs that arc not represented by i ■eal ir I lersonal properlN' that are ma( up to the time when the com- pany gel^ into woi king order, into some such account as "( )rLrani/ation .\ccouni." or "Orirani/ation !v\pense Distrilnilinu Account. " and spread i ive or ten years, ciiarginL;; a |)ereenlaL;e e; lis e\[)ense over a term o year against ihe profits until it is wiped out. It will be noticed in the Resource and I aaliilitv statement on page i 6S that such an aci-ount is (Miried as a resource' or an assi't of the company. It will no doubt be thouuhi a rather inckfmile asse •t for a comnain. 1 1 is llO\\l.'\ (. i- a tax or moituagc in advance on tlie iirofus for onie \ears to come. ■|1 lis real!\' regul.iies the wa\ that the impairment of capit to be m.ide U|i. '{'here is no s])ecial reason win' tlu' aci ount might not h i\ name. 'I'lieseare suggested as biiiig e\plaiiator\' ol" the irdui'e of ilu'acenimt. seen such aci:ounts ke|)t as "'.Sinking liind .\ccount. " ••Commission .\ccount. " t d W" \\ IS :)llier ha\e Some woidd suggest that th is (.\pense that has resulted in the iiniiairuieii I of ih capilal could be- carried on the debii side of Loss and Ciaiii .\ccount and broughl down from \ ear to year ; but it would not be so done in [)artncishi|) accounts it would he charged directK' to the ('a[)ital Accounts, in the corporate concerns the shares are kipt at their face value and tile impairment shouki he carried in an account for that ]nirpose. ( "all ii ■'Impairnuait oft la[)ital Account if )(iu like. It is tar bi'tter to keep such an account than lo |uit fictitious \aliies on assets to show that the capital is not imp.iired when it reall\ is so. Tl lere is still another reason whv tliis impairment should not be left in Loss and ( lain Account. The Loss and (lain Account is realh' the receptacle iw ntnciit profits and losses. Tiiere is a clause in the law that governs corjiorate com|)anies in almost all |)laces when- thcv can get incorporation, that says in so manv wortls or in effect that no di\iden(ls shall he jiaid out <.i{ capital, or in such a way as to impair capital. This being the case the car- rying of the iinpaimient in the Loss and Cain Account would appear as though the loss of cajtital were made the current term, wliereas it was made before the last annual settlement halaiK 'e sheet, or ijcrhajis behind several balance iheet^ r pay disideiid out I. d C ain .\ceount with the im[iairmiait of other \ears brought I'orward asacumnt ciiarge against it would seem, at least, to be paying dividend out of capital. l>y keej Mlli th. le imiiairmeni ni Loss 1| It is sugges ted. ner and C haps, th am \c<'OU nt it has never been cliarged against capit; U the impairment of capital should first be made u|) out of l)rnfit> before a dividend is paid to shareholdeis : but shareholders will not alwajs w.iit that long for their dividends ; m fact, in the majority of cases they say, I'ay us profits on left the unimpaired itortion ami leave the making up of the fust what c.ipiial we ha\( OSS uiuil pleiit) of profits are matk'. i^^i i m 163 — Inventory Book. The hooks of ever)' husiness arc usuallv S(|ii.ircil upoiicc a year. A lialmco Slieut is made (Hit aiul soavj or all a<'ci)unis closi'il, ilias marking ilic coiulition nf all such accounts as are closed at the time of sik'Ii balance. There .ire niimcrdii-. aciiumts that, by the ordinary 'jntries, do not show the complete results of the lui^iness tor the leiiti closing, nor the as.sets or liabilities that they should carry forward to the next year. Such accounts require something wiitten into them that is cither a resource or a liability to show the loss or gain for the year or term closing. This is usually an iinhiiti>r\\ anil there should be a complete recortl of such items as constitute that inventorx in a proper book, and such Inventory iiook should be carefully kept in a safe or \ault, or other |)lace of security from fire. It is of untold value in case fif loss by fire in a seiilemeiu with an insurance c()m|)any. as well as a satisfaction to every careful pioperty owner. This book should coiUain a yearlv or half-vearh' ncord ^>\ ,ill RcMiun e and Liability Inventories not shown in the Ledger, .\moiig the sanoir> Kesdurce linentories wi.' might mention the following : Resource Inventories. (r). Afiir/itindisi' a c. : .Ml goods or merchandise in stock. (2). luiniitiirc a/id /■'i.x/inrs o c. : All propert\- now on haiul charged to that a c. (3). /''iiil iiiii/ /.i)^/i/ (t I.: .Ml wood, coal, coal oil, ivc., in stock. (4). /u>c>A\\' a)iii Stationery a ■-. : The i)resent value of books, i'<;c.. unused. (5) Miuliiiury and Tooh a ,: ; .\ list of all articles belonging to such a c. (6). y./V'f' .Sti'c'A a I-. .• .\ comp'ete list of all h(jrses, cattle, sheep. iVc., on hand. (7). A'la/ /■'statf a t: : The [)re>cnt \alue of all properties held. (8). Stocks and /ionds : I'he market and face value of all su h secureties. (9). A't-fit a c. : (a). A list of all rents due and unpaid. (!)). " M accrued not dtie. (10). Interest a c. : (a). 'I'he sum of the amounts of all interests due a id unpaid on Mortgages, iiills Receivable and Personal .Accounts Recei\ahle. (b). .Ml amounts of interest on said iiills. Mortgages and .\c- counts bearing interest and accrued but not i\\\^i. (c). .\ list of dis(()unts on ;ill Iiills l'a\abK' not bearing interest entered at their face value anil not yet due. '11). SItipiiient a c : The jiresent m.irki't value of such goods as \(uir ow n ih.it lia\'e been sent by you for sale on conmiissiou. Liability Inventories. 'i). Rent a e. : (a). Unpaid rentals due by us antl u:ii)ai(l. (b). Rents accruetl but not yet due. (2). Interest a c : (A). .Ml interest due and not paid on Xotes, Mortgages and .\c coimts, Tayable. (b). .Ml sums of interest accrued and not due on Iiills and .Mort- gages Payable and .Accomits Payable. (c). .V List of discounts on all Hills and Mortgages Keceivabic not bearing interest, entered at their face as resources and not vet due. - tr,4 - - 'I'Ik' fi)U'L;(>ii\L; Rcsourc i' mid Lialiilit) Iiui'nKin'cs slimiU ho cnrofully made up and rc'CdidLd ill tlu' iinriildiy IxHik, csju'cially tlic interest itciii' \'ii\ many hiisinss men omit this item eiilireh-. lakiiiu e\er\ iliiiiii al its I'aee. hi or lev to find tlie true standini: of a l)usine.ss, all the I'ersniiai AeiDunts, both |ia\al)le and ijeei\'al)le should be equated, antl a list of siieli with liieir ei|ualeil due dates, time, and 'nterest or discount, should be madi.'. It is not .-ulli( ient to eali iilate interest or disiount only on tiie Commercial paper and iniirii^a^es in makinu up insentories for the interest ai'< nunt. No sperial form of book is nes-essar) — an ordinary day book or journal dues very well ^s thei'e is considerable space for e\iilanalions (which should be full and explicit) and mone)- cohmiiis in which to maki.' up the amounts. A se[iarate s|)ace should be kept for the in\i-ntory of eacli account, and in case of interest or other accoimts having \arioiis di\isions. each of the iinentorics should ha\e disision of the iiuentorv book for itself Financial Statements. There are a .I'reat nian\ varieties of linancial statenieiils published, as to the form and arr.ingeiiii ill. L stialb-. however, tlu're are onlv three kinds, vi/., Resource and Liability statemen' . I .oss and ( lain statements and statements Receipts and Payments of (.'ash. Sometimes a com|)anv will |)ublisli all three kinds at once usuallv two, sometimes only one. W heie the companv is a tradin.i; ( nrporation, such as a Joint Stock (!ompaiiy, formed for the purpuse of makiiiLi; prol'it for the shareholders, it would be expected that a Loss and ('i.un sta.temeiit would be made to show the jirofits from various sources and the losses and e:\penses. This statement shows the progress of the business. The Resoun e and Liability ^-tatcment is made to show the actual standing on a certain day. \u a non tradiuL; cor|ioration. such as a 'I'ovvri, a Township, a ('oiinty, an Hospital, a Church, a l>ene\(>lent Societv. a Mutual Insurance ( 'ompany, \-c., the Receipts and Taymeiits (if cash are the im|iortant tacts lecpiired by the interested parties, ist, to see fromvvhenc' :''.e bmds (ome, and .:n(i. to see that tlu'v are properly disposed of A statement cjf Reet'ipts and Payments ofcash will supply this int'ormation. This is the kind of statement alwavs issued by such institutions. A Loss and Cain statement is only made where liusiness is run for jirofit. It is further ne<'essar\- to [iresent a statement of Resourc.'s and Liabilities to show the exact linancial standing at a particular time. Now, to sum up : , ,, .• ,- ,• r ■ (A Loss and Cain statement, .\ ( orporatu'in tor niakiim profit issues . ,, i i ■ i i^ \ . ' ■ ' A Resource and Liability stater .■ment. ... . ,. ,,1 .• I .\ statement of Receipts and Expenditures ,\ ( orporation lor public benefit issues ... , , . ,'.,. . , ,. ' ' I .\ R^■sollrcc and Liability statement. 'The .statements publishecl bv all corjior.itions should be fullv explained in words so I'learlv that the most unsophisticated shareholder could understaiul exactiv what is meant by it. Suppose we siilnuit a 'Trial balance to the average shareholder in any ordinary companv. what would he understand from u. It' vvc make extensions from it the same as an accountant usually does lor a !)alance sheet, m what better position would the ordinary shareholder be, who is uninitiated in the "mvsteries" of Double Entry, to judge of the [irogrcss ol the comiiany during the _\.ear. -,6s- In the case of towns, villaue^. \c., il is r(|u;illy essential to describe clearly from what sources the reveniK.' i> ohtainid and how ii is (li>|>(isi(! of. It is, therefore, very jiroper for officers doing the business or auditinL; it to ])rcsinl a full statement for the l)ur- posc of explaining the linaneial transactions, and not an anil)is.',iioiis production to cover up indiscreet or illegal expendilmes of the funds. Loss and Gain Statements. The Statement of Losses and (iains is one that belongs entirely to Double Pantry work. It really cannot be made in Single I'.ntry, as the loss and gain in Single Entry is ascertained not from the various items of Losses and (lains, but t)y subtracting the capi- tal at a former period from the capital now, if there has been a gain, and by subtracting the present capital from that at a previous term, if there has been a loss. Statements of losses and gains are SOUK times called "Profit and Loss" statements The term Loss and (lain is the modern term used, because in the Ledger account with losses and aains the losses all appear on the Dr. side and the gains on the Cr. side. If we write a Ledger heading Profit and l.d^s o\er this ai count the word Profit will be over the side containing the losses and the word Loss will be directly over the side of the account where the gains are collected, eieatiiig confusion, at least in the mind of the learner. The Loss and (lain statement should be an analysis of the Loss and (lain account, giving a reasonable explanation of all the sources of profit, so that the shareholders and directors may know which are the proluable departments of the business and of the disposal of the prolits. The profits may be uned up, so to >[)eak. in four way's : ist, by having losses on some speculative accounts : Jiid, by the running expenses of the business, such as salary, rent, fuel, iVc; ^rd, by being jiaid out t(j the shareholders as dividends, which really amounts to paying them interest on tlu' cajiitai invested : and 4th, by placing it in a Reserve Lund or Rest .Xceount. Ireiiuently all four are in the one statement. There are two ways in whicii Loss and Ciaiii statements are made. '"he first is to sinn)ly present a statement of the actual losses and gains for the term of business, without reference to what was the eomlition of the account before ; and the second method is to show any balance of iirolit or loss that remains from a previous term of business, and show the actual balance of jjrofit carried forward to another year or the balance of loss that is to stand against the re\enue of the incoming year. The following statement is a real one of the ( )ntario Peojjle's Salt Ma.'ufa( turing (j)m[)any (Limited), at 30th May, i8y2. We gi\e it as it ret'er^ only to the current financial year, the first kind of a statement, antl afterwards as showing its relation to the year past and the one to come. We select this example on ad nuni of it beginning with a balance of loss carried down from a ^)revious year and ending with a balance of profit carried forward to another year, and likewise bee.mse of a lertain item of organization expense that w-e wish to refer to again in this volume. — 166 — ONTARIO PEOPLES SALT MANUFACTURING COMPANY (Limited). Statement of Profits (tnil Losnex Jor the Finl,(i.')T ill Profits on Sales of Fine Salt *7,«4f) 2<) Salary ami Auditing 7(;:t ;(;! 1 " '• ( '(larse milt .S,89fi 36 Directors' Fees 4!Mmi " " Laml Salt 915 «-i Interest ami Discount I,"il II | IJarrels 1 ,'j:i!i Til 1 Bags ,si» :f(i j •• Real Estate, written off -(•_'.") mi Chattels ami OIHce Furniture iiri .'Id I Postage .'!(i 71; j Telegraphing 11 !).1 | Petty and Legal expenses 'J' s:< | Printing, Hooks and Stationery .... ■_'•_' l'."! Kent, Insurance ami Taxes ."(17 1^ (;oal l,:;:is (ki Coal-Freight si'ii ■J.'.t Coal -unloading .... -Jdil .'IJ Coal— Duty and Harbor Dues 147 Id Travelling Kxpenses li.) Id Repairs Is;; IS i h'a/aiid' />eiii^ pro/il .'{.il^ I (!■_' !<|-_',1.V.' Ml $l2,4r)2 441 The foregoing statuinciit deals diilv with the priiliis mude in llie emirse of the busi- ness of the year and the losses caiisi'd hy tlie expense of earryiivi on the manufLicturing business of the comiiany. The following is the same stateiiKiil. giving its relation to what went before and what follows atur : ONTARIO PEOPLES SALT MANUFACTURING COMPANY (Limited). Statement of Profits and Losacs for the Finaurial Y^ear. hJndlinj .]raySO, '9..\ LOSSES. I'I'.OKIIS Balance of loss from last year S ill.") 74 Prolits on sale.'< of Fine Sail $ 7,K40 20 Wages 1 .(),".7 ill " '• 1 narsc Salt ."J.SiW 36 Salary and Auditing 7();{ .'{H " " Land Salt yiu 84 Directors' Fees 4(1 (id Interest and Discount 1 ,"14 1 1 Barrels 1 ,'j:)!i 7<) Bags .S44 ;{»; Real Estate, written off 4'J.'i IKI Chattels and Office Furniture, written off ir. .'til Postage :{(» 7ti Telegraphing II il.") Petty and Legal expenses 2' S.") Printing Hooks and Stationery •_''2 lM Kent, Insurance and Taxes .'{17 4S Coal 1 ..'!.')S (Id Coal -Freight .^-Jd -Jii Coal -unloading -Jlid :{•_' ( 'oal — Duty and Harbor Dues 147 Id Travelling Kxpenses (i;{ 4d Hei)airs 1«:{ |,S Organization Expenses. 10',, written off " .'{(iil IKI Dividend No. I at ."> \^ I,.'i77 "id Jiixlaiue of profits inrried /'<» 7t'aiii to next year '. I ..'Wl IS $I2.4.V_>'40 .i?12,452 40 — if)7 — I'Voiii tlu- foii'going stiilcimnl it will he -atlirrcd lli:it the directors of tlie company ri'(iuirc considcralilc detail of tin- lApcnsc dI' iiKimihirturc. This is very useful for comparison of oiu' year with aiioiiiei. and 10 ilial in case of loss the exact location of the extraordinary expinse may l>e n iidiK- (li>(()veri(l. Attention is drawn to the item of ort,MMi/ation expenses on the hi. -i.!', I'hi-, is ai. indication that the capital has been impaired hy the expenses of lor ;iiim ilie coinpnny and i^etting into working order, and that the inijiairnient is to lie wij d oil in ten years liy taking a portion of the profits each year for that purpose. See refeieme to [his cl-^ewhere in this hook. Statements of Rc! ources and Liabilities. 'Phis statement, sometimes ral',...!: .i St.itemcnt of ./jwf A and 1 .iabilities is the one that shows the standing of the comp.nn- or iDiporation with those that have any unadjusted dealings with il, and ol' the |aopfri-. > vviicd \i\ the concern at a certain date. 'I'his is the only kind ol' stalenicnt thai < an 'h: mac'i. from hooks kc])t hy single entry, and in single entry it is iiseil to fmd the net wi.rUi. a-, the net worth is always I'lpial to the amount of the excess of the Resources n\^]■ tin 1 aSilities the gain or loss in the .Single Kntry being loiind hy com|).irison of tlic present worili and tli.it at some time l)efore. In Joint Stock Company woik theii' ai" two kinds of Resoiirc,-^ and Liability State- ments tliffering in the way the c.ipital is regardes the amount that it is impaired by losses. The latter sl\'le of --laicmcni will show theexait position of the capital as regards impairment, li\' losses or increisr hv profits carried at the cicdit of loss and gain, or in R eserve Kesl .\tcount. while the former i^ made to show the entire available capital of the concern, both in "work cash ca[)ital and in stock subscriptions un- lid. The following is a statement made from the \iew point of the creditor of the company. .'ompare it care fully with the one th.il follows it. wIik h is ihe same statement made from the standpomt of the sharehold er. m _ ,r,8 — ONTARIO PEOPLES SALT MANUFACTURING COMPANY (Limited). Stdtniiriit nf Ifesoaici!^ mid LluliiUlli s, hiLni Mdij I'llh, tS'.Ki. KKSOL'KCfls. I.IAI'.II.ITIKS. Due from suinlry pui-Koiis rash ill I) ink and on hand Keal KstaU-— estimated vidiic . . . Salt ill Htoi k at wtnks ISarrels and iiiatciialH for Hamc , . Bags on liaml Oil and otlier supidics in Knih'Hsi' Coal on hand (^hattels, tools, etc OIHce furnitiii'f and fixtures Books, statioiieiy, otu Insurance - unearned )ireiniuiiiH . Unpaid capital stork , s Tii-J IS •J,!is| ss . is, sill) (III . •_',!!( Ill .".S •-'1 17 1» .•ill (l-J e l:{ !),■> Ill nil 4ti7 4:. 44 !.■) I-' 0<' ii7 i»ii •_',.Vill nil S'JS, '.).").■. Ill I'.ills I'avahle.. Interest on aliov lieiit accrued iin Ualance Assets 1 e Ml it it due pver i. 0 (Ml Paliince if profits carried foiward at criilil of l.ii.ss and (iain a c. . . . 1,320 IS SL>!i,7;;i III .S29,7:il 40 Tlie above stateinent of tlie Kesoiin fs and I. 'abilities of the company is from the standpoint of the shareholder. All Resoiines must ajipear, whether real like ("ash, ^:c., or fictitious like the last item -Oroani/ation .Xccnuiit, which is an account that pledges the pro- fits of future years for the repayment oi' the amount of the cajiilal that has been lost. The Liabilities are of two kinds ; lust, those to the ordinarv creilitors of the com|uiny, whethe'' held by note mortL;age or book account ; and second. I'roprielory, thtit is. the capital and any surplus or leserve which is reall\- the amount the shareholders would receive in case of litiuidation. iTk) — Statement of Receipts and Expenditures of Cash. This kind of stalciiuiu i-> ;tl\va\> |)ul)lishi.'il by all ii(>iilnhiiiii^ t()r|)()rati(ins, siali as Townships, Towns, Cilirs, Srhool Sections, ('.nintics. llcncvolcMt Societies, Miiliial Insuranct; Companies, (lluiichos, Il)spiial>, and I'lihlic 'I'rusls of all kimls. In such concerns the whole business is usually coveied hy the cash transactions ; therefore this statement contains the business done, antl the s'atemenl of l<.esour{es and I .iaijililies yives the actual stantling of tlu' corporatinn with the pu!)lic generally at its date. Some trading,' corporations puldisli such statements of Receipts and iA[)enditures as well as statements of Losses and (lains and Resources and Liabilities. 'I'he statement of Receipts and I'Apenditurcs in a trading company is not very necessary, and s(>melimes it muddles and mixes the brain of the unsophisticated share- holder who fuuls that the Recei[)l and I'ayni'jnt statement in some items agree with the Loss and (lain statement, while others differ materially 'l'he\- may agree or they may differ in any item common to both. The presence of an in\entor\- on Merchandise or lv\pense or any specidative account brought down from u former year, a cross entry Ijetween accounts, a (piantity of material charged to an Allowanie account and not used hut carried forward as an inventory to another year : also the Inventory of Merchandise or any other speculative accoimt carried forward, are all circumstances that will make these statements differ in the items that are natiually common to both. Take for example our IJooks ami .Stationery account balanc(.' brought down from last year, say $200. Sup|)ose that during the list year many new books had been [)urchased and very little used and a large supply of stationery was left on hand. 'I'he current year only $60 was paid for books and stationery, bm as comn.ir.iiisely little was pLU<:hased, the books and stationery will be low in value, sav $75.00. Now, the payment on this account is $60, while the loss is $185.00. How c )uld the two statements be expected t(j agree? ^'et we have seen a prominent shareholder almost o\erturn the whole management of a large maimfactming concern, where there were about 500 shareholders, because the statements would not agree. He charged the management with embezzlement, fraud deception, mismanagement, and almi)4 ewrything else. It was only after nearly two days' fighting that he could be coiuinced thai he wa> wioiig, and that onl\ 1)\- obtaining independent expert teitim > ly, and inil/ t) e.it ' huinblepie'" The statements of Recei[)ts .uid I'ayments ol municipal corporatit)ns, such as Towns, I'ownships, Counties, nuist be iniblished item by item as the\ .ippear in the cash book every sei)arate receipt of' fsh and |)a\nient of ca>h, .uul the soiu'ce i-ejei\ed from and the person paid to. This i.i i ,dly a iiublicatioi". of the Cash ''.00k. In almost all other corporations simply an abstract of the Receipts and I'ayments is published and the items are not gi\en. The f.rst item on the side of Receipts will be the '' Jnilancc of Cash on hand and in Bank from last Stal: H:nt." .Vtlded to this are the leceipt'; of cash Iron; all sources. On the opposite, or l-Apeniliture, side will bj aU the p,iym_'iUs of cash, and last of all the \^ft\\\ '■^ Bahmce of Cash no;\.< on liond and in Hank." The old balance 4- the Receipts ~ the I'ayments 4- the balanc e now on hand. The accoimt. uit should be very clear on Mils point, especially in making audits. He should bo careful to see that his statement 11 '■ 170 . ■. "' inrliidc'S all the a'Cfipls riml ,ill llir paMiicnls ili;il ilic 'I'lJiisurcr ncconiits for all tliu cash he haiulifd and pindui r> .1 Miiichtr Im- .ilMii-. |i.i\ imiii^. lie sluiuld sec that no vouchers are used iwicr, .md ih.u ihc 'rixM-iirci li;i^ c .i-.h ir.ill\ on h.nid, by actual couni, to amount tf) the halamr nw hand ju r ■.i.iirnirni. The statement shoidd In' rsinv^siHl in lan;;ii i-e >;i plain lh.it every person interested will reajjly understaml il. I >o noi inliodmi andii,i;iions or douiiUiil terms into a stale inenl to cover up any peciili,! paynieMN. All sui li ^l.ilinu'nl^ are iiiunded to evplain the Receipts anil Payments, and nni lo ui\>iir\ ihr rcider .md misK.id him in his con elusions regarding them. The following is a sample sl.iiemeni ol Reieipls .nul r.iynunls. It i^ one i>nl)lislied by a manufacturing company. .01(1 ilu: \.irioiis he.idmg-> muler whnh liic p.iyments .nc classified, arc fixed by order of llie Hoard of Unci U rs ; ONTARIO PEOPLr/S SALT MANUFACTURING COMPANY (Limited). Stntemcnt of licrrl fils mii/ /:'.riirii(l/hiris o/ ('asli /<»■ (In- FiiiiuickiI l'i't(i\ h'lidhi;/ Mriii;i:s. I! Ill mill 'I'liM lll.^lll'.ilici I'ri'uvi ic;.! il^'jiaiis I ) llciil Kstali- l-.',-_'(i7 m ] •.'s (in ."il7 I.". .Mailiimti-y. \(; . I I'Ml ll"i. I l'"llis and Stalioiici V .'I ■ |Mlil.l,' 'I i.i\ . lliii^ l')\|irnMes K\|ni.-i.^ 0''''ly '"1(1 Legal). 'I'li'iiM ;viid Clial.tel.s W.ucs 1 111! ct.iis' and Aiidilor'rt I'V'cs, .\c I'll' I CM iiiid I liHi'ownt. . \l Ml 11 M n I.I i'.H- .Sill II ii.'N tor .Salt li'l I I'roiuissory .Notes) , I'liidd Coal A'^Li'iiiil illie Krsl rost) Cnal I iiloailing Coal l'"r.'iglit ( 'jal l>ul\ and llailior I luis Divi.lcnd .No. 1 at ."> Huhiiiic 1'/ Ciish on haitdand in Bank. 'J/.ISl ,S.S .'in ,11 :il'.i 'HI •_'L'.'i (Ml is;; IS 111 •_'.". 1 1 II.". ();> III •jii II 17 (10 I.Im7 111 ,s|-.> .xt I. "ill ,Sil 1.(1(1(1 (III .~>(l(l (HI l,4(l.S (W i.iiiii ;<;< l,s7(; 10 •Jill I \\-l S-Jll •_'!! 117 lit i,:i77 .Ml %\ l,!i;!li Is !«14,U;«i 48 Comparative Statements. Almost all companies maki' compar.itiw sl.ilemciits, thai is, iluy pi. ice together, tor example, the sales of the last four yens or ilie la>i iwo \eais by months to coin[)are the volume of business, or by idacing louilherilu expense^lora series of years for comparison. For example, in the daih |iapers c\ery moiiili we M.e st.ilemenls of the earnings and ex- penses of the great railway com]).uiies. iii- — 171 CtuniKinitirr Shiltini iit nf h'(irniiii/s, f''.fji5 ,7S,|.i7() I _5.r)7,S,}io .V4o'>>-\}2 5«5-.?'4 ThcaljoM' is a (•,'iilarly counts the pulse of his p.itient and has regard to its strength and regularity always has the condition of his l)usiness in mind and knows exactly how to meet hishiismess iroiihle^. in l.ict he .'nticipales them. lie k nous how lar to go m in his lurchases, and knows luller how far to allow hi-, >,iles on credit to go in safety Ik learns how times and >ea->ons affect his trade, and \ery soon gels to know just aboiu what liis trade will he for a certain month in the \ear. The making of such statements d ()i.'N no t need ,iny speci.d diri'ct Ion. '\\v\ can he made very easily hy any boo k-ki ■per or propneli ir w ho will just go lo the troulile of add- nig his 1 )ooks. Various Propositions re Resources and Liabilities. The following statements of e(jualily helwerii Hie Resources and Liabilities will he found to cover almost all cases that are likely to (mne before the ordinary book-keeper. W'e use the arithmetical signs -t- plus and luinu^ and eipialily to denote the relation between them. The term Assets is used in thi>. connection, as il is shorter and means the same as Resources. Shareholders' View-point. ( I )• Where no profit has been set aside nor c.ipital impaired ; Assets ^ Lidhilities + })(tii/ up (Jdpititl. (2). AMierc surjilus profits have been set aside as a reserve fund ; Assets Liabilities + jxiid up Cd/tital + lieseere Fund. (3). Where Capital has been imi)aired : Assets 4 Iinpuinnent of Capitid -^ Li(il>ilities + paid up Capital. (4). Where Capital has been impaired i)reviously, but now a balance of profits is carried forward in Loss and (lain Account : A.Hsets f luipairnienf 0/ Capital Liabilities + paid up Capital + balance uf prujUs carried in Loss and Cain. — 173 Ml '4: (S)' A cdmpany would lie in-o|\,.iii ffMu ilu' sli.inlioldiTs' view |toiiil wlun iill the paid up cipitid is usrd up ilial i>. \\\wn tlu (irduiarv a>-^i.'ts, isclusisc of unpaid Stock, would l)c iiisuffu-iont lo iiu'ct llic lialiililics. (JrdiiKirif .\s.si/s ini/iiitii 1/ LiitlilllUrs /iiso/rt'tirjf. From Creditors' Standpoint. In tlic followiiij; propdsiliuns tlio ordinary asstls. or ( ' ish a^^fls. as tlu'V .ire soinc- linics called, are separated inun the unpaid < 'apit.d ; (i). Where Capital lias noi Iilcii inip.nnd nor pnili'- set aside in Kcserve I'und : AsHcfH + I'lifuiiil (\i/)ifiil Lliihllllir<. f Suhsiiiht'il (Utitiliil, (2). Where surplus prolits have lucii inadc jnd plarcd in kt->ervL' I'und ; AnHcts ( riijxiiil Caiiihil Litiliilltlcs I Siihutiiltnl C(ifn'/it/ ^ liv- sevi'c Fund. (3). Whcrr the Capital ii.is been irnp.u'ied : Assrtu + I'lifitiiil C,i/,it(il IJiihlliliiH + Suh.srrihi-d Ciipittd IiniHilrmi'tif of (Jdftifid. (4). A company is insui\eni '.nnw a rredilor's standpoint when the liahilities exceed the sinii of the ordinary assets and the unp.iid St(Mk : On/iinirn Assets t I 'iipiiid rii/i/fii/ < \rl htsn/nii,!/ Ordintiry l^iabilitii's. Sundry Propositions. ( I )• Workinj; capital is the a\ailalile iiel worlh of the company. »/. Aaccfs ■ Liiihilifirs \\'iiil:/ii(/ ('tijuhtl. {/'(/. 11/) Cii/Hld/ ^ Acviiiinihtlrd Profils h, )Voi-l\hu/ Cnpifnl nil/ ciiiiiil nr I /'(M)(N).IM) Merchandise Inventory ."iStiO.fMl Personal Accts. Kece.ivable 450..00 LIABll.ITIK.s. Hills Payable 47tH».0() PtMMOMal AieoinitH Payal)le 'J.Si M t. ( )( ) Paid up Capital KMKNI.OU .•*17.")(10.0.()0 Wilson .Manufacturing Co. 's entiy Ni>. Cash Dr. $ 4;t0.t)0 Real Kstate •_MMKI.(HI Hills Receivable •.'(i'JO.OO Plant ()-_'(MI.(MI .Merchandist^ ."),Sti(».(M) Personal .\ccl. Receivable 4.')U.0O To Simcoe Mfg. Co. Ltd. .$17"><)U.(io l'sion .Vccount, or Loss and Cain .\ccount Dr. $2000, I'o Simcoe .Manufactiuing Company $2000. Dissolution of Corporate Companies. Incorporated Companies are dissolved for various reasons : (1) Voluntary Liquidation. .\ company may ha\e been formed for some s|)ecial pur|)ose. When such jiurposc has been accomplished, or when a compan\- lias not been ahir to accomplish its object, generally speakiiig, when there is nothing further to be accomplishec by the orfrani/ation, when it has ser\ed its purjiose it may on vole go into voiiiiifary li(/itiJatioii. (2) Insolvency. When a company has become insohent any creditor may force it iiitii licpiidation, when the provisions of the Winding-up Act will ajiply to it. If I )ominion iiiciirporation then the 1 )ominion .\<:t will apply ; if Provincial incor|)oration h.is given it existence the Winding up .\inted to oversee and direct the \ork (if licpiidation. (7) ri-.e li(iuidators must only do such business as is necessary for the beneficial winding \\\\ of the estate, and not go on in new \entures and speculations on the com- pany's account. (S) .\fter the windini; up has commenced no shares shall be transferred, and if any such transfer shall he allowed the retiring shareholder is not in any way relieved from any liabililx' in respect of .my shares he.held. (9) '.'"he property of the company shall be applied ; olutioii, or (a) In satisfactiun of all ordinary liabilities. (b) In paying the expenses incurred in winding up the company. (c) The remainder, if any, will he distributed among the sliareluilders of the company, according to their resjiective interests. (lo) The li(iuidators may collect all debts by suit at law, or otherwise, sell real or personal property, sell account.s, claims, etc., draw and accept bills and notes, take out letters of administration for estate of any deceased "contributory" necessary lor winding up. compromise with debtors, and all other acts nece.ssary for the benelicial \\ indii g up of the company. (ii) The litiuidator may employ legal counsel to advi.,' and help hiui. lie nuist deposit all sums of $ioo or more in a chartered bank, in his name a.s lu/nidator. m a se- parate account. He must produce the bank pass-book wlien required, and may pay his own expenses as liciuidator and all otb- expenses of li(iuidation before any diIkt claims are paid. He shall not jiurchase any part of the estate for himself. (12) If a lit[uidator ceases to act or dies the "contribulories" will a|)[)oinl aiKHher in his place. (13) When ail liabilities h.'.ve been paid off a general meeting of the '•conlributories," as the stockholders are called, should be duly announced, at which directions may be given to the liquidator as to the distribution of the remaining assets among the "cuntribu- tories." (.•4) Any balance of money left over or unclaimed will be lefi m the bank lor tlnee years to await any claimant thai may give proof of his right to it either in payment of a claim against the C()m[)any or a di^■idend due liiui. .\t the end of three years any balance should be placed in the hands of the Provincial Treasurer if the company is of I'rovincial incorporation, or with the Receiver (leneral if of Dominion incor[)aration. Such sums de|)osited with the Ciovernment should be aecomi)anied by a verified list of tho.se to whom it 's due, as far as can be asi:ertained. Any i)ersnn afterwards proving his right to any portion of such money will receive it from (Ion eminent. For any further points or information relative to the winding up of ( om|ianie^. see Revised Statutes of Ontario ("ap. 183, and Revised Statutes of Canada ('a[). 121) The law relative to the winding up of corporations is practically the same in all provinces and states in America. Winding Up a Company Forced into Liquidation by Creditors. The following is a statement of the actual Assets and liabilities of the Collingwood Manufg Co. (I-td), subscribed capital $10,000. on which there is |)aid uj) $S. 200, leaving $i,>*oo unpaid. The Company is forced into liquidation and J. S. Howes, Ivsq. appointed liquidator. Til' -178- S/. I.IAIULITIHS. ASSISTS. Goods pur inventory . Kcal Kstiitc, \n\v vahiiition Tersoniil Accounts roceivatiK-. I'lills Kuocivalile .... . . . . ( (tliof Kurnituic, etc. . . . I'lijiaid Slock ... . . . . .S|."i(H» ()() . 2(KKI 110 . KiSd (K( . i:«i() (M) (iO (M) lS(Mt (K) fiHMH) (H) nnia rayalilc Mortgage on Ileal Kstate. . Personal Accounts payable .$fi:ilKl INI . KKH) INI . 52(10 00 .'$12500 (HI Tlic forc'goiiiji .statemtMit sliows only $8,400 of .\.ssct.s against .$12,500 of Liahilitits. or 67! if every dollar of the .\ssets were realized, iiefore the liciiiidator does anythiii^ in tiie way of iiusiness he would tlose up the hooks according to the statements and bring down the balances as shown in the Ledger. He would leave the Impairment of Capital in Loss and (lain .\ccount as a debit Ijalance. A (luestion on which the pupil may exer- cise his faculties. I'lom the data ahead)- given above : Show that the Dr. balance of Loss and Ciaiii account wiien the liquidator takes hold should be $14,100. U'e give the wind- ing up transactions regardless of dates : they are the transactions of the litiuidator. ("ash Dr. $900. I'o .Mdse, $yoo. Cash Dr. (1) .Solil the slock of goods at (lOo. on the dollar casii to \V. Urown. {'_') .Sold till real estate to 15. .Mien, Ks(]., for "^'ii-'iOo. Purchaser a.ssunies the mortgage of •Sl.Ollll, as |):vrt i)avnient andgives us his che(|Ue .Mtge. ray. Dr. for balance, $1,0011 | To Real Estate. The mortgage in the above entry being a preferential claim it must tie paid in ful It is therefore assumeil at its face by the [)urchaser without deduction. Cash Dr. .$4,200, To .Shareholders, $1,800, • I Hills Rec, 1,000, ■ ' l'ers..\ cs Rec. 1,400. Bills Payable Dr. $3,150, Pcrs. A cs Pay. !!• 2,600, To Cash, .. 5,750. Collected in cash the following : The unpaid Stock . $1S00 On account of iiills Kec lOOO ,1 1. Personal Accounts Kec 14(M) Paicl to (^reditors the first winding up divi- dend of .")0 in cash, as follows ; Note holders, $.">, |."i(»: and I'crsoiud .Vccounts Payable .'?'2,(i(MI. .Sold the l>alauce of the Personal Accounts Rec. $L'SO. for$L'(i;i: and the balance of Iiills Kec, $;tlio for $."{ii(i : and Olhce Fixtures for .^40 to V. V. Peaice for cash. Paid sundry l)ills of printing, jjostage, and other e\i)ciises, $00. Paid self as lii|uidator foi- si'rviccs. .sl.")0. Paid 1(1 Dividend on Notes, $li.'i(l, and I'.ook .Vcc)uni .S.'iiio, as the la-st wind- ing up divi lend of the estate. There remain now only the '"losing enlrus to be I'ude to clo-e up the books cmii- pletely. It will be remembered that the balance at the debit of Loss and Cain, being the total loss of the capital and the shortage on the assets at the time the li(iuidator icok charge. There ha\e been various losses for expenses, on meichandise, office furnitMre, and the not s and accoui: i. There has been a gain on Real I'^slate of $500, and because Cash Dr. $ 540, 'I'o Personal A cs. Rec. 200. •• P.ills Rec. S(^>o, " Office I-'urniture, 40. I'-xpense Dr. $240, Hi'ls Payable. ^'.50. Pesonal .\ cs. Rec 520, I'd Cash, I 390. — T79 — there are no more assets and nothing to pay with, there will he a gain on ihe i>ersunal ac- counts payable and the Hills Payable- simply because the creditors and note iioklers had to forgive them. The shareholders' accounts are in balance, and because there i^ nothing to piy to shareholders there ceases to be any liability to iheni, so the capital ^tork comes into Loss and Gain Account as a gain, and the boss and dnin Account closes it^elt. The following are the closing entries : LOSSES. Loss and Cain Dr. $I, loo. In case any of the creditors could not be found, the amount i niaile out ol the Re- sources that could be made. The winding-u[) di\identls in this ease would Ik payable to the shareholders and could be very well handled as an ordinary diviileiul in the dividend book, and journalized. Dividend Dr. to Cash, when iluy are paid. Then l)i\idenii .\cct, Capital Stock Account, Reserve I'und Account if there be any, and all the other accoinits would close into Loss and (lain in ,i manner similar to the other company, ami wlun they are all closed the books would be in balance, the Los^ and (iani Aceounl cIom d and everything complete. The foregoing presupposes capital all paid up. .*^uppose we take a case of a loan company we audited for when being voluntaril\ liquidated. ( apital .$[,- 000,000 paid uj) only lo per cent., or $100,000 : paid up ca|)ital im[)aired 5 or $5,000 ; ordinary liabilities all paid and resources all collected and con\erti.tl into c a^h. (1) Capital Stock sulisorijitions are all caii celled, and the liability of tiie sluvrclioliUT.s written off. (2) Paid winding-up dividend ; No. 1 !),') /^ of paid up capital .«!!I."),(MM) in cash. (M) The loss of each shareholder i.s written ort' into Loss and (iain Account, being ."1 of his |iaid up capital. (4i If the impairment wa.s at tlie Dr. of I/OSfl and Gain Account the books would now balance. If it wem at the C"r. of Orgaiii-.iitioii ■ l.C'iint it would be closed into Loss and (lain, luid everything would be in balance. Shareholders Dr. (^5,000, '!"() Ca.sh. <;5,ooo. Capital Stock Dr. 1,000,000, To SluueholdeTs 1,000,000. Sharehol^ler^> Dr. 5,000, To Lt)ss and tiain 5,000. Loss aiul Ci.im Dr. 5,000, To Organization .\cct. 5,000, mmm -— 180 — Various Conditions of Company Organization, and Various Ways of Entering them. 'I'licic arc a great many different conditions under which Comi)anics may l)c or- ganized, most of wliicii van l>e easily managed by any book-keeper who has looked over tile various conditions existing in the two years of business of the Springvale Creamery Company and the year of the Canada (^)uarrying Company, and the season's trade of the Georgian l!ay Transit Comi)any in the earlier pages of this l)ook. We have there eluci- dated the following conditions: — ( 1 ) A Company organized under I'rovincial Legislation : — Part of the Capital taken up and paid for in instalments - (2) Additional Stock taken up, and paid up in full by a transfer of property, the (Coldstream (Creamery Real Instate and Plant part of the property being paid in cash, and part 1))- tiie Company assuming a mortgage that existed against the property. 'I'lic re- maining Stock also being taken up payable in instalments — (3) A Comi)any is organized under Dominion Legislation. .'Ml the Capital is taken up so as to make a close corporation. It is paid up in instalments — part in cash, and part in various ways by Real Estate, Cash, Plant, Mortgage, &:c. - (4) Dividends ha\e been paid. .\ bonus was also paid and returned on Stock as a fourth call. (5) Reserve Funds have been created, &.c., showing how to treat accumulating profits. We will take up a few special cases and deal with them by giving journal entries, so that the accountant may fmd a parallel to almost any case he may have in hand. It will be noticed further on that there are different ways of handling the organiza- tion entries. In two of those previously illustrated, the Capital is taken in part, or all, and paid in instalments^ the shareholders' accounts all being opened in the General Ledger, and kept there until their Stock is fully paid up, in this way treating the unpaid capital >is a valuable resource of the ('ompany as the law contemplates it. 'I"he paid up capital may be entered up in the Stock Ledger either as paid in, or when fully paid up, and the Stock Accounts closed up in the General Ledger. It will no doubt be obvious to the intelligent book-keeper that when Capital is all paid u[) at the time it is taken up, it may be treated in the same way at the beginning, as the Capital paid by instahr.ents is when it becomes fully paid up. In other words, wo may put our fully paid w^ capital directly into the Stuck Ledger, and not bring the share- holder's name into the General Ledger at all, as we opened his Stock Account in ///f General Ledger ami kept it f lie re only while there was something due from him on acminf of his shares. We will therefore adopt the plan of putting the Stock Account directly into the Stock Ledger if all the shares that are taken up are i)aid up in full at the time af their iss'-e. Instead of crediting the shareholder with his payments and debiting him Capital Stock as wc did in the sets worked out in the earlier part of the book, we wili make cash or property of whatever kind received Dr. to Capital Stock, and make the usual entries for paid up capital to the credit of the shareholder in the Stock ]>edger. — i8i — on Stock as a We worked our previous examples suitable to the instalnicnl plan of paying up shares as nine-tenths of our Canadian companies are organized on this condition. It is a fact that very many I.oan Companies and other Financial and Trading Institutions organize with the understanding that only ten, or twenty, or twenty live per cent, of the Capital will ever be called up. The Company is expected to issue Debentures, borrow Capi- tal, and trade and do business on the strength of its credit — on the strength of liability on the part of the shareholders for their unpaid stock — on the strength of the credit of the individual shareholders for twenty-five, eighty, or ninety per cent, of their subscribed stock. The stock that has never been subscribed for or that has been returned to the Com- pany voluntarily by the holder, or that has bceii cancelled by the Directors for non-pay- ment of instalments or for any other cause, is called Treasury Stock. If it ir thought de- sirable to have an account with it, and an account with the total amount of the author- ized capital, there will not be any trouble with them. Shares are not really of any intrinsic value until taken up. See article on Treasury Stock elsewhere in this book. The following twelve propositions or examples for which Journal entries are given, will serve to illustrate the formation of Joint Stock Companies under a great many differ- ent conditions. Such a variety we believe as will enable any intelligent book-keeper to make entries for almost any case that may occur. These propositions are commended to the student using this work, whether he be in college, at home, or in the counting-room ; not for reading alone, but for study, and he is recjuested to construct others for himself, and invited to send any special cases to the author for his consideration and help if necessary. Proposition No. i. Three ranchmen, \V. A. Scott, Samuel Brown and R. J. Doyle, owning adjoining Real Estate valued at $5000 each, and Live Stock $15000 each, are joined by two capi- talists, A. R. Elliott and Thomas Moore, in the consolidation of the ranches and forma- tion of a Joint Stock Company, Capital $100000 in 1000 shares of $100 each, to be equally divided among the five — 200 shares each, the capitalists furnishing $40000 in cash — that is $20000 each. Stock is fully paid up at once, hence the entry following connects Capital Stock with the Working Accounts, and the shareholder's Capital Accounts are taken care of in the Stock Ledger. FOR GENERAL LEDC.ER. Cash Dr. $40000.00 45000.00 15 Live Stock Real Estate 15000.00 To Capital Stock $100000.00 (Explanation to follow here.) FOR STOCK LEDC.ER. I'aid up Capital Ac Dr. $100000.00 To W. A. Scott F<)rranch$5oooandcattle$i5ooo, $20000.00 To Samuel Brown For ranch $5000 and cattle $1 5000, 20000 00 To R. J. Doyle For ranch $5000 and cattle $15000, 20000.00 To A R. Elliott For cash invested 20000.00 To Thomas Moore For cash invested 20000.00 (Explanation to follow here.) !*v:., I — 182 — Proposition No. 2. The firm of Notter & Scott, grocers, (consisting of James Notter and Thos. Scott,) is to be converted into a Stock Comi)any. They are etjual partners in the following assets which are to be taken over by the Company and jjaid for in stock fully paid up. The liabilities are to be assumed by the Company. They are to be joined by (leorge Spragge investing cash $3000, Arthur Priest investing a stock of groceries valued at $2500, and W. H. Manley who gives his note at 1 2 months bearing interest at 5 per cent, for $i 500 accompanied by collateral notes as security — the collateral notes not to become the property of the Company, but to be collected and applied towards the licjuidation of his note. All Stock to be fully paid up and equal to his investment. Notter and as the collateral notes belong to him and not to the Company, it will not be necessa- ry to open an account with them. If it were desirable the entry which does not affect the Capital Stock transactions would be— Bills Collectible Dr. To W. H. Manley's Collateral Account. FOR GENERAL LEDGER. Cash $3000.00 Merchandise Dr. 6500.00 Bills Receivable , 33°-ooo A. B.C.&c. Dr. (personal a/cs) 1500.00 Furniture and fi.xtures 500,00 To Bills Payable $ 300.00 X.Y.Z.&c.(personala/cs) 500.00 Capital Stock 14000.00 (Full exjplanation here.) FOR STOCK LEDGER Paid up Capital Dr. $14000.00 To James Notter Thos. Scott Geo. Spragge Arthur Priest W. H. Manley $3000.00 3000.00 3000.00 2500.00 2500.00 Proposition No. 3. H. B. Harrison, N. P. Horton, G. F. Paine, R. B. Miller, and 1). R. Dobie, form a Real Estate Company, Capital Stock $50000© in 50000 shares of $10 each. They do- nate to themselves 25000 shares each to be paid yo per cent, by organization expenses, and _ iS3 - 10 per cent, each l)y Rca! Instate that llicy transfer to the (Company l)y deed. They ex- change loooo shares at par fully i)aid up for a valuable tract of land owned l)y Alfred Frost, Esq., and valued at $100000, and the remaining shares to be sold in the future at par for working capital. M FOR (IKNKR.M, LKDCER. Real Estate Dr. $ 25000.00 Organization an Dr. 225000,00 To Capital Stock $250000.00 (Explanation to follow here. ) Real Estate Dr. $100000.00 To Capital Stock $ 1 00000.00 (Explanation n' Frost's proj)erty iVc, to follow here.) FOR STOCK LEDGER. ['aid u|) Capital Dr. $250000.00 To n. H. Harrison $50000.00 \. r. Horton 50000.00 ( "i. 1''. I'aine 50000.00 R. 15. Miller 50000.00 D. R. Dobie 50000.00 (Explanation to follow here.) Paid up (!ai)ital Dr. $100000.00 'I'o Alfred I'rost $100000.00 I (l'Ai)lanation to follow.) When the remainder of tiie Stock is issued, the entries will be just such as have been made before in this work. It is needless to rei)eat them. Proposition No. 4. John Parker, J. McLauchlan, W. Robinson, 1'-. Todd and J. W. Rcdfern, known as the Consumers' (las Company, have a valuable franchise from the town of Owen Sound giving them the right of supplying the town and its citizens with gas for 20 years, and a continuance of the franchise thereafter on arbitrated terms. The Company has an au- thorized Capital Stock of $100000 in shares of $100 each, of which $30000 has been taken up by the Corporators, and fully paid up certificates granted them when 50 per cent, was paid up, the remaining $15000 being charged to Organization Account. It was proposed to place on the market $30000 more stock, which was at once taken up at $150 per share — that is $50 per share premium. This premium is sufficient to wipe out the Organization Account. The new stock and premium are paid up in cash. The Stock Accounts of Parker, McLauchlan, Robinson, 'I'odd and Redfern, are all 'n the Ledger already, therefore nothing has to be done with them. If the other $30000 stock is taken as follows, S. J. Parker $8000, W. U. Stephens $5000, Ceo. Ingles $5000, R. McKnight $5000, R. Wightman $4000, R. Edgar $3000. GENERAL LEDC.ER. Sl'OCK LEDOER. Cash Dr. $45000.00 Paid up Cajiital Dr. $30000.00 To Capital Stock $30000.00 To S. I. Parlj^er \^' B. Stephens deo. Inglis R. McKnight R. Wightman R. lulgar $8000.00 5000.00 5000.00 5000.00 4000.00 3000.00 NoTK. It is well to note here that these share- Organization a; c 15000.00 (Explanation.) Note. The 81.')(K)() of piemiiim mi^jlit be ciedit- ed to Premium Account, or Liss and ( iaiii Acoouiit. and the Organization Account be iiUowed to close into Loss and (Jain Account, and bu extinguished at the next general closiiij; of the books. It is ini- , i, ',, 1 i.u -j 0(K)(), and the Prefer Tn W \ Mrf Mrin (V ence Stock in "Preference Capital Stock Ac- '°.,,„; A ^ "^ 1 <;ount " $20000. T, W, Douglas J. Waitcs $20000 ref. Stock) $10000 II 5000 i8S- Proposition No. 7. A Company having a Capital of $50000 all bul)scril)ed and paid up in 500 shares of $100 each, has had its Capital seriously impaired by losses until it is now only $27500, the amount of the reduction of Capital heing in ImpaimiL'tit Account. It is proposed to reduce the Capital Stock to $25000, reducing the shares to $50 each, and leaving $2500 of surplus in Reserve Fund. Supplementary Letters Patent were granted reducing the Capital to 500 shares of $50 each. Make the entries. The shareholders are D. Melville, Ci. P. Creighton, J. C, Ryan, \V, V. Wolfe and l-'red Kilbourn, each holding 10 shares of $100 each. FOR C.KNERAI, Capital Stock Dr. To Impairment Account Reserve Account (Explanation to follow.) LEDCER. $25000 $22500 2500 FOR STOCK LEDCER D. Melville Dr. $5000 (1. P. Creighton n 5000 J. C. Ryan m 5000 W. F. Wolfe Fred Kilbourn n To paid up Capital (Explanation in full to follow.) 5000 5000 $25000 Proposition No. 8. A company is to be organized to manufacture a new style of .sewing machine, the patent of which is owned jointly by S.J. P. 1-cr, W. M. Stephens, J. R. Hrown, James Waites and Alfred Spencer. Capital Stork $1000,000, in 1,000 .shares of $100 each. The owners of the patent become the corporators of the company and take to themselves $60,000 of the stock, fully paid up, in exchange for the patent and a call of 10%, paid at time in cash. The remainder of the shares to be sold subject to calls of 10% payable every thirty days until fully paid up to produce the working capital. None of such shares being sold as yet. The capital being paid up in the organization transactions that concern us here there will not be any necessity for opening accounts in the General Ledger for the in- dividual shareholders. The stock that is to be issued subject to call in the future does not concern us in this proposition. FOR GENERAL LEDGER. Express Sewing Machine Patent A/c. l)r. $50,000 Cash Dr. . . . . 10,000 To ("apital Stock, ..$60,000 FOR STOCK LEDGER. Paid up Capital Dr. $60,000 To S. J. Parker, . . $12,000 II W. B. Stephens, 12,000 II J. R. Brown, . . 12,000 II James Waites, .. 12,000 n .Mfred Spencer. . 12,000 Proposition No. 9. .V Company is to be organized for which it will be neces.sary to secure special Ic^'sla- tion. The Capital Stock is to be $80000, of which $50000 is taken up by the Corpora- tors J. P. Vick, E. H. Newnan, J. J. Douglas, M. Forhan and A. J. F'rost, each $10000, to be paid up as called by tie Directors. A hundred shares of stock fully paid up is given to the President to u.je as he sees oest in the organization of the Company. It is IMAGE Evaluation TEST TARGET (MT-S) ^^ 1.0 I.I 1^1^ 125 It 142 III 2.0 1.8 1.25 1.4 J4 .4 6" - ► .^ ^ V <^ /^ C^^' oS. Photographic Sciences Corporation 33 WEST MAIN STREET WEBSTER, NY. M5S0 (716) 872-4503 t/. \ \ ^ \ placed entirely at his disjiosal, and siil)jc(t to trinsl't-r. Ih may sell it and use the pro- ceeds as he thinks best around li'gislativc iialls. or lie ni;iy transfer the shares direct with- out consideration. The (Corporators arc not supposed to know, and never ask anything about what was done with it. 'I'he President, J. I'. Vick, is to have it for his trouble in organizing. The remaining $20000 of stock to lie reserved in the meantime. The Cor- porators pay in the first call of 10 |)er cent. FOR (lENERAI. l.EDC.HR J. P. Vick Dr. $10000 E. H. Newman « loooo J. J. Douglas M. Forhan m A. J. Frost ti To Capital Stock (Explanation.) Cash Dr. To J. P. \'ick E. H. Newman J.J. Douglas M. Forhan A. J. Frost (Explanation.) FOR THE STOCK LEDGER. In many cases Companies have their paid up Capital, be it 10 per cent., or 40 per cent., or 1 00 per cent., entered up in the Stock I Ledger at once, not waiting to open the Stock [Ledger until shares are all paid up. In such $50000 case the following entry would be made. Paid upCapital .Account Dr. $5000 To J. P. Vick $1000 ' . H. Newman 1000 J. J. Douglas 1000 M. Forhan 1000 .\. J. Frost 1000 (ivxplanation.) The following is the entry for the stock The foregoing entries pertain to the organ-'that is donated to the President for services i/ation of the Company. The entry follow- in organization. It does net differ from other ing is a condition subseciuent of which theP'^'d up Capital entries. 10000 10000 10000 $5000 $1000 1000 1000 1000 1000 following entries will be made. J. P. Vick Dr. $10000 To Capital Stock $ \ 0000 (Explanation.) Organization .\ccount Dr. $10000 To J. P. Vick (Explanation.) $10000 $ I 0000 Paid up Cajiital 1 )r. To J. P. Vick (lvxplannli(»n.) i W'c ilo not insert this [jroposition here to Tecominend the corru[)t us/ of the funds or $10000 stock in lohying around legislative halls, or in any other way. but to give the reader an idea ,„, , , , , , , of how such transactions are covered up, that The above would be a regular entry for,^^. ,,.^^.^. ^^ j^^,^ ^,,^,^j ^^ look for incase Organizatio.1 Account. Some would prefer^j- ^^-^ j^^^.j ,,, ,,^,„j ^^^^ .,„^, ^^.^.^ work, to put It in Commission .Account, or Salary; Account. It might be done by making Or- ganization Account Dr. $10000 To ("ai)ital' Stock, leaving the President's name out en-| tirely. Proposition No. lo. 'i'homas (lordon, Es(i., is the proprietor of a PUTcantilc business that is to be con- verted into a Joint Stock Company, having a ('ai)ital of $40,000 in 400 shares of $100 each. He is to take $20,000 of the stock i)ayat)lc in assets of his business, the company to take over all his assets and assume his liabilities and pay him all that they net the company in cash over the amount of his stock. The other shareholders, John Rutherford, D. Creighton, Jos. Lang, and Jas. H. Little, to take up the remainder of the stock, $5,000 each, and pay it in cash. -I87-- Thos. Gunlons Assetn and Liabilities, Jan. 1st, 1892. ASSETS. Mdse. per Inventory $12,500 Furniture and Fixtures 500 Bills Receivable 10,000 Fcrson.'il Accts. Rec 15,000 LIABILITIES. Bills Payable -$2,000 Personal Acct.s. Pay 2,800 Balance of As.sets over Liabilities. 33,200 $38,000 $38,000 We will first bring into the Ledger the .\sscls and Liabilities of the old business and credit the Assets and charge the Liabilities to Thomas Ciordoii Liquidation A/c. To this account we .vill charge (i) The amount of paid up stock taken by Mr. (lordon ; (2) Any accounts or notes that cannot be collected, and (3) All sums drawn out by Mr. Gordon on account of said assets. The balance of the account will show the amount due Mr. Gordon Irom the company. FOR GENERAL LEDGER. Mdse. Dr. . . $12,500 Furniture and Fixtures 500 Bills Receivable .. 10,000 A, B,C, Pers.A csRcc. 15,000 To Thos. Gordon Liquidation .\c. 38,000 (Explanation. ) Thos. Gordon Liquidation Ac. Dr. 4800 To Bills Payable . . . . 2,000 .. X, Y, Z,&c. Pers. A/cs. Pay. 2,800 (Explanation.) Cash Dr. . . $20,000 Thos. Gordon Liquidation Ac. 20,000 To Capital Stock . 40,000 FOR STOCK LEDGER. Paid up Capital A/c. Dr. $4,0000 To 'I'hos. Gordon, $20,000 II J no. Rutherford, . 5,000 II D. Creighton, S,ooo .. Jos. I-ang, . . 5.000 .1 J. H. Little, . . 5.000 Proposition No. 11. A gentleman, James Smith, proposes retiring from business. The assets of the con- cern are as follows : Real Estate $5,000, Plant $8,000, Mdse. $10,000, Personal Accounts Receivable, $1,500, Bills Receivable $500 —in ail $25,000. There are no liabilities. He es- timates the good will of the bi'sjness to be worth$5,ooo. Five of his employees, A.B. Dick, W. J. Shean, Jno. Wright, D. K. Duncan and Chas. Kramer, incorporate as the James Smith Co. Ltd., capital $30,000. They each take $5,000 stock and pay $2,000 cash down. They take over Smiths assets as above valued, paying him $10,000 in cash and the company's note for $15,000, and issue to him $5,000 of stock fully paid up for the good-will of his business. .^s this stock is not fully paid up it will be put in the General ledger. |v :t)'i .. . — i88 — FOR C.ENERAI. LRnClER. A. H. Dick, Dr. $5,000 W. J. Shean, « 5,000 John Wright, " 5,000 D. R. Duncan, -. 5,000 Chas. Kramer, « 5,000 To Capital Stock, (Explanation.) Cash, Dr $10,000 To.\. B.Dick, II W. J. Shean, II J no. Wright, " D. R. Duncan, II Chas. Kramer, (Explanation. ) Real Estate, Dr. $5,000 Plant A/c. M 8,000 Mdse. II 10,000 A,B,C, I'ers. A 'cs. Rec. n 1 5,000 Bills Rec. 11 500 To Bills Payable, II Cash, (Explanation.) Ciood-will Ac. D. $5,000 To Capital Stock, (Explanation.) 25,000 2,000 2,000 2,000 2,000 2,000 15,000 10,000 5,000 FOR STOCK LEDCRR. Paid-up Capital Ac. Dr. $15,000 To A. h. Dick, II W. J. Shean, 11 J no. Wright, II D. R. Duncan, 11 Chas. Kramer, II James Smith, (Esplanation.) 2,000 2,000 2,ooo 2,000 2,000 5,000 This good-will of business is valuable. It might be charged to Organization Account or Loss and Gain Account, or any such account, to be wiped out by profits in the future. Proposition No. 12. A company having a paid up capital of $20,000, consisting of 400 shares of $50 each, being the entire authorized capital, apply to the government for Supplementary Letters Patent, granting them an additional authorized capital of $30,000, in all $50,000. The shareholders and their holdings of stock are as follows : (leorge liberie, $6,000 ; Thos. Yickers, $4,000; Joseph Pratt, $3,000; A. J. Creighton, $3,000; J. F'. McCallum, $4,000. Fhey have a Reservo fund equal to their original capital, and propose to donate to tlie original shareholders 400 shares of new stock, and pay them up by using up the Reserve fund, there- by wiping it out and giving each shareholder as much new siock, fully paid up, as he had of the old, the remaining 10,000 to remain unsold for the present. FOR GENERAL LEDGER. Reserve Fund Ac. Dr. $20,000, To Capital Stock, $20,000. Explanation. FOR .STOCK LED(;ER. I'aid-uj) Capital, Dr., $20,000, To Geo. Eberle, $6,000 II Thos. Vickers, 4,000 '■ Joseph Pratt, 3,000 II A. J. Creighton, 3,000 M J. F. McCallum, 4,000 i89 — After some time iIh- 'I'cii 'riiousaiid Dollars of capitol unsold (Treasury Stock) it sold at $80 per siiare of $50, i)eing at a pniniuin ol sisty per cent., and is paid u|) as once in cash, tlie purchasers i)einn A. M. Steplieiis, $6,000, and ( '. M. i,.iii^', $4,000. roR (;i;xKkAi, i.kdc.kk. Cash, Dr., $16,000, To Capital Stock, $10,000 M i'remium A c., 6,000 I'OR SiOCK l.l.ixiliR. Paid ii|) Cajiital A c., Dr., $10,000, 1(1 A. .\l. Stiplien^, $6,000. It will be noticed that the premium paid is credited to i'remium A c., and is not put into Capital Stock in the (leneral i.eduer. n(M- i nto tiie Slock i.ed,m.r in either the I'aid-up C!apital A v. or to the credit of the intli\ iilual shareholder who paid it. It is the honus the new shareholder pays for tile i)ri\ ileu'c of sharing pmlits in .1 |)ayint; concern on eijual footing with those who worked up a |)ayinj.; trade. Bonds or Debentures. Honds or debentures are the '■ wrilien promises to pay " of Joint Slock Companies and societies, or of corporations, s-icli as Towns, Township^, \illa14es. Counties, ire nij;(itialcd for ,1 siiorl time llicy are usually , „ jrporations, s-icii I'rovinces and Nations. W'lieii loans a I'rovinces and Nations. Wlien loans are ni-^dti.ilcd for ,1 short time iluy are usually made on I'ro'.r.issory Notes, and are usually known as lloatin- liabilities, but when for a long time it is made on Honds. otherwise called d'bcntuiv The I'.onds are of two kinds ; { I ). Coupon lionds. 'I'liese art' luj^oti.ibli' instrnim lUs. usu.illx ii.nable to to which are attached usually two interest (oupnns Inr tach \car the bond runs coupons are promises to pay half-yearly interest. (2). ReL;islered iJonds. These are yeiuniUy non-negotiable or negotiable by assign- ment, and a transfer is recorded in the officL- of the company or corporation. The name of the owner is recorded in the books of the company or corporation issuing the Bond, and he collects, personally, the inliresi .it stated limes bv applying lor it at the head nt'fice. * Bonds are fre(|uently sold in England or other old countries where UKyiey i.s plenty and seeking investment at a low rate of inierest. .Money is borrowed by Railway Companies to invest in- roails and rolling stock, with the e\pectatioii of creating an annual sinking fund from the earnings of the (ompany \o retire tlie ears, charging $100 each year against the Profit and I.oss .\ciouiit, to eciuali/e the loss with the earnings of the money. Investors in Bonds and Debentures, [Entries for]. The purchaser would somctimrs make entries for premium and discount the con- verse of those of the seller. .Suppose the $20,000 debentures are purchased at a premium of 4 i)er cent., or $800. the entry would be ; (i) Simcoe Debenture Account, Dr., $2c,ooo, Premium Account, Dr., 800, To Cash, $20,800. or (2) Simcoe Debenture .Account, Dr., $20,800, To Cash, $20,800. In entry No. 2, the account is kept for the market value of the Bonds, and if the Bond matured in ten years it would be a proper precaution to write off $80 per year to Profit and i.oss, . -IS all the debentures will bring at maturity is $20,000, and when the investor paid this premium he would calculate that the annual interest was higher than he — IQt — required on his investment, and that a portion of iliis annua! iiUcnst would ^n to nuike up the capital invested in premium, and tlic balance for the iiitcrc^^t, as the rcil prire received for the use of the money investment. If the debentures were hounht at a (hscount, the chief cauNO of the lnw pri( e paid would be a low rate of interest, that is, tht; intert i . lipulated in the ilebentuie would be considered insufficient for the use of the money invested. If .fjo.ooc were bought al. 5% discount, for $iy,ooo, running ten years, tiie entry might be made ; Siincoe Debentures, Dr., $Jo,ooo, To Cash, $iy,ooo, u Discount, 1,000. The above entry keeps an account with the liiind? at the par value, .mil the Discount account mi'^ht 1h" closed in'o Loss and (lain, or tin; account wiped out in ten annual sums of $I03 each, by closing I'reniium a/c. into Interest a/c. for that amount each year. or .Simcoe Debeniiires, Dr., $iy,ooo, I'o ("a.sh, $11), 000. In llie above entry the DelnnUirc a c. keeps a record of the C(»i, 01 ni.irkel v. due, of the Slock. As $20,(HK) v\ill lie received tor tliesc ilciicnlures in ten years lliej will In-come, roujjhiy speaking;, $100 more valu.dile each year, and an entry, cllar^;in^; the 1 )clienliire a c. each year with $100 interest, would rej;idaie llie \ahie of the debenture and give u> the profit aiuuially as earned. Bondholders vs. Shareholders. (i). A houdhohlvr is a full creditor of the (■om|)anyor corjajration isMiing the Bond or Debenture. (2). He has no vote or voice in tlie managetmnt of the i ompany. (3). The company's liability to him is a terminating otu-. He holds the 1 ompany's promise to pay the amount due at a certain titne. (4). If the shareholder wants his money he gets it at the maturity of the bond, or he can sell his Bonds. (i). 27i<' Shareholder is a partner forall practical purposes, and the liability i^ not a terminating one : (2). He has a vote in the control and management of the company. (3). The company's liability to him is not terminating — there is no promise to pay held for it. The company's liability to hitn is what is called a proprietory liability. (4). If the shareholder wants to get his money out of the coni:ern he mii^il sell to sotiie one else, and transfer his shares to them. It will be noticed that it will be more ailvantageotis to a cotnpany to sell (juaranteed Stock in England than debentures. In each case the interest lias to be paid — the one is tetnporary, borrowed, repayable capital, the other is permanent capital. iit' si .7 li Itil — 102 Stock Issued to Replace Debentures. It lias l)ecn sliowii that it is more advantageous to a Company to issue stock either preferred or guaranteed, than to issue bonds. Hut it is on!' after a Company becomes known, that it can place its stock successfully on tlie niarket. Companies are usually forced in their early history to issue dei)entures or bonds, and when they become well established they lake up the bonds and issue stock in their i)lace. The mandatory liabil ities l)ecome proprietory liabilities, The creditors become partners, relieving the Com pany of the necessity of constantly tloatiiig their new promises to pay on the money market. Directors for Prestige. In several Companies where we have audited, we have found prominent persons as shareholders who simply lent their names to the Company to give it prestige with the pub lie. 'I'hey did not pay anything for their slock, and never intended to. They did not pay anything for stock nor recei\e(l anything as dividend, .\nolher case we noticed where shares fully paid up were d(jnated to [jcrsons of high I'mancial standing for the u.se of their names. Divideiuls were paitl on ihese shares ihe same as others. 'I'here is still another way to get " high falutin " Direeilors and Siiareholders, that is to pay them a stipulated sum per year for the use of their names. 'i'his practice is not i-ommon in Canada. It has obtained considerable footing in (ireat iiritain and the United States. Founders' or Corporators' Shares. It is bad enough to pn-iure names of distinguisheil persons for jirestige by giving them stock or hiring them, but infinitely worse for corporators to set aside certain shares for themselves, on which they apply all ])rolUs over a certain spetifieil rate per cent. Kor example : Supjiose the ordinary stock of a Company paiil uj) was $30000, ami the profits were $5000. If they declare an S per ci'iit. dividend amounting to $2400, and place the remainder to the credit of their indefinite number of I'ounders' Shares, or pay it out as dividend on the i'ounders' Shares, the number of which is not generally known, and in which nothing whatever has been invested. They simply take this atlvantage over those who come in later and capture all profits over a specified rate as the price of their shrewd- ness in incori)orating the Company. Entries for Transfer of Shares Not Fully Paid Up. Supi)ose James Caton is a sharehokler holding ten shires of the value of $100 each, in all $1000, on which he has i)aid uj) 60 per cent., or $C)oo. He sells them to Ceorge Meir, and the transfer is made. The sharehoklers" accounts are in the (Jeneral Ledger. Hefore the transfer is made Caton's account will be debited with $1000 subscril)ed capital and credited with $600 jjaid up. When the transfer entries are made, Mr. Caton's account must close, and Mr. Meir's be in the same condition as Mr. (baton's was before the transfer, \'\/. , $1000 on Dr., and $600 on Cr. side. Ceorge Meir Dr. $1000 i James Caton Dr. $600 To James Caton $1000 ] 'I'o Ceorge Meir $600 This entry transfers the Subscribed ■ This entry transfers the paid up .stock Stock from Mr. Caton to Mr. Meir. j to Mr. Meir. When these entries are posted Mr. Meir"s account will have a correct show- I ing, and Mr. Caton's will close — I fll'ii' I imti--] (2) J'.y having the Trial Balance of a former month right along with you the finding of errors is greatly facilitated, and when errors are not nude by leaving out amounts the mental comparison with the former month when putting it down will often discover a error before it is entered in the Trial Balance, thus saving much time. ■ ' ' ' ¥. 'I :i) V 194 YEARLY TRIAL BALANCE OF THE LEDGER Folio 3 7 8 36 74 121 16 2 204 300 Namk, •lANrAKV. Dr. (r. I 991 03 Capital Stock Loss ;iik1 (lain Reserve I'liiul Deposit Accounts Cash Discount IJills Receivalile 7957 10 Protect Fees 'I'raders' IJanii I 00000 00 I 501 55' "J0755 '"'.^ 286397 42 I 5'8 14 "34 5» 4472 00 Fkiikuary. Dr. Cr. 'J9' 03 1 00000 00 501 55 192751 02 287';()3 64 496 I 2 877S 29 134 5' 4472 00 March. Dr. 295863 69295S43 69 297859 08297859 08 Cr. Ncri-:. Tri.d l(alat«f I'xioks uf tliis kini) i.'tn Ijt- hrtd troin the Author. I'he fdregding foini of ('oritinue.l Tiiai ISaiance is lor twelve months. My having each alternate leaf cut short in the Trial Balance liook, so that when the short leaf is turned over the n nie and fiolio are vi^>il)le. there will he auii)le room far three months on each i>.i,ue, anil on tlu' left side of the w ide i)a,ue the folio and name are Ibuntl, and on the fight sitli' of the other widr [jage is another i-ohnnn for remarks or names, as the book- kee|)er sees fit : we siii;,L;i.st the names of the accounts so as to save tracing the name through from the left side, and to facilitate the tracing of such lint;s easily we sug- gest that in the ruliim from left to right across the pages, they he alternated red, blue, and purple, or at least two colors should be used. 'I'hen in the dollars and cents columns, each month should be se[)aratetl from the succeeding one by a heavier or stronger colored line and there should be unit lines ruled faint ui all dollar columns with the one sep- arating "hundreds " from thousands a little brigliter, or a slightly different color, so as to facilil.ite the putting down of the amounts. Carr;, ing Forward. The Trial balances in many houses are very long. Wc recently audited for a house where the Trial ISaiance occupied oxer seventy pages, each sixteen inches long. We sug- gest that where such Trial balances are long that the footings />e not carried fortvard from OF FOR THE YEAR 1892. •95 1 97 April Dr. Or. Mav. Ji<-.. ,.t.p,w ,._, ...,^ v^ ....... ......V p, ..,. ......... w.^ ...ick. W'licii all llic (la^^es have been added up and carried each in total to the rescr\ed paj^es at the end of the hook, then add up the.se (one or more pages of totals) to get the "(Irand Total' of the Triai I!al- ance. The advantage of this way of doing the work is this, that if a mistake has been made in any i)age, the footings of only one page will i)e affected, and these can easih he corrected, both in the l)age where the blunder was made and where it is transferred for .adding up again. If the amount is carried forward for fifty or eighty pages, and an error were made near the beginning, just imagine the work and annoyance of correcting the figures carried forward at the bottom and top tiiroughout the whole lf)t of page>. What a Trial Balance Will and Will Not Prove. The foundation principle in Double ICntry is that the debits and credits of eaih transaction are equal in amount. This being true when the sum of all the debits is found, it should be equal to the .sum of all of the credits. If equals be added to cijuals the wholes will be equal. If a Trial Dalance has been dr.awn off, and it is found in equilib- rium what will it prove ? It will prove that of certain transactions that have been jour nalized with equal debits and credits and posted to the Ledger, the debits to the debit side, i' ' It"' •'■PI J' «! fi 'i i<<4 11^6 Folio 3 7 8 36 74 131 ao4 300 Kamr. Capital Stork Loss and (lain Rcscrvr I iirul iK'posii Accounts Cash Discount Mills Ki'ccival)lc I'loti'sl I'Vcs 'I'railcrs' liank YEARLY TRIAL BALANCE OF THE LEDGER Jn v. Dr. Cr. AlKlDHT. Hki^kmiikk. Dr. Cr. Dr. Cr. ~Noth7 Trill BalaRCt Bookt of Ihii kind nn.lw hiH frnm rh« Author. NOTR. •! The fori'going form of each aliirnatc leaf cut ^liori in the 1 rial Halance liook, >o tiiat wiien the short leaf is turned i)\er the n mie and lliilio are viiihle. there will lie ani|)li' room f,)r tlirec months on caeii page, and en the left side dI the wide iKigi- the folio and name are fuuntl, and on the figlit side ol the other wide page is .uiotlur icijumn for remarks or names, as the hook keejii-r sees tit : we suggest the names of llie ae<:oimts so as to save tracing the name ihiough tVom the left si(k'. and to facilitate th-' tr.icing of such lines easily we sug- gest tJKU in tile ruling from left to rigiu .11 ross ilie pages, tiiey lie alternated red, hhie, and purple, or at least two colors should he used. i'hen in the dollars and cents columns, each month shotdd be sejiarated from the succeeding one 1)\ a heavier or stronger colored line and tlure sluadd he iniit lines ruled fiint in all dollar columns with the one sep- arating "Inuulreds " from thousands a little brighter, or a sligiitly iliffercnt color, so as , ■ facilitate the putting down of the amounts. Carr^ ing Forward. The Trial lialances in many houses are very long. We recently audited for a house where the Trial Balance occupied over seventy p.ages, each sixteen inches long. We sug- gest that where such Trial balances are long that the footings /'C not carried foncard irom HE LEDGER | ^r FOR THE YEAR 1892. •97 DoTOBKh. NllVKMMIH. |)Kl KMIIKU- Dr. Cr. Dr. Cr. Dr. Cr. Folio I Nmnr or Iti'iiiiirk". page to page, hut that a low pages at the end of tlie liook he reserved Inr smniiiiMj^ upon. Add cxch page hy itself aud carry to the suniniiiig up part at the hack. Wlun all the pages have been added up and carried each in total to the reserved pages at the end of the hook, then add upthe.ie(one or more i)ages of totals) to get the '"drand 'I'otal ' of the i'riai l>al- ance. The advantage of this way of doing the work is this, tiiat if a mistake has lieen made in any page, the footings of only one page will he affected, anil these can lasily he corrected, hoth in the I'age where the blunder was made and wluTe it is ir.ui^tcrred for adding up again. If the amount is carried forward for fifty or eightv |>ages, ami an error were made near the beginning, just imagine the work aiiits and creilils of each transaction are equal in amount. This being true when the sum of all tiie debits is found, it should be c(iual to the sum of all of the credits. If tquals he added to equals the wholes will be ecjuai. If a Trial IJalance has been drawn off, and it is found in e.iuihb- rium what will it prove ? It will i)rove that of certain transactions that have been jour nalized with equal debits and credits and posted "^ the Ledger, the debits to the debit side, ^.-■■f^ — 198 — and tlic credits to tlu' crodit side. It is sinv.'y a lost that certain transactions that have been p.jsted h;ue l)ceii t.iken la the correct side of the Ledger. It is simply a book keeper's check as to his posting. U'e liave met many men higli up in corporate concerns — Managers, Secretaries. 'I'reasiirers, 1 )irectors. i\:c., who imagined that a Trial IJalanre was a test of every error, mistake and wrong entry tliat could be made ; that it was a safe- guard against every kind of |)er\ersion and deception that could be practiced on any set of books kept l)\- Double ilniry. \\'e remember well of a case where we were called to act as special .\uditor to investigate the accounts of a Company's book-keeper who seemed to be living above his income, and whose end)e//lements of cash at the time really ran into the thou^:uuls. We hid made a hasty examination and reported the result to the Manager who was Secy. Treisurer of this and anotb.er ('ompany, anil President of a third at this time. He charged the book keeper with the embe/zlement in his private oflice. The book-kee])er [iroiluccd his Ledger and the Trial llalance, and got the Manager to check it with the Ledger antl add it up to [)rove that he had not done anything wrong, and in half an lioui hatl the Manager convinced that he was all right with the Company. It was only after another half hour's explanation that we jjcrsuaded the .Manager that the Trial lialancci being in e di,l not oatain hundreds where Cash Accou.it called for thousands. Tiie (] lestion naturally arises, W'iiat errors in Double Entry will a Trial Hal- ancc fail to indicate ? ([) It only prove-; tliat the transactions posted have bjcn placed on the projier side of the Leilger, and not that the items were posted to the right account. For example, you should, according to .1 certain Journal entry, debit Oliver IJrown with $10 of goods. Su[)[)ose you by mistake make the entry on the ilebit side of Henry Adair"s account. The Trial Italance would balance just as wtll when bjth accounts are thus incorrect as if it had been pt)ste(l correctly, .\dair is $10 too gre.it on the Dr. side, but Hrown is $10 too small on the same side, hut tiie b.dance is not disturbed. (2) Suppose that ni jiosting \()u leave one, two, three, or a do/en or more transac- tions unjiosted. The Ledger will balance all right if you leave any number of them out, so long as \()U jiost e\ery transaction that you begin at. 'l"he Trial Halance will be in balance if only one, or two, or three, or more, transactions have been posted. A hundred of them, or any other nmnher ot them may be omitted without disturbing the equilibrium of the 1 .edger. (t,) \'ou may i)ost one or two transactions twice, or several times, if you like. It is only adding lyun/s to <,/ua!s. and the svuns will of course be equr.l, and thus your Ledger might beipiite inaccurate in its aicounts, and still not give any indications of the existence of such iraccuracies by being out of balance. (4) Transactions might be put down in the Day-liook or Journal that never were entereil into by the parties. So long as a Journal entry was made having an ecjual del)il and credit, and tliese deliits and credits were posted correctly, the 'Trial llalance would gi\e no indication of such fictitious entries by being out of balance. i:l — »99 — (s) Suppose that either accidentally or purposely one or more transactions that ivere done were not entered in the Journal, anil tliorefore no record of them reached the Ledger, their absence would not disturb the beautiful harmony that existed between the debit and credit sides of the I.cd^'or and Trial balance. (6) ICrrors are freiiuently made in computations in the Sales-Hook, Day-Book, etc. Suppose 1. V an error in multiplic.uion, an item in the Sales-Hook \vc"" carried out too great or too small ; or suppose an error were made in con-.puting interest, or anything else, the Journal entry would be mad: with an eipial debit and credit, though the debits and credits might be too small or too large by a very considerable amount. The Trial Bal- ance will take no cognizance of Ihcse tilings, and may appear beautiful to thceyC of the book-keeper by having a perfect cjuality in sides, and \et underneath may be hidden a mul- titude of errors. 'i'hese are the principal classes of errors that the Trial Balance will not help to detect. There may be combination^ of circumstances that may arise that will not affect the Trial Balance. Two, or three, or four errors may so combine that the sum of the errors on one side may be e(|ual to the sum of the errors on the other side, and thus leave the totals eipial, though (juite incorrect in detail. 'i'liis last is not a common occurrence. We have only chanced on such combinations of errors three or four times in our experience. How to Find Errors in Trial Balances. '% It is existence \'our Trial Balance is " out," so to speak, and what are you going to do about it ? How can it be corrected ? How are the errors to be located ? Which side is 'out,' or are both sides incorrect, and if so, how mucli ? If only one side is incorrect the difference between the sides will be the amount of the error, the .sum of the errors, or their difference. If both sides are inconect, theie must at least be two errors — there may be more — the diff-.'rence between the sides may represent the sum of the errors or their difference. If the books are arranged so that the totals of the business can be kept as a little side record, on a slip of paper or otherwise, as explained elsewhere in this book, then we can, with a little calculation, ascertain what tne footing of the Trial Balance should be. In this way we can tell w'aich side is wrong, or if l)oth are wrong. \\'e will leave further discussion of this part of the topic to be dealt with in the proper place, and now proceed to deal with books that have not had any special arrangements for making tests. We will suppose, however, that the journal has been added up to show that the debits and credits of the Journal entries are ecpial in amount. I. Looking for the Amount of the Difference. We will find the difference between the sides of the Trial Balance and look through the Journal, Cash Book, etc , for this anidunt. It is perhaps left unposted. This failing, we will try a second test. 2. Something Posted to the Wrong Side of the Ledger. If the difference between the sides is divisible by two (2), sompthing may be posted to the wrong side. This will always i)roduce an error in the Trial Balance that is divisi- ble by two. We would take hall the error, and scan the Journal, Cash Book, etc., for mt 1 H i' i ; » I;; i-\ ,J.; — 200 — such an amount. This test of the dividing by two is not very much use, as any mistake where the amount of the error is an even number will lie divisible by two. Hence, it only gives a suggestion that perhaps an amount way be posted to the wrong side of the Ledger. 3. Comparing Present and Previous Trial Balances. One of the earliest precautions that should be taken with a Trial Balance that is "out" is to compare it carefully with the previous one, item by item. If anything is left out, or placed on the wrong side, it will usually be discovered as you carefully scan the accounts and compare with the accounts that were correct a month ago. It will often occur to the book-keeper's mind that an account is wrong when he sees it, in comparison with its standing a month ago. He will remember a transaction that occurred since, and on looking up will perhaps find that identical item unposted. The use of ones eyes, and the recoUective faculty together, will often strike an error almost at first sight when care- fully and considerately comparing the present with the former record of the accounts. 4. Errors in Addition ; the Carrying Figure. When the difference between the sides of the Trial Balance is i, 10, 100, 1,000, ii^ III, or some such number, the error is generally one of addition— the carrying figure is frequently the cause. A column of figures foots up to 1 10 — there is a great danger of putting down o and carrying ten. If any such error as the above occurs, we would add both the Trial Balance and the Ledger accounts, and would likely find it. 5. Errors in Addition in the Cash Book, Sales Book, Etc. There is another class of error in addition that fre(iuently gives trouiilc ; that is, an error in the addition of a Cash Book, Sales Book, or any other book where Totals are posted. 3o, errors in addition may be in any such book, and the Ledger additions be all right. Such an error would produce an tou-^ua/ debit in what might be called a very large Journal entry, as the entry in a Cash Book or Sales Book is simply a comprel'ensive Journal entry, taking in the business of a day, a week or a month in a total to one particular account. .Accuracy in addition is a first essential in book-keeping, and although this is the first arithmetical rule that we karn in childhood, it is generally so imperfectly learned that comparatively few are sure in addition. 6. Posting Separately the Month's Business. Another phn is resorted to when others fail, sometimes we have used it a few times with good results where the business was not large. Take a large sheet or two of paper and open a space for each account, and post the business of the month, add the amounts of the I)rs. and Crs. of each account to those in the last 'Irial Balance, and thus get an independent proof of every account. The error will soon be discovered in this way, though it entails considerable unnecessary work. While this one is put here as No. 6, it is not usually resorted to until the checking mentioned in No. 9 has first been tried. The checking usually finds the error, therefore this is little used. 201 7. Transposition of Figures. If the diflerence between the sides is divisible by nine, there is a probability that there has been either a transposition or a translocation of the figures in some amount. A /r(7«jr/r7«Vw« of figures would l)e such as this: \'ou are posting $187, and you by mistake write $781 or $817 or $871. Find the difference in any one of these transposi- tions and it will be divisible by nine, leaving no remainder — 781 - 187 = 594H-9 •=66. It is impossible to find out in ail cases the number that has been transposed, though rules are frequently given that give the number. Case a. Suppose an error divisible by nine is found in the cents column only — take for example 63 to be the difference, 63-^9 = 7, which is the difference between the figures transposed, therefore 7 and o, and 8 and i, and 9 and 2, are the only pairs of figures that have 7 for a difference, therefore the ^lumber was 07 or 70, or 81 or 18, or 92 or 29. Case b. If a transposition lias been made that does not affect one or more figures at the right-hand side of a number, the amount of the error will contain a cipher at the right-hand side for every figure at the right-hand side of the number that was not affected by the transposition. For example, if $7136 were put down $1736 the error would be $5400, that is, a cipher in the en or for every figure at the right side not affected by the transposition. Case c. Suppose an error affects three figures in such a way that the middle figure of the three remains in its place, thus, 946 is written 649. In such a case as this the middle of the error is always 9. 946-649 = 297, reject the 9 and take the other two figures in their order (27), divide by 9 and the (juotient will be the difference between the figures transposed — 27-^9 = 3 ; the figures transposed were 6 and 9, the difference being 3. This 3 would also stand for transpositions of o and 3, and 1 and 4, 2 and 5, 3 and 6, 4 and 7, 5 and 8, as well as the one it happened to be. Table of Transposed Numbers. ti^SI DIKKER- ENCES. 9 18 27 36 45 jio 1 01 f 20 (02 /30 {03 f40 1 04 (SO 54 )o6 21 32 43 12 23 34 3' 42 53 13 24 35 41 52 63 14 25 36 51 ''2 73 15 26 37 61 72 83 16 27 38 71 82 93 17 28 39 54 65 76 87 98 45 56 67 78 89 64 75 S6 97 46 57 68 79 74 «5 9^' 47 58 69 84 95 4« 59 94 49 This '{"able will be found u.seful in hunting up errors causetl )))■ transposition of figures. I'"()r example, if the difference between the sides of a Trial Balance is 9 it would be occasioned by any one of the nine pairs of numbers being transposed — the lower one put instead of the upper one, or the upper one in place ot the lower one. This is ap[)lieahle whether such transjiosition occurs in the units, tens, hundreds or thousands columns, or in the decimal part as noted under case (b) in the '[uotient, when divided by 9 for every figure to the right of the part transposed, whether whole numbers or decimals will be ciphers. The differ- ences occasioned by a transjiosition of figures keep on increasing by nine, so that, with a little trouble, all the differences produced in sums up to $100,000 could easily be written out. They consist of every w « i 5, (70 81 92 •* \o7 18 29 72 /«°9T '' \o8 19 81 /90 . 1 09 ■ 202 — ninth number, hoj^inning with ninr. Almost all differ- ences above 81 (9 x c;) arc caused by translocations of figures, and tiic number so translocated is found by dividing b .line, etc I 100 <>') ) 100 (001 loS , I 1 20 M ',^ I -'6 I '40 I '4 etc, 5 ; 8. Translocation of Numbers. Following is an example of /rrt/zi/wrt/zV)// . \\n\ aic posting $72 and you actually post it 72 cents, or you are posting 24 cents ami l)v mistake you write it 24 dollars. The amount of the error produced by such transiucation of figures is divisible by 9 thus- - 7200-72 = 7128-^9 = 792. If wc will divide this numlcr by 11 we will have the numi)er translocated, 792 -f- 1 1 == 72. .\s translocations almost always occur in .putting cents (2 figures) in the dollars column, or a numbei of dollars, consistinj; of two figures, in the cents column. The amount thus translocated can abvays i)c found by dividing by 99 (9 X 1 1). Suppose 37c. were postetl as $,',7 the dinertiice, $^7.00 - $0.37 ^$36.63^ the amount the Trial Ha'ance would be out: $36.()3 -^ 99 - 37, tiic number located in the wrong column. Another method to find the number transloca cd is, reject the cents in the error and add one to the dollars and we liave the amoimt. $3fif)3 is the aniouiit of the difference in the above example ; leave off the cents ar.d we have 36. add i (3^)-!- i) = 37i the amount that was placed in the wrong column. Case a. The translocation being only puslicd over one figure : If $2.50 were posted as 25c. the difference produced (the crroi ) would be $2.25; divide by nine (one nine) and we have 25, the figures that were pushed o\er one place. Case h. The translocated amount i)eing pushed over two places : This is really the case siiown in the first example under the iieading of translocation, where dollars were put into cents column or cents |)ut in as dollars. However, to show that it will work where more than two figures are ])i'slK(i o\er either right or left two places, we take $26500 posteil as $265. Now, 26500 265-26235-^-99 f fivo nines) = 265, the number translocated. Case c. Where the translocated number has iieen pushed o\er three i)ljces : Suppose $62000 were written $62, tiie error produced would be 62000 - 62 = 61938. Now, divide this by 999 (three nines ) and we have the iiumiier translocated — 61938 -i- 999 = 62. We have now sufficient examples to state a gener.il rule : Divide tlw error by ns many 9's as the, amount teas trmis/ocaled, mit that this is not a $5 transaction at all -it is an $85 transaction, and you really part with one note and receive another, and this should be represented at least by such an entry as. Bills Receivable Dr $85, To Hills Receivable $80. '1 Interest 5. But we would go further than this. It is really a transaction in which Mr. \V. Johnston is concerned, and we lay it down as a princi|)le that all transactions in which a person is interested should appear in his personal account, hence we think it better to make two en- tries in such a case as this and run it through .Mr. Johnston's jjcrsonal account : — W. Johnston Dr. $85 and Hills Receivable Dr. $85 To Bills Receivable $So To W. Johnston $85 Interest 5 This really shows the business you ha\e done with him, and nine-tenths of the business men of our towns and cities will i)ear testimony that this is the really correct method. The only man who will run foul of this style of entering up, is the tlicoyetUal man who hag had neither practical experience as a business man, a hook-keeper, or an auditor. Another example : A man comes in that you have an open account with. He makes a bargain w' n you— -say that he buys a stove at $,50, and pays $20 down on it — $12 of it cash, and a.i old stove for $8. To sa\e time the book-keeper charges the customer with "balance on stove $10." This kind of an entry does not represent the tran.saction. The customer should A; debited loith the stovj at $J0, and credited jvith the actual commodities he Unit Lines. J07 '!,■*■ TIk' line liiu'> in tlic dollais ((.luiniis of this ruled iKipcr, arc called unit lines ; mj (ailed heciuise they separate each figure from the one next it These h'nes keep the figures nicely under one another, so that they both look well and add easily. There is no necessity to enter into details of the benefits derived from the use of these in all books, billheads, statements, rejiorts, ,W.., where (|uantitie.<, have to be added. The author was ,;/ /(Y7^/ one of the first to introduce these unit lines into books. It was only after con- siderable grumbling that the rulers in two of the largest RIank-Iiook Houses in Toronto could be persuaded to rule some books they were manufacturing to his order in this man- ner. They complained that tliey had never done that kind of work before, and that it was of no use. Now both firms have almost every comm..i blank hook kept in stock lulcil in this way. Where the columns are intended for ;, or 6 figures, it is well to rule ilio line dividing the hundreds from the thousands in another color, say purple or green. It will facilitali the putting down of the numbers or amounts. «-.ld.ll I l\„Ok1> ■.1 El. . >■ t8Bf:'i^ !' Books of Original Entry. A book of original entry is one in which Inisiness transactions are jnit down for the first time. These original entries may be the memo on the stub of a Receipt, Cheque^ Note or Draft Hook, an entry in a Hlotter or Cash Book, or Journal, Day Hook, the Counter Check or Charge Ticket, made out by the sales' clerk at the counter, etc The first entry of a transaction is looked upon always as being the most trustworthy, as the record was made at the time of the transaction or soon after. Being the nearest to the transaction it is most likely to be correct, as details of the bargain or contract would be fresh in the memory of the person recording them. livery careful business man will carefully preserve all these original entries, in whatever form they may ajipear. The failure to produce these original entries, if they l)elonged to any charges that were subjects of litigation, would probably cause the loss of the case, or the loss of the items at least, or which no original entry could be found. W'q need scarcely suggest that the person ■'f; !■ t'^'y 1 I* : - i^i:- !i f * IS cuiiccrneu, ana we lay it clown as a piinriiilc tliat all t'ansaclions in wliich a person is interested should appear in his personal account, hence we think it better to make two en- tries in such a case as this and run it throujih Mr. Johnston's perso.ial account : — W. Johnston Dr. $85 anil Bills Keceivahle Dr. $85 To Hills Receivable $80 To W. Johnston $85 Interest 5 This really shows the business you have done with him, and nine-tenths of the business men of our towns and cities will bear testimony that this is the realh- correct method. The only man who will rim foul of this style of entering up, is the tlworctiial man who ha^ had neither practical experience as a business man. a iMJok-keeper, or an auditor. Another e.\ami)le : A man comes in that you have an oi)en account with. He makes a bargain with you- -say that he buys a stove at $30, and pays $20 down on it — $12 of it cash, and an old stove for $8. 'i'o sa\e time the book-keeper charges the customer with "balance on stove $10." This kind of an entry tloe^ v. \ represent the transaction. The customer should In: debited with the stove at Sjo, and credited n'ith the actual commodities he — 209 f;a7't' you, viz., Cash $13 - Old Slove, $S. N'oii may debit the okl stove .it what .iccmiiit appear at the credit of the (."ustomer's Aecount. In short the Ciis- yoii please. It should tomcr's Account s Id show the detail of your transactions witli )iiii. I'Aainples such us these might be added in a work of this kinil ad infiniliiiii. It will l)e sufficient to add another ; John Black has given us his note at f)0 days for $iri2.20 to balance his account. We handed it immediately to .Mexandcr Sinclair to be placed to the credit of our account. .Many are content to enter this kind of transa( tion tlnis — Alexander Sinclair IJr. $162.20 To John lilack $162.20 This is really not a representation of the transaction. There are two transadions the receiving of a note from one person, and the paying it out to another person. 'I'herc is 110 re.ison why it should be crowded into one entry. Let it be i)Ut into two Bills Receivable Dr. $162.20 and .Alexander Sinclair Dr. $162.20 To John Black $162.20 'l"o Bills Receivable 162.20 Lay it down as a foundation principle just as firmly as you do the " Ivpial Dei)it and Credit" principle, tbat you will not run into one Journal entry what could better be i)ut ,'n two or more. If two or more entries will make the transaction clearer or more com- plete as a record in the accounts do not scruple to make half a do/en entries to pro|)erly record it. We have seen persons try to shorten their work by such imi)erfeclly recorded transactions in the way of Journal entries, who would faithfully Journalize their C!ash-Book in the Journal after having first of all Journalized it in the Cash-liook. It is the poorest kind of economy of time and paper to do such work. We have known many a book- keeper dismissed for such work, simply because a customer's account did not show on its face all the transactions with such customer. In connection with every Journal entry, whether made in Journal. Cash-Book, In- voice-Book, iVc, do not be afraid of a few lines of explanation. Don't be afraid to oc- cupy three or four linvs in a Cash-Book for explaining one entry. We do not advocate long wordy dessertations regarding a transaction, but the most brief entry consistent with clearness. Books of Original Entry. A book of original entry is one in which business transactions are put down for the first time. These original entries may be the memo on the stub of a Receipt, Cheque^ Note or Draft Book, an entry in a Blotter or Cash Book, or Journal, Day Book, the Counter Check or Charge Ticket, made out by the sales' clerk at the counter, etc. The first entry of a transaction is looked upon always as being the most trustworthy, as the record was made at the time of the transaction or soon after. Being the nearest to the transaction it is most likely to be correct, as details of the bargain or contract would l)e fresh in the memory of the person recording them. I'lvery careful business man will carefully preserve all these original entries, in whatever form they may afipear. The failure to produce these original entries, if they belonged to any charges that were subjects of litigation, would probably cause the loss of the case, or the loss of the items at least, or which no original entry could be found. \\'e need scarcely suggest that the i)erson '' ; ' '•■ \ 1 ■:> '■ • *•■ 1 1 [) i'^« — 2IO wlu) makes his original fnlrii's Oil a sl.itf ami llicii (<)|iios ilicm into a hook iici's liability there is to make errors. Hence, the old Day Hook anil louriu.l, as two separate books in the Italian method. ha\e gi\eii place lo the biuiiial Day iiook, a combination of the two, and the Journal is divided up into various special books, sm h as Sales li()ok>. ('ash Hooks, etc., ad iiifniiluiii. Hook-keeper ! if you would ease yourself from work and errors, post directly from those books to the Ledger, summari/e your work and post totals wherever you can. Principal and Auxiliary Books— Direct Posting. A principal book is one that you post from regularly to the Ledger. An auxiliary book is one that is used simply as a sort of side record. .\ journal is always a principal book. A (,'ash Hook is a princi|)al book, if you post from it direct to the Ledger ; it is an auxiliary book if you first enter the transactions in it and then journali/e them u\er in tliC lournal belore jio^tiiig. A Salrs Iiook is a |>rinri|)al book if yiiu post from u to the customers' accounts, but an auxiliary book if you take the extra trouble at the close ol the ilay or moiilli, to run the sales all through tiie journal, even if done in totals. Let us advise you to use thesi' books, and ;dl others that your business requires, as principal \tw>V^. Host ilirectly from each of them — post totals whenever you can. The oftener you transfer these transactions the more blunders xou will make. If a business tii'i'd not Diniudm-t Kit tlidii-h ilil on 111-. an cniiv u reel ri'cord iti- that It on wliH li g. In my al (.'iitry. so that il iiic crooked ,our liooks /;e \v(jrk a-. more can- I.edger the ippose tliat The verv ty to make hook lo , I lie le>s separate iil)inatiun es liooks. work and and post — 311 — man will carefully lay out \us hu^iness transactions into departments, and ilo his work systcmalitally, arranne liis hooks to po-,t (hrictly to the Ledger without any loiin co|iyinn processes, and if he wi'i post all tlie totals ol transactions that he i an, he wdl keep his hooks just as casdy hy douhle entry as he ( ,m hy sitij^lc entry. And the hooks will he kept three limes as well, and the ri'cord ol the husiness will he three times .is uood. lii the single entry you lia\e only one class of accounts, vi/ : Aii will be in balance, because on the 1 )r side are all the Resources and on the Cr. siilc all the l.ialulu les. a 1.. lul the Net L apital and If the lie eipial would be treated le concern were a the Resources = Liabilities + Met Capital, therefore the titles must business were carried on by a partnershij), each partner's capital a c. just in the same way as the capital account in the above case. If t! Stock Company business the Present Worth, according to the statement compared with the paid-up capital, wouM show whether the capital liatl lueii impaired or whether there was a sur[>lus of profits If the Present \\'orth of the com|)any were greater than the I)aid-up capital the surplus would be accunuilatcd profits, and instead of being entereil on Cr. side of Capital Stock .\ccount would ei.tered to the credit of Loss and Cain, if it were proposec d to pav it. or jiart of it, out as a di\ idend on capit.il It It IS pro] loosed to retain it in the c-om[)any, enter it on the ere ciil side of soiiu; account that is chargid with the accumulations of [)r )lits, such as Rest'rv e a v., Resi a c, Capital Stock to re|>resent the par value of the shares. Surplus a :tc., tl Uis le,l\iiiL im If the paid-u]) capital were greater than the pri'.sent net worth the capital has lieen paired the amount of the dirference bi'iwren them. Lnter the Ca|)ital Stock a c. up at Us lull par and debit some aicouiu with the amount of caiiitaj tlial has been lost. Such acciHint might Iv named Impairuitiit a c, Organization a c., etc., or the impair- ment of cai'ital could be c.urieil to the I )r,' of Loss and Cain Account for the time leniL \Vh en the ooo ks h.: i\e been ehaiiLjed t(j dduiile entry, a I'rial balance should l.iken. The I >r. side will correspond with the Resource s'de of the statement in Pan i. e\ce[it in ca>e of a Joint Stock Company with an impaired capital. I'he Cr. side will agree with the l.i.diility siile of the statement, adding the Capital Account or .\ccounts, am 1. in )f a Stock Companv. the amount ol Reser\e or Rest a c, if there 1 )e sucii. Resources or Liabilities Forgotten or Unknown at Time of Change to Double Entry. Suppose that some valuable resource had esca[)ed the notit-e of those making inventories ami changing books to double eiilrv take for example a piece of Re.il Lstate worth $500— it would be entered uji just as an additional investment by making -213 — an entry, Real Instate, Dr., $500, to I'roprietor, $500. If a parincr.slu[), the in'crest of each partner would be siihstinitcd for proijrictor Real Instate, Dr., $500, To A. Moore (Capital a/c), $300, 'i"o S. Wilson v^Capital a r.), $200. If llie business were that of an iiirorporated eonipany it would l)e eiitercil, Rtal Ivstate, Dr., $500, To Reserve a c, $500, ur some similar accotmt. If the ( apital were impaired it would l)e ercdiled to the Impair. iiK'iit a c., to parll)' or entircl) wi[)e out such :m[>.iirmt.iU. If some liabii'iy \MTc omitted from the statement it would be entered up when discovered, in the same way as a withdrawal of capital. Su|)posc a note (I'.ills I'ay.) of $200 were to turn up against the business, wc would crcdil Hills I'avable and debit the proprietor for the amoimt. If it were in a purtiu rslii|i we \miuKI debit each partner with his share and credit Bills Payable ; if in a Stock Cumpany. it woukl be thar^ed to the (kbit of Reserve a c. or Rest a c, if there were such, .is the) are too ^reat on account o' the leaving out of the note. If the capital were already impain.d ihc disct)\ery of this imp;iirment woidd increase the uupairnuiii : thcielore, ( )rL;ani/aiion a c., or Impairment a c., or some such account, would be debiied .uul Hills I'.iyable credited for the amount. Taking Over a Set of Books. There are numerous things to be taken into account when taking charge of a set of books that have been kept by another person. We will sup[)ose, in the first ])lace, that the books have been jjioperly kept by double entry (>r single entry, as the case may be, il your predecessor is a careful accountant he will have a Trial IJilance m.ide out and initialed by himself. He will also initial principal accounts, showing thus at what i)oint his responsibility for corre<''ness jiuls. (i). Initialing Books, Accounts, &c. Xow, whether your .[iredvcessor has or has not done this, the jierson taking the hooks should initial the Journal, Cash Hook, l>ill Hook antl the principal accounts in the Ledger, especially those that reitresent projierty. such as Hills Rec., etc. \'ou will check over the Trial Halance with the aecount.s, see that il rs in balance and that it faithfully represents the accounts in the I,ed',er. (2). Checking off Property. It is not only necessary to see that the accouiUs have been accur.itely kept, i)Ul that there is property handed over to you that the .iccoimts reinesent. l''or instance, you will check off with the Hill Hook, or m.ike .1 list of all notes on hand. The sum of the notes must equal the balance of the Hills Receivable per Hill Hook and per Hills Receivable ..ccount. Mortgages uuist be treated in the same w.iy. C.ish reiiuires s[iecial attention. .Make a list of all the actual money tklivereil to you — this must be eipial to the balance per Clash Hook and Ledger. If possible have all such lists of Notes, .Mortgages, Cash and other property signed by the person delivering it, as well as by yourself. ii liiii l! — 214 — (3). study the Method Used in the Books. It will retiuire diligence and hard work oard of Directors. Do not be dictatorial in such a matter, and always, before making such suggestions, be sure you see the end as well as the beginning. In other words, be sine you know where the course you are going to rec()mmend will lead to, what results it will bring about, before you launch into it. I'.ndeavor to ascertain the desires of your em[)loyers as to what results the)' require, and strive to meet these requirements in the best possible manner. Suspense Account. This is the title of an account used by many accoimtants. It is simply an account int(j which to write, f(jr the time being, any transaction for which there is not information til enable the book-keeper to (k'al with it fully or pci ni.menlly. for example, a remittance of cash is sent to you and the letter is not signed \ou do not know who it is from ; anodicr conies without ex[)licil directions as to what it is for. These stuns might be credited to Suspense .\ccount. pending the arri\al of further mformation, when they Would be wiitten into the correct accouiU. The Susi)ense Aciount would be debited and ilie ])roper account credited witii the amount. This account is, then, only a temporary rci eptacle for Hems that cannot be put to the (jroper account for lack of information. In some cases it is u.sed to charge sums of money that are placed in a person's hands for some purpose, such as making a settlement of a disjjuted claim, ivc, the account being credited when a report is made and the transaction closed u[). \f ■■ f f, if i r 1 1 i 1 2l6 Suspended Accounts This I.cdgei- heading is slightly different from the title of the account just precedint;, viz, Suspense Account. It's purpose is entirely different. It is an account in which all such accounts as cannot be collected are placed, when they are written off the Ledger as *Umd Debts." .'\s auditor, we have fretjuently written off thousands of dollars of sucii accounts. Every man who does business on the credit system has more or less of them. These claims are now uncollectible, but sometime they may be collectible. The de.btor may be in a [losition that he may be sued before the debt is barred by the statute of limitations, yet such accounts could not oe taken into a IJalance Sheet as a valuable asset of the comi)any. If these are written into Had Debts a/c. and then sued, should the dcl)tor be thought worth it, the very words, "bad debts,"' would prejudice the court against the claim. It would seem as if you had taken it for granted long ago that the debt was bad, and that, perhaps, on account of a defective claim on your part, rather than an inability to pay on the part of the debtor. In any case, it gives ground for a presumption against you. '{"his is not the case, if a title " Suspended Account " is used. 'i'his account is used '■■' two ways : ist, the doubtful accounts are actually closed into this account- -Suspended a/cs., Dr., $42 20, To Timothy Smith, $42.20. The "Suspended Accounts' Account'' is then closed into Loss and Clain, when such doubtful accounts have been first closed into it, either for the total amount or for a percentage of it. The second method is to write m red ink over each doubtful account the words " Suspended Account,'" so that it may be left out of the Trial 15alance, leaving the account unchanged and open. On the Dr. side of the account "Suspended Accounts " place the man's name a:.d the amount. When closing time comes, close "Suspended Accounts '" into Loss and Clain. If any such account is e\er paid afterwards, post the payment directly to the debtor's nccount that yet remains open, and at the same time enter the amount on the Cr. side o " Suspended .Accounts."' This will lessen the amount to be written to Profit and Loss for the year. Figure Posting. Many book-keepers and proprietors, who wish to be "saving"' in the use of the Ledger, adoiU a plan of posting to the Ledger accounts without giving any explanation in words, the page from wiiich it was taken in the Journal being given in a fractional form, with the amount of the transaction. Thus, suppose an item of $2.45 was, on page 71 of tiie Journal, to be posted to Thos. A. Brown's account, it would appear thus *-i\- in Browns acxount. Under ordinar)- circumstances a line is used for each transaction ; by this method of figure posting, from four to eight transactions may be posted into one line and the total extended into the money column. Dr. — 217 — TIIOS. A IJKUWN (Wiarton). Cr. 1891 $2.45 $0'6o $14.90 $4.62 71 74 .S7 90 ' $12.70 $o..55 $i).,S4 $7_26 106 109 I .'4 I JO 1891 i $21 15 $2.00 $io.aj $10.00 $5.00 74 90 106 107 '$5.00 '-5 ! I $27 00 As accouiUs arc u.sualh' inatk' out iVum ilic D.iy Uook, this >,tylt' ot' keeping tlio Ledger yives the l)alaiice oi the ac'.iuiiii and the Day Wuuk pages on wliicli to find liarticiilars as to llie various sums. 'I'hi:. method i^. givei. tor wiial it is wortli lor use in the Ledgers of ore'.. .■ businesses. It cannot lie lecomnieiuled for use in joint .Slock Company work, wliere auchts liave to lie n-.ade annually or olteiier, as a word of explan- ation is often neces.sary in cheeking o\er the ae( omits to e.slal)lish liie correctness of the work. Various Styles of Ledgers. Tile Ledgeis of any l)usiness should he suited to the needs of that liu.siness. 'I'he ruling should usually he to order to meet the re(iuirements of the business. The distance between thv; faint lines shoidd suit the person who is to use it. Usually posting is done in small writing with a fine i)en. and it is found under .such ciicinnstances that ,■'„- of an inch is sufficient space between the lines. ITiis is just .ibout half the s[)ace between the ruled lines on ordin.iry l-'oolsc.ip The arrangement of money, folio and date columns would also be dictated by the needs of the work and the worker. .\ Ledger should not be too thick. It is better to have two of 500 [)ages, each, than one of 1000 pages. In almost all businesses the w,)rk in the Ledger may be di\ided into two or more depart- ments. For example : (1) IVrsonal .\ccounts. (2) Working .\c(X)unts. Or as an example of three kind.s : (1) Personal .Accounts Recei\al)le, (2) Personal .Vccounts Payable, (3) W'orking .Vceounts. Tlu'se Working .\icounts W(aild inchide su<'h as the Proprietor's Capital .\ccount, Loss and Ciain. li.mk, (!ash. I'.ills Recei,.d)le, iiills Payable, Merchan- dise, and all branches of expense, such as fuel .\ccount. Light .Account, Printing and .Stationery .Vccount, .Salary Account, Wages .\ccouiit. Interest .md I )iscount Accounts, (S;c. One person can then take charge ol' e.icli tlepartiuent. (1) Some retail firms kee() a Ledger in a book ruled in the same way as a Day-Book, using the left page for the debits and the right hand [lage for the credits. The items are all written in full, a .d the Ledger .\ccount is a fully itemized statement of the account. If the customer wisl;c. a written account, it is c()[)ied I'rom this book to the IJillHead without reference to the Day-P.ook. (2) .'\nother form of Ledger is kept in a booi; ruled the same as a Journal, an account to a page, thus : — — 2l8 — Jan. '5 M 15 ri 27 tf 27 July 10 John Ritz, (104 Scropc Street.) 3 lbs. hiittcT Fol Dr. Cr. 1 broom To 2 doz. eggs ]ly Cash ---._-... To I suit clotiics '"•'•", 10 yds. dress gcjods '""'", Trimmings '-" Hy Cash 42 » 161 5623 29 37 30:1 00: I 00 lOjOO One troiiljle with this is that the history of both deljits and credits are mixed up, and an item may very easily slip into the wrong column and pass unnoticed in a settlement. Suppose the last item of $5 in the above account had been placed in the Dr. column by mistake, the account would be $io wrong. 'I'o make it correct another entry correcting it should be of the amount of $10. If the item of .$5 were left on the Dr. side, and one of $5 is placed on the Cr. side as a corrective, it will only be half corrected. The subjoined form is worked on the same principle as the I )eposit Ledger in a Hank. There are Dr. and Cr. colunms, and a balance column. Every time a transaction is re- corded, the balance of the account is struck. The accuracy of the balance may be tested any time by adding the Dr. and Cr. columns and subtracting them. The outside column is foi Dr. or Cr. to indicate which way the balance of the account stan( % C. V. LiSTKK. Dlt3. Particulars. Fol. |i Dr. |1 Cr. Bal. Dr. or Cr. 189 July 1. 10 To Cioods _ - - - - ii 7^' i5'4o 1 5 '40 Dr. M rt 30 30 .. Cash " 79 3690 91 2850 i 52 80 30 80 II 1) Sep. M 9 30 IJy Salary To CiOods 99 106 4 I20|00 10 ' 39 35 20 10 Cr. A simple fv)rm for a Petty l-edger for customers who have a transaction or two a year charged to them, is to [)ut a few siieets of ordinary I'oolscap in the back of the Ledger, and devote one line only to each account. They may l)e posted in " figure " style, or by giving items in detail. They should be numbered consecutively, and indexed by number. This is a convenient form to have the accounts in. They are under the scrutiny of the proprietor without hunting through voluminous Ledgers for small accounts. PETTY LEDGER. $2.28 $1.00 $1.28 1. S. J. St)merville Cr. ~ Cr. 75 92 '06 $4.50 $4.50 2. Ralph Davis Cr. 64 104 $17.75 .$10.00 T,. N[. '"iraham Cr. " 84. i£8 _. __ _^^^___^. (. J. ^'oung 90 — 2T0 — Tlic followin,^ is a form of l.f(li;i'r suitaMe especially for wliolesalc work. As a rule the transactions oil tiic Dr. side reciiiire ex|)lanation, such as the terms on which the goods are sold, while the Cr. side usually shows '-Cash" or Hills Receivahie. Tiien the ad- ditional columns are useful to extend the amoimt> of monthly statements, on the Dr. side, and monthly setilemcnls, \c.. on the other. In this way the necessity ol really balancing and rulin;.; up an account each monlh, or as often as a settlement is made, is obviated. It shows the monthly volume of husiness with any firm at a i^lance. Also the totals are c'asily made out, so as to show the annual \oliuiie oi the business with each person and firm, and thus the value of the ai count. This stvle of Ledger is an easy one from which to take I'rial liaiances. Ivich months cNtensions are made into the extra columns and added to the Trial Halance amount the jireviuiis moiuh, 'I'hc figures in lead pencil or red ink used frciiueiUiy by book-keepers in refeiefice to their monthly 'I'rial I'.alances can he left in the monthly total columns each time, and not mixed with the figures of the ordinary debits and credits of the account. Dr. J. Mcl..\tciii..\N (.V SoN.s, (Owen Sound.) Cr. 1 891! ! lune 1 2 To Cioods. 30 days, .1 4 mos. 11 30 (\:\\S M 4 mos. .. 4 u " 4 " n ^o (lavs " * 5 II 2 2 July 5 ir >r 20 Aug. '5 H IS 1 ;i I q6 2 2 'i 64 1 207 224 40 220 io() -- 353 -M 2flO 42 00 2S, 7.S 00 1 20 00 21)0 loS 75 ,2^^' 75 00 183 75 June 28 By Dft. 4 mo. 230 22440 Inly >5' ,L - / ]2f\ Cash jio4 i2r)84|353'24 109 3990 Dis. 5 ■ 285 2|lO;| 42'oo !l Private Ledgers. It is not always considered necessary nor judicious to allow the employees in a Company's office, or in any business office, to have access to the Capita! Accounts, and to know all the conditions and agreements existing between ixirlners, shareholders, iSic. Such inibrination is usually entrusted to one confidential clerk. In many ether cases the partners only in a partnershi|), or ollicers only of a Company, are privileged to know such affairs. In such cases the CJa[)ital Accounts, and perhaps a few others, are kept in a Private l.ci}:;cr, S(jmelimcs a Locked LvJi^er, to which only a certain person has a key. If only the Capital Accounts are kejit in such Private Ledger, any ordinary book- keeper, if he is iiKiuisitisc, can ascertain iIk' total capital of the firm or company when the books are kept by Double I'.ntry, by simitl)' subtracting the Cr. side of the Trial Hal- ance from the Dr. side. He caniKH liowe\cr ascertain the conditions regarding Capital existing between the [lariners. for this reason it is customary to keep a few other accounts in the Private Ledger, such as Suspense Account, or Hills Payable, or IMlls Re- ceivable, or Sus[)ended .\ccounts, to make it more difficult to ascertain by any process of addition or subtracti > 1 any idea of the Capital of the concern. In_taking a 'i'rial Balance, the kee[)er of the Private Letlger has the same means of testing his accuracy as he has of testing other Ledgers outlined elsewhere in this hook. He simi)ly gives the net balance of his Ledger, or the sum of the Dr. and Cr. sides to the person making the Trial Balance in order to complete it. I'll' ' tJ- ; > If, I' li < |: H f t ,; < 220 Insurance. A CDiilrac-t of IiiMiianrc is one !))■ ulurli mu' paily tnt;ayi'.s, lof a rLTtaiii sum of UKJiiey to assume a ccr tain risk which another woiilil otherwise l)ear. It is a contn el cjf guarantee against loss, ilamage, injury, hurt, ete., lliat migiit liappen to a person t!iat is llie owner of or lias an insurable interest in properly, ete. ( )l the many kinds of insur anee we minhl meiuioii tlu' followiiiL I'ire Insmance. .Marine insurance. Life Insurance. .\ccident Insurance. l'i(lelit\' Insurance. Ther i.: are wirious less iin:ioiiaiit fmins of insur.uice of which miuht he mentioned g of the study of this jd, so that the student that on i.i\e Stock, on Plate (lias--, en lioi'ei>, etc. In tiie heginnin subject it ina\- he well to ha\e a lew rif the common ti/rms expl.iine inay better miderstand what Ibllows. 77/i' AppIiaUioii. This is a form furnisheJ by the insurance company antl filled up by the person effecting the insurance. gi\iiig a destriptii n of the property to be insured. It forms part cjf the contr.iet (jf insurance. 'J'lic Insurer in- I'ndcri^'riU r i> the com])any or person that guarantees the other [larly against loss. TIti: Insured (>r .hsured i> the person whos,- risk is carried— the owner either of the propert\' or of .m insr.iable intiTe.^t in the property. /'//(' J'olicv is lie coiur.ict of th lemnify the insured against loss. The Premium is a teim app e cduipany or underwriter, by which they agree to m- icd to the amount paid for the insurance, either in cash or note. Earned J'reiniuin is th.e part of the premium used uj) in paying working expenses ,ind losses ; for exaiiii .\ mp.uiy insures a [iroperty for a venr. .\l the end ot tliree months one-fourth ofilic premium woukl be u>cd or earned. C'nearned Preniiuni is the portion of the insurance not used u[) in [laying claims and working expenses. In the example uiuler earned premium three-fourths of the ])remium IS une ;irnetl because ihree-fourtl IS ol the term is still to run. Refund Preuiiuui or returned premium is an\ [lortion of the preniiuni that is returned by the insurance company at the teiiniiiation of a policw The Control of Insurance. There is a point to be settled in the luture as to whether the Dominion or Provincial ('io\ernmenls should control the Inisiiiess of insurance. L'ndoubtcdly both the provincial and lederal governments now charier <'om[),inies and associations that carry oiithebusiiiess of insurance, and both exercise more or less control over the companies they have char- tered. It is not our imrpose to debate the constitutionality of either the federal or i'iii, ! 221 — ])roviii(;ial legislation. It i> snrticii'm to say that tlic Proviiico of Oiitaiio. for f\aiiii)li', has not only granted charters to l)oih fire and hie insurance companies, and has licensed companies otlurwi'e incori)orated to do husim ss in Ontario, luit also has their i)ooVs annually inspected to see that tbcy are solvent and are doing an honest Ijiisiness. Fire Insurance. W'e have made a di\ision i I insurame into tlje various kinds, and we |iropose to consider one kind s|)eciullv in I'lese pages, \i/.. l-'ire Jiisiiroiuw and we will proceed to define it. I'irc Insurance. A contraci whereby the insurance company agrees to make good to the owner of property any loss or damage to a cerl.u'n amount occasioned liy lire or lightning. 'I'his includes (i) Actual damage or destruction of the propertv I))' lire or liiihtning. (2) Damage to the jjroperty 1)> smoke from tlu' lire. (3) Damage to the property l)y tiie water used in quenching the lire. (4) Damage to j)roperty occasioned 1)_\' renios.d to s.i\e it from lire. (3) Loss of ))roperty by theft, etc, when being removed to sa\e from lire. Insurance is usu.dly effected between an agent reprtstnling a company and the owner of property by the owner m, iking ai>pHialion to ib.e company for insurance, giving a de- scription of his property, and i)aying his [iremium to the agent. \\'hen this has been done the agent gives the insured a I'rovi.sional Receipt, or Interim Receipt, 'i'his receii)t ac- knowledges payment of the premium and grants insurance on the ludpeii)' for thirty days or longer, until such times as the director^ of the company ha\c time to examine the api)lication, aci-ept it, antl issue the policy, or else reject the a|>plication. and return the ])reniium to the insurer. The following is an ordinary form : No. 24,570. NORWICH LNTON I'iRi'. ixsi ' R,\\( i-; .sO( nyiA-. Ifc;i(l I )lliccs : \or'.>. lib and I-oiidnii, Mnylanl. Chi(.'f Dtfice lor Caiiail.i : 'I'di-iiito. I'.irrx Souiid .\gencv. Mar. 19, iSyr. RiXKiVKiJ from \\. W. Rtnvc the sum ol "Two. . . . |"',,";, Dollars, being a Deposit fur an Insurance against I''ire for $300.00, subject to the Sue ieis's printcil conditions, on House- hold i'urniture, in house on I.oi 7, I'atterson Street, for wliich (if approved of, on further particulars being received) a I'olicy will be issued in terms ot Assurer's Proposal of .March 19, 1891. This protection not to extend beyond Thirty Days from the date hereof, and |)reviuri(l ni particular places only, In such a poHcy as tliis, if tlie horse liaiijiened to he hurned in the cow stahlu or in the barn, no insurance woukl he paid hecause he was not huiiied in the iiorse slaiile. (2) A llltnihct Polity is one lliat insures llie contents ol a imilding as such and makes a contract to pay tiie k)ss ol'the insured pro|)erly ..iierever it is destroyed. The following is an ordinary form of i'ohcy : No. 1,491,007. Sim Insi'kkd, $300.00. NORWICH UMOX KIKi; IN'SLKANCI'; .sociiyi '^■. Hon. (1. W. Ai.i.A.v, V. ('. I'.\i ikson, Ivsij., President. \' ice- 1 'resident. Ai.i;.\.\ndi;k Dixon, (anend .\j,'ent. In consiukkatiun of the Sum of 'i'wo. . . . |';,';, Dollars, and of the representations, conditions and warranties hereinafter mentioned or ni'ened to, Tin; Noku k 11 Union l-'iRK Insi'kanck SociKiv. of Norwich and l.ondun, lingland, IIkki i;\ In-i,'ui;s in man- ner hereafter appearing, William !>. Rf)we, l'isi|., l'arr\' Sountl. Out., (hereinafter called "the assured") against loss or damage hy lire to the propeity hereinaiter described (but subject to the conditions and stipulations contained in this Policy) to the amount of 'I'hree Hundred Dollars, namely: On Househokl I'lunitme, $,:;oo.oo all owmd hy the Assured and contained in house on l.ot No. 7, Patterson Street, Parry Sound, Ontario. .And it is hereby agreed and declared between and by the said Norwich Union lire Insurance So- ciety, (hereinafter called "the Society" or "the ("om|)any") and the Assured (su'iject, nevertheless, to all the said conditions and stipulations) that if the property above de- scribed, or any jiart thereof, shall be destroyed or dama'ifd by fin.' ;it any time between Twelve o'clock at noon of the Nineteenlh day of .\larcl', \\m)\. and Twelve o'clock at Noon of the Nineteenth day of March, icStjs, the Capital Skm k. I'unds and Property ol the said Society shall, according to the Laws, Regiilation.-. and Provisions of the .Society, alone be liable to pay or make good unto the Assured, his executors, administrators, or assigns, all such immetliale loss or damage, to an amount not exceedin:; in respect of each of the several matters above s[)ecified the sum set oppi)-.it'; thereto, or the interest of the Assured therein, and not exceeiling in the whole the sum of Three Hundred Dollars, sub- ject to the conditions and stipulations of Assurance printed on the back of this Policy. In witnkss whkkkok, I, the undersigned (leiieral .\gent, being duly authorized by the Directors of the saiil Society, have hereunto set my hand this Thirty-first day of March, 1S91. ■' „ ,• Al.l'.XAMil.R DiXON, Countersigned, 1 . C. Patti.son. , deneral Agent. This Policy will not be valid unless countersigned by one of the Society's Local Board of Management for Canada. N.B. — For all future payiiicnts ujxjn this Poliry. priiiud rcceiiits, bearing the Vaw- Ijosscd .Stamp of the Society, will be giseii. In the foregoing form of iiolicy the contract only is given. Pesides the contract there are always a number of conditions or sti[)ulations printed in small type. 'Phese are of two kinds : (i) Statutory conditions being the general rules and laws made by statute law. These vary a little in various [irovinces and st.ites according to the l:iw of the pro- vince or state where the insurance is effected. We think it unnecessary to occupy three or four pages of this book with them when they are priiUctl on every i)oli(;y. (2) \\'hen the company varies any of the rules laid ilown in the statutory conditions of the contract these Variations in Co)t(litions must be printed on the jiolicy. but must be madj. specially prominent by being printed in red ink so th;it the assured may notice them. 2 2.'? — Renewal of Insurance. Insurance Companies frciiucntly cnntinut.' a policy from year to year by simply niving a renewal receipt for the yearly premium eacli >c;ir when it is paid. This continues the ()rit,'inal contract between the company and llie ii\surcd with ail its conditions. If the premises arc chanj,'ed to any i;rc.it extent, or tin; buildings or businesses near it changed so as to increase the risk, a new policy would have to be issueil. 'i'he following is a form of Rertewal Receipt ;^ No. 1 1,824. NORWICH UNION IIRH INSL'RANCI': SOCIF/I'V. I'arry Sound Agency, Mar. ic;, i8ijo. Head Offices; Norwich and Lomlon. I'.nglaml. t'hicf Otfice for Canada : Tonnilo. Policy No. 1,275,170, Received of William H. Rowe, \\st\., the sum of Three. . . . ,'„"„ Dollars, for the Re- newal I'remium on this policy, frtjm lyth .Marih, iSyo to i()lh March, i8(;i. Amount Insured, $300.00. R. ("hkistik. Premium, 3-40. Agent. Extra Risks. m :n When a building is insured it is usually supposed to be in a finisiied and settled condition, and it is classed and rated according to its construction and occupation, a brick or stone building being insured much cheaper than a frame, and a dwelling being insured at a much less rate tlian a shop or factory. liesides this insuring of property in a completed condition, an owner often wants insurance to cover his property in either of the following conditions : (i). While being built. (2). While undergoing repairs of any considerable extent. There is an extra risk attending such building or repair, and comiianfes charge an extra fee for such and issue a " JM7|ifil\ iii>iiiri|. m lui ;m\(illur reason clcsircs Ik iliscoiUinuc liis p()li( )■, lie may liavr ilir lompany cam (1 ilir pdhc) and iitiirn part of tl\i' |)rfniiinn to liini. 'I'Ik' part of tlu' money ri'fundt'd is lallrd the iimnninl pviiinuin, liccaiisc itic company lias not i.;unc«l it all liy carrying; liic risk to llic end of the tc.riii of contract. The amount ri tained liy the i( inpany is called tlu- idnnil iircniiiini. On a policy cancelled at the re(|m'st of the insund, ihi' iumpan) would i liar^e the short term rati' and refund ihe halanci'. If, Iiowimt, the insmance Compan} wished to cancel the poli( y, the company would rehmd a proportionate jiart of the |iremiuni. H' the insurance had run halt' its tiuic. half tin premium 'aouUI he rrintmd. Two or More Insurances. 'I'wo or more inairances on the same propiaty wiihout consent oi all the companies concerned is, ///r;v?//r. fic /fix. '/fit //re, a< i/ol c/n- u/it of ii' paid i// ase of fuss. If consent of all parlies is oht.u'ned. the same |)io|ierly uiij^ht hi' insured in a tlo/en different companies, so lon.i; as the total >um of all ihe in-airani es toi;ether ilid not exceed the insurahli' \aluc of the propert\. Ihe insuraMe \alne of propert)' is usually about two-thirds oi the c.ish value. Re-insurance. I'lvery company sets a limit as to the amount of ri>lv ii will carr\ on any one pro- perty. Suiijiosc a rom|)any sets such a limit at $5,000, .uid ilu \ ,\w offeied .1 risk on a hiiildini,' of $12,000: 'i'liey would lake the risk .md immediatel)' re insure at least .$7,000 with other companies, so that the loss from an\ one jiarlicular lire would not he so lar^e as to cripple a company, eithei for the time heiiit; or |)(.rniarn. lUly. If it pays private individuals to einiiloy a comp.my lo ires to pioxide aL'.iinst ; hence, tlie coinpanv is called on to pay, even if there has been carelessness. If the insured wili'ully sets fire to his own building, he gets no insur.ince, and is ])uiiishable for arson. If property is on fire, or in imminent danger from fire, the ownei' must do his best to save it if he knows of the fire. If he does not, his negligeiHe would \oitl his policy, and he would not get any insurance. — "5 — Adjustment of Losses. Oenerally llic full aiiioiiiit i>( [\\^■ Iuss is |).ii(l im the iiiuiii.'(l pmpcrty, so lonj,' as that aiiioiint (loi's not exceed the aiiHuint ol tlie insiiiance. The ainniiiit paid will only i)e the a( tiial ea!ili \aliie at llio time oi distriK tion. Insurance companies ilo not count on |iayin^; Hpecultitlrr ddiiKii/rs in ordinary lire insurance. 'I'lic profits on j^oods are iKJt insured, unltv- specially provided for, nor is the loss or inconvenience resultiiij^ from the interruption ul business hy the fire made up hy tiie insurance compaii)'. 'The loss of property only is dealt with. In case of loss hy fire, notice should he ^;i\en the ((impaiiy a' once, anil the company will semi an adjuster, or ,i,t;ent, to inspect the loss. The value ol the articles destro)ed must he verified on oath, and false or Iraudulant statements nullify the claim against the compaii). The com|)any always reserves the right to pay the money for the loss, or have the article or Iniilding repaired, as they choose. Some companies have an (ircriif/)' rldiisr inserted in their policies. When a policy (oiUains an averaj;e clause, onl)' such i)ro|)ortioii of the loss is paid as the insurance hears to the value of the property. Kor exam])le : .\ insures his house, worth .$1,500, for $1,000. If the |)olicy contained an average clause, and the property were damaged .$ftoo, only two-thirds o'" loss would he paiil, as in this average clause policy the company is supposed to carry two-thirds of the risk and the owner one-third ; hence, he would only get $400 for his $C)oo loss. This average clause is put in [jolicies issued on wareh-iuscs, ships, iVc. In mercan- tile risks it is made to apply to damage done to property hy removal to save it from fire, and to property stolen while being removed to save it from lire. Who May Insure Property? The cpiestion, '• who may insure i)roperty ?" may be answered in short - any person having an iiisurdblc i/itrresf in the pro[)erty. .\n insurable interest is either ownership (if or a fmaiuial interest in the property. Property may be insured by any person who would suffer on account of its loss. There are three general cases that might be stated in this connection, vi/, ; (i). An owner may insure his property. (2). An owner may insure his property in favor t)f any i)erson who holds a mortgage, or lien, against the pioperty, because the person holding such mortgage or lien has a monetary interest in the property, and would suffer a depreciation of his security in case of loss by fire. (3). A mortgagee may insure property for his own benefit, if his mortgage so provides, because ho has a valuable interest in the property. In ca.se (2), the policy would be made out in favor of the mortgagor by the company with a clause written on it, " Loss, if any, payable to the mortgagee, as /lis interest may appear." In case (3), the i)olicy would be made out directly in favor of the mortgagee. ~„,..,L-y,!JM iill — ^ 226 — Thi- rafr >'' "i.-uraiKo i-^ ihi- price jjcr $100 or per $1,000 cliarj;cd by the company for carryinL,' tlie risk. I'liis rate is liaseil oil the dani^er tlie |)roperty is in— great danger would necessarily imply a hij;h rate. Ininiunily from danger would he met by a low rate. For cNample, a frame planmg mill would cost $70 for $1,000 insurance for i year, wbili' a sloiir dwelling house isolati'd from other buildings would cost perhaps only $7.00 for $iooc for three or lour years, one tenth of the premium paying for three or four times the time. h K The Companies. 'i'he business of insurance is conducted on two plans — first, by Joint Stock Companies, that <-arry on the business ol' insuring for the |)urpose of making profit for the shareholders. 'I'hcy do l)usiness on the rush pUtii. \o\\ pay your money and get a tlefmite ct)nliact of insurance in return. 'I'he second plan is called the mutual jilan. There are no shareholders ; every policy-holder is a member, and they are all joined together, e.ich i)erson gi\ing an obligation to become good for his proj)ortion of the losses. It is insurance on the co-o|)erative plan, and the members have insurance at cost ])rice, the two el'Mnents of cost being (i) losses and (2) working expenses. In the Stock Coin[>any Insurance, there are jirofits to be paid to shareholders, and fre(iuciitly extra large wcjrking exi)enses and reserve funds to accumulate, making up the higher rate char^ied bv them. Mutual Companies Insure on the Cash Plan. \ot onl) iln Mutual Insurance ( 'omi)anies do business on the mutual system, but they aNi) do it on tlu' cash ssstein. before a .Mutual Company can do any business on the cash plan in Ontario, it is necessar\- for all, except those that confuT," their business to farm and isolateil risks, to deiiosit with the Provincial Covernment of Ontario $5,000 if insuring Mercantile and Manufacturing risks. If the company does an Inland Marine business, the deposit must be doubled. This tk'iiosit is on a basis of $2,000,000 liability on risks. llach additional million would re(|uire an addition of one-ter.th of the initial deposit, joint Stock Companies are required to deposit about five times the amount that .Mutuals deposit. Formation of a Joint Stock Insurance Co. A b)ini Stock Insurance Company may be incor|)orated in the ordinary way, either imder the |oint Stock Com|),uiies' Letters' Patent .\ct, of any Province or the Dominion, or by .\ct of eilher Provincial or I )ominion Parliament, with which speci.-; Act ol Parliament the Joint Stt)ck Companies' (ieneral Clauses Act will be held to a])[)ly for the |)urposes of organization, management, \-c. In Ontario, not only may a company be incor|)orated in till' ways above mentioned at the beginning, but a Mutual Company m.iv be i//(7^/.V(i/ from a .Mutual to a Slock ( 'ompany under the Joint Stock Comiianies' Letters' I'atenl Act, if they have a surplus of " Cmh '' a.ssets over and above what would "•"WW company at danmr 1 low rate. •car, wbilf ' $7.00 fur • time;, the )int Stock profit for ey and get utual plan. all joined tion of the isurance at s. In the I freeiucntly the higher iVbtcm, l)ut )usiness on t)usiness to ario $5,000 land Marine liability on the initial the amount way, cither lee or the lich specie; .'Id to apply a coinpary \\ Company Companies' what would be retiiiircd to re-insiue all their risks. l!y " O/.v// " assets we mean the ordinary assets otherwise than premium notes or undertakings. Tlie lon.sent re(iuircd foi this is a two- thirds vote of the members present at an annual meeting, three-fourths "f the directors and two-thirds of subscribers to the (luaranlee ('ai)ital. The mend>ers of the company have the (irst t'hi' lice of purchase of the Slock. This pivlciciicc (.\lei:ds for one month. See the Ontario Insurance Act of 1S87 (v. 50 c.53) for further iiifoiuialion. Formation of a Mutual Insurance Company or Association. The initiative iii forming a .Mutual Insuiv.nce Company or .\ssociation. either on the mutual or cash ])lan, is taken by ten freeholders consulting tog''lher ami calling a meeting by ad\erlisemeiit, once in the ()ntario Cia/.elte and thicc times (wickly) in a paper published in the county where the association is to lie founded. II thirty or more freeholders attend the meeting and decide to organize, they ."iipoint a coinmiltee of three, who will open a subscription book. \\ hen fifty or more freeholders sign their names in this liook, agreeing to eft'ect insurances in die com|ian\-, aggnj^aiing not k'ss than $100,000, another meeting is called by ten ol tlu' subscribers b\- sending a notice of the general meeting to each subscriber by mail, and ad\erii-iiig l!ie meeting in a local ])r.per published coiueniently to the jiiace of meeting. .\t thi> general meeting there should be at lea: . twenty li\e subscribers. The following business sh.ill be ilone : ( I )• Ap[)ointing a secretary and :; boaril of directors. {2). .\dopting a name, which shall include the words " Kiie " and " Mutual." (3). Naming a jilace with.in the municipality to be be known a> the head (jftlce. -After this meeting the directors w'll eleo .^elld to the Inspector of Insurance copies of all documc'i' , f\ i l m die Registry ( )t'lice. certilled to by the Registrar. If the Inspector, on exani'Maiu : 1. .d^ everything satisfactory, he issues a license authorizing them to procc'- i wii!i business. in case of ( 'ash .MiKuals doing a general insurance business, the reguin ; . .rmneiit diposii mu>t be made before a '. cense will be issued. l-'or further par'uulis, see the Ontario Insuranic A- 1 of 1.S77 (v.50, c.53). Annual Report to Government and Inspector. .Ml Insurance Comiianies are ke| 1 under control uf the goNcrnment by the Ins])ector of Insurance, who annually, or oftencr, if he ileems ad\isable, \ isits t'.c I.cmI office of the comjiany and examines into its affairs, jiersonally. lie also lumis'ies e.uh ("iiipanN- with a s])ecial form of report, that musi be filled up aniuiall- and Ncriled by ,lij affidavit of the President and Secretary. I'his report gives full parti. i:lu of al' R'ceipts and IvNpenditures of Cash for the calendar year, also all .\ssets .nJ I ..di'liiies at the end of the year. This report must be made within a month v( tiic clo:i of ll j year, iiv dupli- cate, and fyled in the office of the Inspector of Insurante. m m — 228 — The Book-keeping of Insurance. The t'orii.s of books following tliis arc suitaljle lor a " MiiUial " Ijiisincss. 'IhtTC is much more routine reiiuiret! for a Mutual ('oni[)aiiy than for a Joint Stock Company, as in the Stock (^om[)an\' liie caiiital is fixed in siiares and issued just in the same way as those of any Mereaiuile or .\hinufacturinL; Company. I'he registers of pohcies and expiring risks, gi\en for ihe Muliial Conipati)- liereafter, are nuich more elaborate than would be reipiired for the Stock Conipan)'. on account of the I'remiimi Note, Reserve Capital, i\:c., and the strict account thai should I'c kei>t with eacii [lolicy, so that an assessment could be intelligently made, i( it was I'ound net:essar_\' to call for something more than the deposit of 25 per ceiU. maLJe on the I'renu'um note at the time the insur- ance was effectetl. \\"e propcjse to gi\e forms of registers suitable for the work of a purely Mutual Fire Insurance Company, belie\ 'ng that if we tlo so thiTe w ill not be any difficulty in adapting them to a Joint Stock C!om[)an\' that may be formed to carry on the business of insurance. Instead of the rather iiUricatc entries, e.Nplainetl hereafter in .Mutual Insurance work, for the taking in of new business and tiie e\i)iring of the polities only a simple entry would be made at the time of insurance such as. Cash, I)r, 'i'o I'reniium .\ccount. The Premium Note ^r Undertaking. 'I'he "Premium Xole or L'ndert.iking " are terms a|)plied to the obligation entered into by the assured, by which he agrees to pay to the association, as they may require, all sums, not exceeding in the aggregate the amount of such undertaking. This premium note is the cr(y>//r// /.k/.v/.s of the Mutual Insurance (.'ompanies. It is on the strength and security of these that the company or association that has no shareholders can give insurance. The following is a form of imdertaking $50.00. r- '^- ^ - > O _ o > — — u 3 r. Owen Sound, Mar. 17, 1892. I, lli.NKN W. I'i.iKii., being desirous of becoming a member of the Sam IN .Ml rr\i, lii^i. Insirami. Ca)M1'a.\\, for three years from the seventeenth il.iy of .Man h. ,igiee to hold myself liable to pay to the said .Xssociaiiun, at such times and in sach maiuier as 'lie Directors thereof may determine, such ;;:;'.ounts as mav be rcc|uired from time to time not to exceed, in anv case. 'i'hnt\ Doll.n-s. II. \V. I'l'.rRIE, Lot 10. Con. 6. Township of Derby, Kilsyth Post Office. ir//»C.S.S .- 1\. I 1. MiCl I.I.I ANli. The following is an indorsement, or agreement, that must Ijc written or printed acrcss the lace of the imdertaking in reel ; Any oclion which may Iw hvir^lit i>r u'liiiHiiuwi in a Division Court in respect or on account 0/ this Xote or undertaking, (>r any sum to I'c assessed thereon, may l>e l>rou_^ht and commenced a;:^ainst the maker hereof in the Division Court /or the division ivlicrein tlic head o(]ice, or any agency 0/ the conipa'iy, is situated. 2 29 — If an ordinary fninie (hvelliiig were ])cln'j. iiisurLd in a Mutual Conipans- for $1,000 for three years, the company would take a prcmiiun nnU'. a- uiuk-rlakin;,'. tor tlnvc per cent, of the risk, or $30.00. Then, on this undertakings ihcy would collect, ^ay twenty-five I)er cent, in casli, or $7.50, besides a fee nr$i.5o for the a^eiit for uLikini; an examina- tion of the premises, &:e. The residue of the piuniuni note of $^2.50 is called It'i'.si'rrc Coy>/7n/, and the journal entry of the company on re .-(.ipt of this and all other under- takings and casii would be : Ca.sh, Dr.. $7oo. Reserve Capital, Dr., $:;.;.5o. To Undertaking .\ieount, $30.00. When the policy expires and the residue (jf thi' jirenuun) note, or undertaking, is returned to the insurer, there is $22.50 of the reser\e capital parted with, and, suppose the actual cost of the insurance f(jr fire claims :\n'\ working expenses w.is $6.40, and that nothing were being returned to the insurer, there would be .1 -urp'us of $1.10, which 'vould be carried to Reserxe. The entry v.ould be : Undertaking, Dr., $30.00, To Reserve ('a|)ital. .$22.50. learned Premium. ') 40. • I Reserve, 1.10. Suppose that the $1.10 were refunded in c.isli, the ikui of the entry crediting RrsiTVe would be changed to ('ash. We do not wish the reader for one moment to im.igine that a lournal- entry is made for each policy, as this is not the case, f.ach jioluy is entered up in a Register for the purpose (see page 232-3) and the totals, for a month, usually, are Journali/ttl at once. The same is true of the expiring policies (>ee I".\pir\- R^gisti'i-. p.ige 23SJ. Special Accounts in Insurance Book-Keeping. It is propo!-y ;. "e a short descri|)tion of the accounts that belong only to Insurance Hook-Kcepin,. It • not jirojiosed to deal to any great extent with ordinary ICxfJense Account i' !' va •lous di\i:aiais. such as Rent, fuel, .\(l\ertising. Printing, St. ilionery. Salary, &c. "■ • <■ dinary book-keeper untlerstands them well enough. We will touch on Special .\cc()ai~'s ini : 'cut onlv to insurance wi rk. /*V/'C (Jlitiin Ai-vDHiil. To llie Dr. --i,lo dI' this account are cliarged all sums paid on account of tl-.e losses of the nu nilar.--. ( )n the ( 'r. sidi' we wonUl place any sums received from other C()m|)anies lor any portion ol the ri>k> that we rr iiisiiiid with them. The difference would be the net -t lor \\\\: claims lor the year. ^l(/('nci('s Arctiii iif. To lhi> .iccduiil we ( hargi,' the ex|)enses of app;)nuing agents ; keeping them posted in their work, anil the co^l of inspectiiig their books, records, \-c., IK'riodicidl). I'^{rt[nsj)'i-H(ni.i(( ac( oimt all sums paid out for tra\'''!:: -I.; ^-'ilmiscs, fees in connection with ilie inspection and settlement ol fire claims against the so( iety. l^ndertdkiii;/ Account. \\\ credit this account with the entire amount of the undertal;ing or |)reinium note received from the member, and debit the account when the ■J, iKmSttiitMl f : I /^'•ii l> ■! ^Il premium note is irturncd lo tlic meiiilHT at llie exjjiration or tiie termination of the policy. Though this account represents the ol;l illations of nieml)ers, yet the real account that does take charge of tiie portion of the |)reniium note that is an asset is the Reserve Capital Account. This Undertaking .Account does not represent either a resource or a liability it is simply used to complete the ccjual Dr. and Cr. of the Double ICntry system. Jicticrrc Cnjiitdl Aivoimt. In this account we i)laee on the Dr. side the under- taking or premiinii note that remains as an asset if the Company after the deposit of cash lias been credited on it. W'iicn a policy expires or is cancelled, and the [iremium note is returnjd to th^' maker, the Reserve Capital is decreased, and this account is credited, (see Journal Entries of J{,xpiry and Cancellation Registers.) 'J'he balance of this account shows the residue of premium notes held by the association as security for the payment of fire claims, i\:c., in the future. Cituvclh'd lii'j'mul AccoHul. In this ,"i v\e place oii the credit side all sums that it is'])roposed to refund to members as nt .jriu'd |)reniium on their cancelled policies. W lien this is sent to them in ca^h or an) r way, this account is debited. The balance of this account, if any, shows an\ unearned premium on cancelled jjolicies not yet sent out to the member. ^{(jfufs' Uoiiniii.s.sion. I'he name of this account imi)lies that to it would be charged all sums paid out to .Xgenls as Commissions, bonusesv'xrc. for doing a large business. J\i',si'rrf FniiiJ. \\"e credit to this account all sums retained in'the Association on both expiretl and cancelled risks o\er and above the amount actually required for carry- ing the insurance, (see ex[)lanation of Ivxitiry and Cancellation Registers.) If an extraor- dinary year of losses should happen at any time, and the insurance actually cost more than the deposits, the ilifference could be made up by charging it against this accoiuit. Eanictl Prciiiiiiiii Arcitiinl. Mutual Insurance Societies are run in the interest of the members, and not for the pur[)()se of making i)r()rus or dividends, therefore tlie name Profit and Loss .\ccount, or Loss and Cain .\ccount. is not an ajiproijriate title for the account into which the working accounts are annually closetl. The profier title for such an accoimt woukl be Earned L'remium -VccoiuU. When the annual closing time comes at December ^^ist. we close all the \arious branches of I'^xpiiise and Fire Claim Account into Larned I'reinium .\ccount. The entry would be, l^arne'l l'remium .\ccount Dr. 'i'o l\xpense .\ccoimt. Lire (.'laim .\ccount, i\:c., iVc. On the Dr. side will therefore be charged all the tost of the insuraiK.e. If an)' profit has been made by getting interest on Hank .Vccount, or investments, or for any transfer fees, extra risks, \c., these will also be closed into the L.anied I'reiuiuiii .\ccount, and will ajuiear on the credit side. AMien the [)olic:ies expire, or are cancelled, the entry that writes them oat of the books writes into the credit side of this account all the iiortion of the cash deposited that was required to cover its share of the working expenses and lire claims during all the time such i)olicy was current. This eiUr\' apiJrDjinates the premium and places it over against all the working ex[>enses and tire claims that were charged against the cash dei)osits of the policies still in force. i'he amount that the debit side exceeds the credit side of this account is the total amount of the ;.'ash deports of the existing policies that have been paid out for working exi)enses and lire claims- the real Earned Premium of the policies now in force. i'he difference between the balance of this ."ccount and the total sum of the cash deposits on pohcies now nirrcnt, \vnu)d he thr iincanu-d portion of the premiums paid, and this amount should always be sufticient to re-insure all the ri^ks in another Company should the Company cease business and go into liciuidation. The Policy Register. This book contains a record of all the particulars regarding each policy, from the time it is received into the office until it has expired. It is especially the record of the policies as they are received into the association. 'I'hc totals of this hook are brought into the other books by Journal entry, generally, monthly. This book bears the same relation to the nw/ww^"- of the policies that the l'2\piry Register does to the oulgomg of the policies when they expire. It will not be necessary for us to explain some of the columns to any great extent, as their use can be readily understood. C!ot,iiMN No. I gives the distinguishing number of the policy. This applies both to the policy and the application. Columns Nos. 2, 3 and 4 refer especially to the agent who insured the risk. Ivich agent is required to number his applications conseeutivel), and, should a batch of applications be lost in transmission by mail, the loss will be discovered immediately. It also gives an idea of the iiuantily of bilsiness done by each agent. 'I'he agent's name and fee needs no ex[)lanation. Coix'.MN No. 5 gives the date of the policy. Coi.UMN.S Nos. 6, 7,8, 9, 10 and 11 all give i)articulars as to the residence of the insured. Column No. 12 gives the term of the policy, that is, the time that it runs. ('OLUMN No. 13 is the amount of the face of the policy : that is, tiie ain( unt (>f the ri>k carried. Column No. 14 has a record of the amount of the untlertaking, or premimn note given by the assured to the association. C!on'MNs Nos. 15 and 16 give the sum paid in cash or note asa payment on aceount of the premium note, the one taking in the cash i)ayments and the other the notes- These columns are Journali/ed, to bring the policies into tlu' Ixjoks. It will be noticed that the 15th column in the Policy Register and the 4th column in the Cash Book agree. Inasmuch as the cash is taken charge of in the ( !asli iJook, we will Journalize it from there. The Reserve (!a|)ital .\ccounl will be too great by $30.50 alter the following entry has been made ; it w.ll be all right when the Cash Hook entrv is uKule. Bills Receivable, Dr., .$ 20.50, Reserve Capital, Dr., 183.50, To Undertaking, $204.00. The Cash Book entry for colunin 4 will lie : Cash, Dr., $30.50, To Reserve Capital, $30.50. If it is iloircil Ici Uci'p ;i I.cilgcr account with the aiiuuint .tI risU, ii <\-in In' ilcitic vi-ry simply : Policy .\ccotmt. Dr.. $7,300. To Risk .\ccount, $7. 500. Most comp.nnies only keep this ricord in the Policy Kejjis'er liy r.irryinij il fonsard. m 1 ;iri :].i:- 1 ' . :■ , •:»•!• -I-,;- U'-l I?. I ;^ . - mjki ii; 1; ■ ■ 1 .'1 .... i;' '' i 4 [''i -|: if 232 Policy Register of the Safety Mutil Fire Month of March, 1S92. .^6 ;2 Agent Dale. Name of In- sured. . W. ir. I'etrie J. k. Boy;! .■\. E. [ones W. Duke J. M. Adams Post Office. 9 7 9 2 7 I § 6 4 8 3 7 Town- iCounty. ship. ; 3 I 3 3 Ain't ': Am't of In- of Un- sur'nce (lerta'ng DEPcxsn-rr'^ -7—. — «>'« Cash. |s.ii.Niite| I'jjJ^ '621 1622 1623 1624 1625 46 47 86 20 21 \V. Wilson Jno. Brown E.W. Waits II *> so I so I GO 1 SO • 50 Mar. 5 II I ,1 IS II 12 II 23 Paris Tara Wiarton Clinton .Vlton Walt<-n Vespra Kepjiel Bruce Mono Hrant Bruce (irey Huron DuHerin $1,000 Soo 1,400 3. SOO 600 $7,300 $ 30 00 22 00 . 42 00 i 92 00 1 18 CO 1 * 7 Soj ;* 5 50 7/6 '92 1 '" 5oS;5,92| 23 00; 4 50 4:'99! 1 .?204 00 $30 S0!«20 Sol 1 i 3 4 5 6 7 8 10 11 12 13 11 1.5 16 IJ Column No. 17 gives the date of tlic payment of the promissory notes given for premium. CoLU.M.v No. 18 gives the number of the new policy under which the property is insured the next time it is renewed. Column No. 19 repeats the pohcy number, to save tracing every poHcy from left to right across the long pages of the Register. Columns Nos. 20 and 21 contain a recoid of any special payments for extra risks, transfer fees, &:c., and the date of such payment. Columns Nos. 22, 23 and 24 contain a record of the first year's charge against the premium — in this case it is 12 per cent, on tiie undertaking. It will be noticed that the rate is much higher than those that follow. This is because the work- ing expenses of the coni[)any -the cost of management, l)ook-keeping, i^c. — are made a first ctiarge on the premium for the first year. In this case the years that follow only are charged with the net amount of the losses by the fires of the year. The three following sets of columns are simply a repetition of those of 22, 23, 24 : Column No. 25, it will be noticed, is the fourth balance column. 'I'his is the balance of unearned premium when the policy expires. I'"our assessments are required for three-year policies, because they seldom begin at 1st of January, and will, therefore, run into four calendar years. Columns Nos. 26 and 27 contain a record of what is done with the surplus of premium. 'I'he policy that was cancelled had .$5.52 returned to the policy-holder. This is put in the refund premium, while the other small balances not refunded are placed in the Reserve fund. See further points regarding this in connection with the Expiry and Cancellation Registers. Column No. 28 contains space for remarks of any kind relative to the policies, &c. 1624 1625 Safety Mutil Fire Insurance Association. 2 3 DEPOSIT. . .When Cash. 's.ii.Notei I'^jJ « 7 so I 23 ooj * 5 50 7;692 10 50|8;5,92 1 4 50,4 992 $30 50.^20 501 15 ^16 IJ Spcci 1893 1801. 1894. 1895. -." al pay-' When '■'it ■■\'''-i:*s''T ' Ual- jnd A^sJ^ n.'. Hal- s^il A^se.;^!!'! Hal- '4ih.\rsLSMn't. lial- Ki-fiin i'^ ments. Paid. 'Kate Ani't. ' ance. iKait .\m't. ancc ;Kau.\iirt ance. Riif.Xin'i. aiici'. '^'"■"' 621^ 81 002/8/93 L12 1^3 6oj §3 90! 04 Si 20 ?<2 7c' OS 1021 ■ 1622 50 4/9/94 .12 ■ 1623 .12 ■ 1024 12 ■ 1625 .12 l\LTlltlli Kociw Riiiiarks. $1 .-)() $1 '20.01 $0 .SOj $0 !«)! 10 30 31 2 64I 2 86.04 s; I 9S.0S 1 10 SH.d 5 04 s 46.04 1 I 6,s 3 78.05 I -1 10 I (i.s.ol I 96.04 3 6S 8 28. 02 t 1 ,S4 (i 44 2 34.04 : 72 1 62 05 iio 7- 01 1 liL' (i(>j II 04 2 16 (>() 'Trans, to J. 'I'olton 42 I 4(i| I 1 4(i $") 'I'l lI'iL'anccllfil 18-4-94. (» i,s :i4 M 33 33 34 35 36 37 28 .s given for V is insured left to right extra risks, against the I be noticed se the work- ig, &c. — are le years that he fires of on of those c balance of re required y, and will, if premium. er. This is jfunded are connection It will he noticed that the results of this hook are carried to the Ivxp'ry Register, and that this hook keei)s an account with each policy separately, showing the cost for carrying the risk each year and the balance, if any, left over at the termination of the contract of insurance. If [jolicies were insured on the cash system, the surplus remaining over on eacli |)olicy would be the Net ("rain on the policy to the company. It might be suggested that the lApiry and Cancellation Registers might be dispensed with when this book is used, 'i'hat is so if the hook-keeper wished to journalize each cancellation separately and almost eveiy e.xpiry separately, because the i)rder in wliich tiiey are entered up in this hook is not the oriler of their expiry, ist, an ai)plication may not reach the head office to be entered uj) for a cou[)le of weeks after its dale ; another may be insured a month ahead of time or more. This is especially true of insurance on farm property. Tvvo policies occupying adjacent lines migiit he two months apart in the date of their expiry even if taken for the same term. Then there may he a difference in the term of the insurance one might i)e for three months and the next for three years. Tlii.s book is not suitable as an Ivxpiry Re^'ister. Into the Ivxpiry Register are gathered from all parts of the insurance Registers all the expiring risks for say a month, and all are journalized in one entrv. .\ list of all expiring policies in an agent's district is sent him together with the old undertakings. He will call on the niemher, return his old under, taking and insure his jjroperty again, taking a new ajiplii^ation aid inemium note. It is not thonght necessary to give any special form of Renewal List for agents here as it could he easily devised so as to gi\e name and address of policy holder^ and the amount of each undertaking returned. It is customary to keep each month separate from the others, and to make a sum- mary at the end of the year. In this way the amount at risk is carried forward. To the balance from last year add new business and deduct the expired and cancelled business, to get the net at the end of the \ear. ies, &c, i'^ i i 234 CASH BOOK AiXD BANK 1 Date. Namks. Policy' No. Cash on Applic.'ii'n Cnsli on \ole. Iiiter'st. Transfer Fee. Agent's l''cus. Sundry R'ceipts Totals- t 1 Iialiiiu!(' ford 1 1 8 20 Mar. 6 H. W. IVtric 1621 7 50 7 50 M 6 W. Duke 16.14 -3 00 , 23 00 ., 6 J. 1). Simpson .263 S 40 .iS ' 50 10 o.S M 6 S. \V. Hill 1461 13 60 I 5° ! 15 10 n 6 \V. Injurani '. 2()6 3^ 30 50 .18 50 50 3 00 I SO 1 Ualance for'il 2 2 00 64 38 Mar. 7 "1 ^ 4 ,-, « 7 s 10 38 1 « 9" — ro The Cash Book and Bank Account. The following form of (!asi) liook anank Aecoiinl will he found ([uite simple. It is on tlie same plan as the one on )iat,'es 12S-9, ami use-l upon the eoiKJition that all cash is deposited in l)ank and all jiayments made 1)\ eiieque. On accuunt of tiie great disparity of number (jf entries on the I )r ami Cr. sides of the ('a>h liook. tlie entries of payments will look ratluT slim in comj^arison widi nnmher of entriis of receipts ; in large com[)anies there might he a hundred receipts to one i)a\niei,t. ( )ii this .iccount many of the larger companies keep a ( ash 1 )ehit liook for( 'a.-h l\ecei|)ts only and C^uh Credit IJook for the Payments — such a di\ ision of the aho\e t'ash liook is between coliunns 1 1 and 1 2. Coi.fMNS I AMI 2 are the ordinary date and name columns common to all Cash Books. CoiA'MN 3 gives the Register iuniil)er to \vlii(li the Cash is to l)e a()plied. Column 4 headed Cash on Application t.ikes charge (.fall |)remn.mis paid in cash with the ap[)lication for insurance. It is a lu>i payment on premium note, paid at the time of takuig the Premium Note, 'riiis (\)rresi)unds with No. 15 in I'olicy Register. Coi.i'MN 5 is for Cash received for Pills Receivable. .Man\ persons have not the ready mt)ney when their risk is taken, and a promisMiry ik te is taken us a first payment on the Premium Xote. Coi.i'MN 6 is to enter all stuns received for interest into. Column 7 is for tr.insfer fees received for (1) the transfer of a policy from one person to another in case of sale : (2) transfer from one person to another in ca^c of mort- gaging pro))erty ; (3) transfer of pro[)eit\' iVom one buikling to another. Column S is for agents' fees that are not collecti'd ,it the time the application is takeni but are included in the sliort-tlate n(ae taken as the lirsi [laymeiU of [jremiuni. Column 9 is tor entries that will not go into the foregoing columns, such as Loans, Re- payment of Investments, etc. Column 10 is for the total receipts from all sources. >).■> nr> 8 20 7 5° 23 00 10 08 15 10 50 64 38 10 38 10 Tr|BLireincc AsHoeieitior|. ACCOUNT, MAIiClL 1SU2. I?nnk Agout. lU.MAUKs. i,i)j',i( |,"' Cliuiiuca. I'.iiliuice. , '''.JJ"" foiifi/ Ualancu for.d Deposit T. Short. 1). Hilts. Balance on liand, 55 00 228 40 •6 34 2864 8o> 21) 1 9 So' li 10 38'! 65 38,1 11 Balance foiMl li 12 13 ^^T 2691 40 f)8 2675 06 69 2S64 80 164 •20 LcilgerAuoouiit. Fire Claim. Expense. lU IT 18 The Dr. side of the jouniali/etl at once as CdiAMN 1 1 gives the agent's name for whom the fee was collected, ("asii liook could i)e carried forward for a month and all follows, either a day or a month. Cash Dr. .fsA.i.S To Reserse Capital, .$30.50. M Hills Receivaltle, 22.00, " Interest, o. 1 S, ■ 1 Transfer I'ee, 0.50, " .\gents' l''ees, 3-co. The C'r. side of the Cash Hook which is Hank .\ccount as well is as follows : CoiiMN 12, a colunni for remarks or i)articulars regarding any entr\. Coi.iMN 13 contains the cash deposited in tlie Hank. This colinnn gives the Dr. of Hank as well as the Cr. for Cash. Cni iMx 14 should contain all the che(iues drawn against the associatit)n's funds in th^ Hank for both elements of cost in insurance, viz., ^\'olking I'.Npenses and fire Claims. Coi.i'MN 15 gives the Hank l);ilance every transaction. Ciii.f.MN iC) is the f)lace fi:r the chc(|ue nund)er Uy which a payment is made. C'U.iMN 17 gives the page in the Ledger where the various checpies are jiosled, and CoiiMN 18 gives the Ledger title of the account to which the cheipies are i)osted. 'i'his C'ash liook is the same in style as that on pages 128-9 but tlifferently arranged. All the payments may lie [losted dircctl) from the Cash Hook. It is just as well to take in the balances of Cash and l!ank with the Trial Halance direct from the Ca.sh Hook I 1 Assessment Schedule. This s<'lu'(luli' i^ mack' nut to ,is(\rtaiii iMch \ri\r what ratf per cent. 011 tlu' uiuIlt taking slioukl he (•h:i';;e(l against each jiuliiv lor iMincil infrnium lor tlie year. 'I'liirc will he ill eacli year twenty live (lirfereiil rales ol ass^■ssment on the vaiioiis policies : ist. One general rate on all policies that are neither ne'v |)olicies nor expiring during the nirri'iit year. 2iul. A rate for each of the tuehc months of espirini; jiolicies, based on the lire claims for that portion of the \ear. I'or e\ainple, tlie risks cNpiring in l''el)riiary will he assessable for the fires of January and IVInuary. 3rd. A rate lor each month's i>->iie of new policies. This will consist of a rate based on the fire claims from that month to the <.-\)i\ of the year, and the workii'g expenses for the yivir. It is customary to charge a higher rate for short term policie.i, l)ecausc the work on the books, tvc. the ( ost of managciiient is as much for a shcjrt term policy as for a long term jjolicy ; iK'iice, llu'y charge the working expenses against the new policies for the fust year. The assessments are alwa)s made on the fice of the undertaking and deducted from the cash deposit in the I'olicv Register (see cohimns in it numbered 22, 2,5, 24 and the space intervening up to 25). The rate in the Policy Register is not the same as the one given in the example of assessment s( ludule, and is n;it gi\en with any desire to produce the various rates in the R(.'!iisler. Safety Mutual Fire Insurance Association. ASSESSMfLXTS for the Vvdv IXUJ for /'.'.r/tiri,,;/ /'o/Zc/cv. I ' ! 1 I : I'nilcrt.ikiiig t tidcrlnkinj; lirvlance, bcin;.; Fire Loss : Total 10 bu .Moiulilv KL'Ci.'i\'(.(l. Total undertaking at end of year .... January I'ehruary .March April May lune July August September October November December .$,5,552 80 2,276 21 4. ''^5 7 15 4,.Sio 5.S 7,086 I 7 (),9,S4 ()G 7-5.U 01 6,()i)7 10 4- 1.1' ,vi 2,852 7c 2, 1 15 05 iv^o8 7;, I $57,509 7.3' \]iiri-(l a.nl aniouiil al fur Month. .\.s.>"i (aiH-elk-d. oik! (if \ car. lor. KaU'. $22 1.501) 62 2 2 I., 51; 7 24 2U).4y4 ,lO 2i8,,527 45 215.2 M) ,55 -''0.757 7,5 -04,370 25 i()8.885 80 H)4,6i7 44 H;2.204 i)2 4,018 15 11)1,0,51; 47 2.850 48 i()o.,504 04 2,469 Soj 189,142 97: I .$,5,665 18 4. i7() 15 6,024 00 7,1) 18 08 ' 1.547 7') i''.,i7- ,1^ 1,5.018 46 I 1.265 4(1 ''.54,1 '"^5 .$,500 00 $joo 00,3 16 208 50 508 50 Ij. 5 00 5 1 ,5 50 ;:( ,5 00 516 50 ;4 •^,5'^ '^""J, 3,027 39 '/-• 18 ool 3,045 39 i;i 641 85 1 ,^,687 24 Ij/B 454 70 4,14' 94 2 '6 1,400 00 5,541 94 27/H 250 DO 5,791 943 41 1 00 6,252 94 3, '4 1,350 00 7,552 944 237 — llu' iinikr ar. 'I'luic licics ; or t'X[iiriii^ on llie fire lary will lie ;l of a rate :hc workii'g nn polii'ifs, for a short uses a{i;ain^l liictcd fnini 24 and the as the one to proihue ICtl'ti. liL- Mcinllil) lor. Kale. It nv.y l)c (.M^ily (ll)^c^v^•(l ili.ii the pnlic \ ill, It h.iN t\|iirLil in Jannary has only a ri,L;hl t. lie ciiarj^i'd witii the rate on losses lor January, or 3 U> of one per cent., and the one that exjiired in Dicenilur is char^eahle with the entire year's I'lre rate, or 4 ' on the nndertakini,'. Now, it is also e\i(lent lliut iho^e policies that wore d.ited in January should lie ch.nj^ealile with nineh umre lor ilre^ than those- dated in l>e(einlier, the Cnst with 12 niiintlis' hres and the latter uilli onl\ one nioiiths Ihes. The total rate for the _\ear is 4 , or one third of one per emt. per month of an a\era.L;e ; hence, the loUow. ini< will gi\e rates ^utlieientls' acruratc lor a.-ses^nienl purposes : j.ni., 4 ; I'eli., 3?J% J Mar., .^ ' ; ; .\pnl, ,] ; .May, 2 ■' ;. ; June, j', ; July, _• ; .\u(,'., 1-',; '; Sept., i"; : Oct.. I ; N(i\., -' ; ; Dn.. '- . 1 1 i-^ .il-^o c \ iilent that the gener.il rate for the policies th.il are neither cxpuin.L; imr heni^ renewed (luring the cinrent year is 4%. Now, the next is the rale lor wdrkini^ expenses Inr the year. This is assessed (jn the new undertakinj^s recei\ed durin,;; the year, which, in this case, amounts to .$57,506.73. 'I'lic workitiL; expenses (which should not include the amount paid for lues, nor the co.st of inspecting them and adjustiii,:; the loss, and the lra\ellin,L; expenses in connection with such sottlcincnt) are $S, 61 7.50, which would lie 15 on the amount of undertaking; hence, the real rate chargeable against the new policies would lie 15 4- the fire rate for the nionlh. for exan-.ple. the total rale for June policy would he 154-2},!/, or 17'.! . The plan of charging all working expenses to the new policies is '2 i .39 IJ2 24 lj8 94 2 '6 942JH 94 3 '■ 94 3 /'4 94 4 Apr. 4i 1()24 ;i.")(M) !!•.' (M) li'.l (K( ^ •_';{ (H) 111 .".(i ll-_' ."> .V_' Sent in Cish, 5/4/94 1 ii 3 I .'> -.ervi'. 'I'lii^ book woiiM 1)0 added up ami journali/ed iiKnithly. I lir disc iiiitinii i,( (•ohiiiiiis mimljers i, 2, 3, |, 5, 6, 7, of llie IC.Npiry RLf^isdr t\;u tly appl) In liiis hock ; llu re is no use repeating; lluin iii'ie. 'I"he earned pieniinni iieie lieing ilie ainiiunl ol ihe lire elainisand working e\j)ensi;s to the (late of caneellalion. Cohninis Nos. 7 ami 8 eontani tiie untamed portion of the cash deposit divided, a small i)or'ion to reserve a?ul the balance returned to the retirinji ineinher, 'I'he premium refunded on caneelled risks would be kept in a separate aeeoinit from refunds on e.\|)innj; policies if there were such being paid out Ihe following woidd be the Journal entry : Undertaking A i\ Dr. .fg.'.oo, To Resersc ( apital A c. .fdij.oo, M |'',artK(l rremiinn .\ r. •f).5'), 'I Reserve fund A e. o.yj, >' Cancelled Refund A c, 5.52. Not only do wc put full ( aiuillalions in this book, l)ul we |)Ut in it all reductions in risk, undertaking, etc. Safety Mutual Fire Insurance Association. Ea'pii'iJ Ri'(jis(cr Jar tliv month of March , ISli.j, Date. \... of I'Dlicy. Risk. I'lid.r. takin;'. C';\Ii:lal. l)L']Mlsit. Earned I'ri'iiiiiiiii kosiTVC 1' uikI, Agent sL'Pi to. Kmiarks. Mar. 5 1 62 1 $1000 *.P ■'?22 50 A^ 50 Jl6 Oo ■^0 l)0 \V. Wilson n t \bli Sou •^ i() 5f) 5 50 4 S4 ()() " M 15 II. JJ 1400 ■\i .)' 5" III 50 1) 04 I 4(. .\. Weir. 11 20 1625 600 IS '.? SO 4 SO .5 90 54 J. Smith. 1 1:! 00 tS4 00 2,S IXJ 24 44 3 56 T 8 "10 The above Register shows .1 delaii of all the affairs connected with e.u'h policy that has run its full term of years and la|)sed, the coiur.u't of insurance lu'ing terminated by expiration of time. Column No. 1 gives the date at whii:h the policy expires. Column No. 2 contains the number of the jjolicy according to the Poli'.y Register. Column No. 3. In this column is placed the amount of the insura.ice risk carried. Column No. .\ contains the lace value of the inidertaking or preir.ium note taken from the insured at the time insurance was effected. Column No. 5 is a record of the Reserve (lapital which is the balance of Premium Note not paid by the insured but held as a guarantee against losses, and now to he returned to the agent, who returns it to the insured member when he calls 011 hmi to rem w his i)olic\'. Column No. 6 contams the amount of cash paid in by the members for their insurance as payment on I'remium Notes, sometimes called assessments. The sum of the Deposit and Reserve Capital is etjual to the Undertaking. ajO — rcdiutioiis in Cdi.imn Nil ailnl 'I'.. II It iiuum shiiw^i ex|ti'nsi'S and !iii' r';niiiN mi ilicy l( wli.it It 1ms a< Uiaily cost for working; r till' thru' ycirs It is tlic -.inn dl'lhi' several years' assessuKnls accciiJitij; l<> llie Uc^iMer. CoMMN No. H rniitaiiis llu' h.ilancc ol tlic deposit (;( i asli that has Hdl Ikcii Used ii() in payin;; workinn I'xpenses and li I'tind. It liilLllit he I all< d )s^es li\' lire. 'I'he coliiii.n Is hi aded "Re'«eive iiipUis, and it' It Well' the [iiactii e (jI the siicicty to pay hai k tn the policy Imldir all suiplus iiol rciniired tor carrying his risk, this colninn nii.uht he headed "keliind rreinnim," or it' say half the suri>lu.s were placed in U'eserve and h ill ictinned to the ineinher, then theioluinn could he div iileil into two, one hall heiiiL; in a surplus or Kcserve lund column and re- tained hy the company, and the other half returned to the poli( yholdcr or aijplied as a part paMiieiu on a renewal of the poliiy. It tv'^^Ul he well to state in this coniuM tion that it is a mistaken policy to rclund all surplus not requiri'd for ('..uryiiij: the risk, as m fas orahle years the insurance cots less than it is worth, and when two or three unfavorahle years (Duie on when the losses are large, the coinpain is either partially crippled or eUe a special assessn.ent is made on the niemhers on account of the prcinium notes, the cnllcction of which cau ^es an- no\ance and expense. Column No. 9 com, mis the n.imc lA the .ij^eiu to whom tin. •Ren il i 1st d old paemium note is sinl. a;i(l u lio I- to look alter the renewal ol the pi licy. Cni.fMN No. K for rem, irks, usi i,ili\ iisei I for incmi). lel.itne to tl renewal. 'I'he totals of this hojk are jk WDiild Ijc llie ri-vcrsu (if wh.U lu when il caiuo in. wcr ; rchiiii 1)1' charj;o( The Rcfiiii'l I'rciiii Willi ih would (1 |ini(l uiit. ilil when 11 wa.s i^cnl oul, >t' il^cir whin all rufiinih hail been The Annual Statements. reniium Note 1 now to he he calls on It is necessary, according to the in.surance l.iw, to close the books at the end of the (.Calendar year, :ind render a sworn statement to the Ciovernment during the month of January. The (liueriimeiit provides a form lor this, gi\ ing all the details of its assets, liabilities and in\'estineiits. There is no i ci-d to dwell on this here, as it must he I'lUed out on the (io\ernmeiU form. It is necessary, howe\er, to h.ive .1 geiieiMl iiueliiig of policy holders to elect Directors to carry on the business for the next year, and to [iresent to the shareholders at this meet- ing a statement of receipts ami expenditures of cash for the year pa',t, and a statement of assets and liabilities showing the present standing of the Society or .V.ssociation. These — 240 — fe'f;! I . statements are necessary according to law. It will he noticed that no statement of losses and gains is recjuireil. 'I'hc reason for this is that these Associations are formed to give insurance at cost price, and not for the purpose of making profits for any person. What concerns the [jolicy-holder most is to know whetiicr or not iiis money has been legitimately expended. This he finds out from the statement of receipts and expenditures of cash. It is onl\' Trading (Companies that {)ul)lish statements of losses and gains. We can gut along without tiic i.oss and (lain Account in Mutual Insurance, the I'.arncd Premium Account taking its place, and being a more appro[)riate title for tiie Ledger Account. The following are sample statements : — . Safety Mutual Fire Insurance Association. St(ii<'iiu'nt of Recciijln a ml E.cpemlitures of CukU for the Year ISiU. Reckipts. Cash on liaiid ami in liaiik from 1S!)0 I'eci'ivcil on ri;(lertiikiiig8 Kxtia Hisk.s, 'I'lansfer Fees, etc. IiiteiTst and Uineount Investniunt.s repaid Receipts from sundry other sources ." Hi ;iiii) v^ •iO(HI (M) !ll(i .-)-2 EXI'ENI)ITURE.S. Directors' Fee3, including travelling expenses .... Salary and Auditins; Fire Claims . . . . . Refunds to inoml>er8 on Expired and Cancelled Risks General Agency, Inspection of Losses, Valuations, kc. Ue-Insuiance Agents' Bonuses, Commissions, etc. (iovernnient License Advertising, I'rinting, Books and Sta- tionery . . - - Postage, Telegrams. Telephone, etc. Furl, Ligiit. Care of OHJce, etc. Taxes and Insui'ance Interest, Diecount, and Exchange Furniture and Fixtures Investments on Mortgages Cash on hand at Head Oltice, if^'lXi 47 „ in Bank of Hamilton 4842 '2« *()()! m •_'r)4;< ')() 7.-)34 37 181 ti.") Kilt) 27 !)2 (i!) i:« 80 '25'2-i <7(i'-'2 00 ."lO!) 8."> 4S(M) 00 ;)i(i2 !)2 770 10 23.-. 47 4842 2(i loo (M) (ill 12 110 77 140417 40 Ll.MULlTIES. Amounts in Suspense Sundry .Accounts Balance Assets over Liabilities 827 24 13 M 103141 !.-• $103181 89 l|103181 81) of losses d to give 1. What ;itimately i of cash, c can get Premium Account. ISIU. mM HO •_'o4.S .')0 7."):J4 .•17 d 181 t),-. 11)1!) t)4 44 10 lotm (H) 147 81 11- i;i-.>4 44 .•>48 o:{ .-)(),-) 70 lor. 27 ■$163181 89 Loan Companies and Building Societies. It is the purpose of this department of this work to treat on tiie iiook-keeping of Loan Companies and Building Societies. The term Loan ("ompanv is appUed to any Joint Stock Company chartered to loan money on Mortgages or Keal I'.state. Such companies are generally formed in the usual way, just as those were that have been already illustrated. (i) By Special Act of either Dominion or Provincial Parliament. (2) By incorporation under the Joint Stock Companies' Letters Patent Act of either the Dominion or Provincial Covernment. In Ontario there is still another provision for incorporation, that is by registering art- icles of incorporation in the Oflice of the Clerk of the Peace of the county where the head office of the company is situate. This is intended primarily for Loan Companies of a local nature, and especially for that class of co-operative loan companies known as "Loan Soci- eties," "Building Societies " "Building Associations," etc. I'his incorporation in Ontario is obtainable under the authority of Chapter 169 of the Revised Statutes of Ontario of 1886. It will be quite unnecessary to detail the matters of organization of a lo.f n company under the Joint Stock Companies' Letters Patent Act, as the procedure would be exactly the same as that outlined in the Creamery Company, the Stone Company, or the Steam- ship Company already illustrated, and further, the special books suitable for the routine of Real Estate loans will be given in connection with the "Building Society"' work wc are about to take up. We will not therefore illustrate a company organized specially for the purpose of making profits for shareholders and paying dividends to them yearly or half- yearly in cash. Building Societies and Loan Associations. The first name above quoted might convey the idea that such institutions were formed by contractors or others for the purpose of buildiug /loiises, etc. This is not the case, as such societies rarely if ever engage in the building trade, hence the name is at least slightly misleading, and counted by some entirely a misnomer. The title "Building So- ciety" is the old name applied to them in the Old Countr\', where they were first organ- ized. The term "Loan Society" or "Loan .Association " is more appropriate. Definition. — A Building or Loan Association is a society incorporated to receive small sums on deposit from sharehoklerrs as ca[)ital and invest such money among the shareholders on mortgages on real estate. Such mortgages are usually re-payablc in eight to ten years, princijjal and interest in monthly or weekly instaln.ents. Dorroxvlng S/uirt'liohlcra are those who, besides being shareholders and investing money regularly in shares, have money borrowed and are repaying it in regular stated payments. Their investments on shares being calculated at the end of the term to liqui- date the principal. Non-horroii'i n(f SlutrchoJdcrs are those persons who arc investing small sums weekly or monthly and accumulating their earnings as ca[)ital of the society. The Co-Opcratioe Plan. — These societies are generally formed among persons of liir.ited income, usually those earning wages. They are formed on the co-operative plan, all furnishing capital in small instalments, such capital bt:ing lent only to members to 242 \l\ ■I enable tliewi to Iniy or hiiild houses fcr tlieinselves and pay the money hack in small, re;iiilar payments suited to their earnin^\' i)i)\ver (hence tiie name iJuildin;;' Societv). The memliers are just paying hark monthly what would he retjuircd to pay for rent or tlure ahoutb. If they onh paid rent, the)- woukl he no better off at the end ot' ten years than they were at the beginning, hut if thfy worked through tlie lluilding Society they would own the houses they lived in and he [)rofite(l additionally by the increase in the value of the projjerty. I'/ie Mamiijciurnt. — Ivu-h borrcrvei' and each in\estor i>, a sharehokler having a vote for every share he owns. The borrowers and de[)ositors manage the affairs of the society by their otiticers elected amuially. In many societies every loan is [jlaced by being put u|) at auction at the monthly meeting of the soi'iety. Shitres (i)id /ii^IhIdi •h^.s'. — '!"he shares in building Sncioties are usually $200 each --sometimes they are only $100. On a share of $200, pa)meiUs or instalments are usu- ally made of $1 per month, or 25 cents per week. On $100 shares the [)ayments or instalments are generally about 50 cents per month. If more than these rates arc charged the amount so overcharged is to proside for high salaries or e\tra\ag,uit working expenses. To'iiiiiKift ii(j Slocli. When the monthly instalments above mentioned ha\'e been paid in regularly for eight to twelve ye.ns the instalments and the accumula'.ed dividends will amount to the |iar \aUie of the sinre. If interest rates have been high and expenses reasonable the shares will probably mature in 100 months (S',; \ears). When such stock reaches its par value the amount can be withdrawn by the owner in a lump sum on the surrender of his certific.ite. thus tcniiinaliii : the stock. PiriiKiiicnf Sfocli." In a building Sik ietv a permanent .Su)ck book may be opened whiih ma)' be signed b\' such shareholders as m.i\ desire a i)ermanent investment. This stock though ])aid up in weekly or moiUhl\- injitalmenls ( annot lie withdrawn at maturity. It then becomes a /(77//(7//(7// investment on which a fixed rati.' of u-aialK jirovide that such withdrawals shall receive the approv.d of the directors. Such wididraw.ds ajiply only to the hoklers of terminating stock held by non-lmrrowing sharehoklers. In case shares are withdrawn the whole of the ])rolUs accumulated on such shares are jiot |)aid out. .\ percentage ol' them are usuall) retained and this is a source of profit to th(jse that remain in the society. -43 Fiucs.-'Vo iiuliu'c incmhers to he luonipl in. tlicir payments a fine is usually im- posed on all persons who fail to piii ii|) their nir.ney when it is (.lue at the beginning of the month. This is usnall)' 5('. jier share, '['his goes -to swell I'.ie profits of the eompany. What the individual delint to the society, e\ce|it il were made u[) by hues thus imposed, 'I'his is a s(;urce of revenue lo the societ) , Mrnibrr.ship Fcis. — When a person agrees to take stock a small membership fee is charged him on each share —usuallv 25c. to .$1 00. In a local society this forms a part of the revenue oftiie society, but in those of a national tluu-acter such membership fees are given wlu/lly or partly to the agent who solicits the htock. In the Local Society tiio fees form part oi the revenue of the .Society. In the National Societies such fees seldom ever reach the coffers of the institution. Local rcrsus Ndliotidl Si)c/flii:s. — The National .Societies are organized with a view to getting shareholders where the Head ( )ftict> is and all over the country as well. The Local Societies cor.'ine tlieir business to a town or city, and some adjacent territory. The I,ocal .Societies arc the truly co-opeiative CAjncerns. They are formed by the mem- bers for nuitual benefit, both as investors and borrowers. 'I'he e.\[)enses are limited- -the investments are within sight of the ol'ficeis and every thing is under the control of the shareholders, who will see that no injustiie is done to any member. Tiie Nationals are fre(iuently formed by specnilative ciiaracters who desire to get a fat salary. Tiiey hedge tiic stock around with all sorts ol "/e up a huge portion of the revenue in expenses of management. Tiiis is not neios^arily the case !)ut it seems to be [)racticed to a :onsideralile extent. 'l"he members know little or nothing of how tne business is managed Tiiey cannot stand thi- e\[>ense of attending the meetings dieiice they nuist abide by tiie conse(iuences of wh, never action the man.^geiiient sees lit to l:ike. They are ncjt tridy t:o-operati\e, and t!ij system of small monthly payments is entirely unsuiteil to a widely scattered niembershi|), and the constant mailing of money tires the shareholder, and makes him wish to [)art with his shares even at a loss. TcnniiHilliKj Sociclics'. Such a S;n iety would be one that woulil issue only one series of stock, and wheif that was fully jjaid u|) it would be re-paid to the shareholders, and the Society disbanded. A Society of this kin 1 is n ),v vjry sjldj:n formed. \m < I miook, agreeing to allow his shares to remain after they have accumulated monthly calls and profits to ecpial the par value of the shares. After the full value is paid up, a regular dividend is paid the shareholder in cash. (2) The share may be partly paid up and allowed to accumulate [irofits until ii reaches par value. It tlien claims a regular cash dividend. \\'hen shares of $200 each have monthly payments of $1 per month, and it is expected to mature, -then, in say nine years, a share in the same series i)aid cash down with the intention of accumulating profits, would be sold at about $80. The $80 paid down at the beginning being about ciiu'il to (jx$i2^--$io8 paid in on monthly dues. The third plan is to pay up the shares in full, and draw dividends yearly or half yearly as interest on the investment. Division of Profits. V.\ cry half year, or sometimes only every year, a genera balance of the accounts is struck, the profits arri\ed at, a certain portion of them is set aside or apportioned to the stock, and the residue either carried to Reserve or Surplus Account, or carried at the Cr. of Profit and Loss, and the books are closed. The total book value of all the shares, (including apportioned profits,) plus the amount in Surplus or Reserve Account, should equal to the difference between the assets and liabilities of the concern. Loans are made to shareholders on Mortgages on Real Estate, usually on the Sink- ing Fund plan, that is, rcqiayable in e(|ual annua! instalments, the interest part being credited to Interest Account, and the payments over and above this are made on the shares, and when the par value of the shares is reached, they are made to pay off the principal and licpiidatc the loan. Sometimes loans are made on pron.iissory notes. In either case the stock is pledged, or hyiiothecated to the Society as security for the loan. Loans are made on one of three plans, whi(lu\er the Societ)' chooses to adopt, viz., (i) The Instalment Plan : (2) The Xd J'/an : (t,) The Gross Plan. Premium is the amount offered hy the horrower over and above the rnte of interest set by the Society in order to get the loan. The I)istaln\ei\t Plan. — On this plan the borrower is accommodated with the full amount of his mortgage, and he pays iiack ])rincii)al and interest, and premium, in monthly instalments continuing over from eight to twelve years an ecpial sum each month for each of the three elements of cost of the loan. Suppose a loan of $800 were made on four shares of stock of $200 each, at 6 per cent, interest, and 30 cents premium per share per month, the monthly payments would be $4 on shares to meet the principal , $800 X .06 K . , . ,• • 1 ,1. and ^— — = $4 per share monthly lor interest, and 30 cents x 4 = 4)1.20 premium- in all $9.20 monthly payment on the loan during the entire time it has to run. If the stock matured in 8 ^-j years, (100 months,) Uie loan would cost loo x (j.20 -^$920 — or J45 — e of interest $800 to repay the principal borrowed, and $120 for interest. This is the true plan of making Huilding Society Loans. It is favorable to the borrower and to the Society. It will be noticed that the principal is ])aiil at the end of the term by applying to it the shares of stock at their maturity. The four sli.ucs of stork will, when at full value by accumulated profits and monthly instalments pay the loan. They will just equal the loan. The Nit Pl(i}i. — If a loan of .$800 cash were to be made on the Net Plan, and the premium allowed the Society by the borrower were .$40 per share, the mortgage would be drawn for $'ooo. There are five shares discounted at the rate of 20 per cent., that is, $40 off each, leaving the loan on rhe shai -ily $160. This amount taken off is in lieu of the premium paid monthly in the Instalment Plan — the interest would be paid on the actual amount of cash lent, vi/., $800, which at 6 per cent, would be $4 per month. The dues on the five shares taken in this case would be .$1 per month each or $5, in all $9 per month. The Gross Plan is similar to the Net Plan, except that interest is charged on the full amount of the mortgage instead of the actual amount lent In the example cited above, viz., $40 share discount, a cash loan of $800, a mortgage of $1000— the interest would be charged at 6 per cent., or .$5. This is a dollar more than on the Net Plan. The payments on this loan, monthly, would amount to $10, which is $5 for interest and $5 dues on five shares. The (Iross Plan is not considered very equitable to the borrower, as he is charged interest on money he nev( r received. It has almost entirely fallen into desuetude. C()-Opvr(tfive nankin;/. The Iluihling Society not only makes loans to its members on Real Estate, but on promissory notes as well, in each case taking a hypoth- ecation of the stock as collateral security for the re payment of the loan. The investing in shares of a Puilding Society is to a certain extent equal to putting a fixed amount monthly into the Savings Bank, as the stock is withdrawable in many Societies on call with a reasonable lite of interest. Most Societies after they have a paid up capital of $40000, open a Savings Rank l)ei)artment in which deposits are taken and repaid at the call of a member. This gives any person the privilege of placing money at interest with the Society without becoming a partner. 01 being liable to fines, t\;c. Building Societies also receive money at interest on Deposit Rtceipt on the usual conditions of 15 days notice of withdrawal. In Ontario when the paid u[) cai)ital reaches $100000, the Society may issue debentures and boirow money on them at a low rate, and lend out on a higher rate on mortgage. The SoiiiTcs of Profit. — A profit is any increase, gain or advantage, made by the Society otherwise than by an investment of Capital. In the Building Society the dues on shares are an investment of Capital — they are part of the rtvff/uf, but not a part of the profits. '{"he followini: are the cin'ef sources of profits : — ■ (i) Interest on loan.^ on mortgage or promissory note. (2) Premiums paid on loans, whether made on the instalment, gross or net plan. (3) Fines for failure of punctual payment of dues. (4) Transfer fees for the transfer of shares. (5) Membership or subscription fees paid on each share when subscribed. (6) Part of the apportioned profits on shares withdrawn : For example, the book value of shares in a certain series might be $39.80, and the withdrawal value only $38.50, li mi 's' 11 \ m — 2.'6 — ■ he diftcrencc— $1.30 — would be a t^nin to'llic association. 'I'lie withdrawing member takes out his iiiveslnuiit iirti interest at a certain rate ])cr cciU.. and leaves a portion g( ll e pic fits hct ;u:(U' l( r him fer tluj^e wlio remain. The Working of a Society. We eannot belter illustrate the working of a society than to i^i\e the lules of a well manage(' institution, vi/. : The Owen Siumd lluildiiiL; and Sa\in^s Soeict','. Its stock is terminating, and this feature is the one we set out to s|)ecially illustrate. We advise a c.'^reful perusal of these rules before reading u[) the deseriplions of accounts that follow, or examining the various books lliat are illustrated hereafter in ihis connection. Rules of the Owen Sound Building and Savings Society. l\C()ltf()I!A'J'!()X. 1. Tliis S()ciot\' sliall 1)1" ciillfcl tli" "< )\veii Soniid corporiitt'd under iuid with all thi' \iowois a'ld |ir •2SH7, ('liai)ti;r Kill. nutL'is <:( Huildiiii; and Mavinj^'s Society," and is in- mftvivd liy I'cvisi.'d Statutes of Ontario OFFICl'S. , 2. '.riio cliief ollico of tho Society shall he iit "Aleir Block," in the town of O'ven Sound, or such Oi' ""v l)lacc us the Directors may from time to time amioint. oBJixrr. ;i. The ohjcct of the Society is the .Misin^ hy iiaynieiits on Stock, liOaiiH, and accunudation (jf (irolits, a Stock or J'"unds for making advances of money to borrowers on Deiiosits, and Ijy bv inortiiaLTe on the Kccnritv of real (stale, on tiie sii urilv of (1 otl;er d otlii )roved jjroperty ise as allowed bv said act. 'I'o afford a safe investment for ca.iital tf) lunchasc' and liold that property for the ]>nr|i()se .incl beuclits of the Society and j,'. nerally to exti'eise all the powers can bo exercised under saiil act. SCOl'K OF lU'SlXlOSS. 4. liOans may lie made on pro]ierty and to persons ami cor|iorations ni any part f)f the I'rt vinco of Ontario, "». Tho Capital Sti shall be issued ivab' CAPITAL. >roi)!': OF sunscr.ii'.iNd. :)f this Societv shali he issued in series, in sliarcs of *'J()0 each share and as the Board of Dirictors shall direct, and shall not i \cced MUO shares at any one time. .Ml persons on takinj^ stock in the Society, shall litlier peisonally or by attorney duly a|)pointed. sij,'n tlie rules or the livdaws in a book to bektpt for that imrpise. Shares shall be botli permanent and term;:iatin,u. LIAF.II.Tiri'.S. (!. Js'o sliareholdiM- as such shall be liable or cliar^ed wiiii t'le piy. due by the Society beyond the extent of his sliares in the ca] ital of the i\rA\Ac;F3[KNT— Ai'roi\i'Mi:N"r < ■• n! any ilcbt or demand . ty not thtn paid up. n!l!i:C'J'0]!S. The Societv shall be under the mana^;i'nu nt of a l;^.. r' cf I'dreetovs which 1 consist of lice 1 y rotation every '.v:d I':. :i'.air.der of the nine members to be elected by ballot. Tliree of t'.ic llirec;.!!.-. : ! ;,ll ;,n 1 e; twelve montlis but shail be eli).;ilile for re-election. Vacancies oecurrinj.; in the Jioanl of Directors may be lilL'i Tir i'l" r, term by the Board from among the i(ualilie. The Directors shall have full power m all things to ailmiuister the all'.iirs of tho Society, and may make, or causj to 1k' niaile. for the Society, any desi/ription of contract winch the Society may by law enter into. ArroixT:Mi':NT of officioks. 10. The Board of Directors at their first meotini; after the annua' meetirg shall elect from among themselves, a President, \'ice-Presideut, and Treasurer, they shall appoint a Manager who may be one of their own number to sjrve for such term as they may arrange. 247 lU'.MOVALOF Dllil'.CTJliS. 11. Any I'iri'ctor of tlio Soi'iuty nmy bo rcmovtd by ii two-Hiiiil \iitv nf tlie wlmrcH roiircHont- 0(1 in iK'i'HOii or by |)ni\y iU Miiy iiii'.'tiiifi of t!u' Hhiiri'liildi rs ciilUd for the' |nii'|ioso of tiikiiifj iiction in n'^:ii-cl to Hucli rciiioval. Ten (hiys notice of sncb nK.tiiiL! shiill lie f^ivcu siicli I )ii-i'ctoi- by notice ni;iili.Ml pi-L^piiiii iuui rcf^istLTed luldiTSScd to tbo last known I'l.Ht Utlicf iiddiLSS of sucli Director. :\M;KTIN(iH OF DIliDCTOlJS. 12. 'I'he Directors s!mll I.ol I nic'C'tiiif;s of tlie lioai-d for the triinsaetii.n of tlie business of tho Society at tli.' oIVk'c of the Society on the (irnt ^londay iu each month at the honi- of S p.ni. si:\i,. " 1;!. 'I'lie Hoard of 1 )irectors ■ '.lall liaxe full power to adopt and use a common or corporate seal and if found ni'cessai'y, at any tin; ■ to niter or renew it. Di;TlKS()l''l)li!i:('T()llS. ] I. 'I'he Directors shall do all acts timt nniy bu ncceaHiir,\ foi' ad\ancin^; money, and for recov- ering; and obtainiuf^ ri payment thereof, and for cnfnrcinj' payment of all inleri st accruinj,' tbert^ from, or any conditions attached to sncli advances, or any forfeiture eonsecpu nt on tlie non-|iayment thereof, and {;ive all necessary rce.ipts, ac!es for the same, and do anthori/o and (exercise all .icts and |)ow< ,s whatsoever requisiHe or fX[)edient to bo done or uxcrcised in rela- tion to the said purpoa.s. i'U];sii)i;\'r .VXD nici-: ri:i;siDi:NT. 15. 'I'he rrcsiiration of his term of ot'liec all moiii-ys, Ijooks and papers which may be in his jiosscssion belonging t" the Society shall be delivei-rd to bis successor. He shall [iroduce ihe l?ank liook of the Society for examina- tion by the l're»ident and J)irector3 at each monthly nH'< ting. 01'FUi;i!S ■[•() MOM) ON j;i!. IS. This Society sliall notecase or ixjiire from neglect on the pai't of tlu- stockholders to idect l)irc'_;tors at llie time mentioned, and all |/irectors eljeted sliall holdoHiec until their successors are diilv ehos u. SODK'.ITOKS. I'.l. Thf Directors shall from tiiii ■ to tine- app^'iut a Solicitor. lb shall exaini.-e all title papers and jirocnre the necessary starches for )iro) city f'tfered to the Society as security for money loaned, and certify th(M'<.sult in writing. lie shall pre( are all bonds, mortgages and other writ- ings, and shall be entitl.d to recei\e from the l.orrejwei s >uf\\ ci)in[jensation as the Hoard of Dii'cc- tors mav deterinini'. VAf.liATOU;,. ■JO. Oni.' or more valuators may, from lime to time, be aiipoiiited by the Directors who shall examine and value all [iroperties offered a^i security to the Society, and such valuator or \ahuitors shall be the agent or ag.'iits of the borrower, and sliall in all caaes render at the ?ilani'ger's otiici'. a report, in writing, to the Directors of the value and state of such jnoperty in such form as the Dirociors shall prescribe, and who shall ha paid such fees by the borrower as the Directors think reas(jnable. si:cuuiTn:s of officfps. •Jl. livery oflieer or otiicr person appointed to .uiy office in anywise concerning the receipt of inoiiey sliall funush srciirity to the satisfaction of tho Director^; for the just and faithful exeiaitiiui of the iluties of bis oilic. The saeiirities may consist of the bonds of guarantee companies ami tin) premium shall hi paid by the Society. IK W- — 248 — ANNUAL MEETING. 22. Tho annual goncra) nioctinn of tlio iiicnilicrs sliall be held in the montlis of May, June or July, ivH the DirectorH iiiiiy hcc lit, to rc'ccivo tho nimuiil rciioit nf tlio tnuiHiietionBof the Society for the iHiHt yi'iir, and to ikct tho Oincturii (of llieiiisuin}^ tenii of ullico, luul to trnnHact anyother necouBiirv huHii.eHx. IMODi; OF VOTINCi. 23. At tho annuiil mcctinf,' the (lection of Directors required Hhall ho hy ballot, and at such election eacli ineniher Hliall he entitled to one vote for each share held hy him, and voting by proxy duly appointed Hhall he allowed. SI'l'.CIAI. AIKKTINOS. 24. Kpeeial ineetinKn of thn KtockholderH hIuiU ho eonvei.ed by the rresident, or at the written request of live nienihern, Htatinj^ the time, place and ohjeet of such nieetini;, provided that no buai- nes8 shall bo trauHaetod exeoi)t that for whicli the nieetiu},' was called. NOTICE OF MEETINOH. 25. Notice of tho annual and Kjiecinl nieetiMj^'H of the HtockliolderH shall ho mailed by the Man- ager to ciich nieinlior liv(! days i>ri(ii- to siuli nieetinf,', and nine or more members shall constitute a quorum for a meeting of KtocldioldtiH. iNlONTHLY M1:ET1N(!S. 2(i. Stated monthly nieotingH nf tlie momheis kIwiII he held the first Monday in each month at tho oflic.o of tho Socii tv, in tlie town of ( (wen Soimd, for the purpose of loaning out the funds of the Hociety, and to attend to the fininicial aflairs of the Society generally. When tho lirst ISIonday in the month fulls on a legal holiday, the monthly meeting shall be held on the following day. ADJOURNMIONTS. 27. Any meeting of tho memhors or Directors may bo adjourned by a majority of those pre- sent. SANCTION FOU EXPENSES. 28. All expenses before being incurred must be sanctioned by a majority of those members of the Board who may be iiresent at any stated meeting. The security oiTered for a loan by any bor- rower shall bo approved or di8ap()roved hy the Board of Directors. SlIAUIMlOLDEHS'OBLKi.VnONS. 2',). F'ach shareholder shall he obligated to ])ay punctually his monthly duos, interest, prem- iums and tines (if any), and in all respeits to comply with the ro(piirements of Chapter 16i( of the Kevised Statutes of Ontario, 1NH7. and the ruks mid regulations of the Society. The monthly dues of all kinds shall be jiaid before s o'clock p.m. on tlie first .Monday of oa(di month. Each and ev3ry stockholder who shall neylect or refuse to pay his monthly (bus, interist, premiums and fines, on, or before tho lirst Monday in each month, shall pay the aduitioual sum of live cents on each and every dollar so due, but no lines shall lie charged on lines. APPLICATION OF PAYMENT. 30. All payments on arrears shall be credited in jiayment of fines first, and the balance on other arrears. Whenever money has to he advanced for a member's insurance if it is not repaid before the second meeting following sncli advance a suflicieiit sum shall he taken from any money paiil in by such member and apjilied to pay such insuriince iiist(iic' of hi iv;; ai>rlied to the payment of his dues, interest and iireiiiiiiins, and tlie same rule shall he iip|ili(.il in casj it becomes necessary to advancu money for taxes, or otlui wise, and whenever i.iiy liuis i\w (lie, ia\ mints shall in all cases be credited in iiaynieiit of tines lirst, and other iiii!( 1 Iji'ie ss n xt. I'.acli smk' every stock- holder for each and every sliare of stocli tliat he may hold in tii" Society shall pay such subscription fees as the Directors sliall from time to lime direct, and the si.m of 81 c r( fiiinliil. M1;N ol'SOCII'.TY. So. The Sr(ui't> Hhall have a iirifcrcntial iicii on the stock of any ^tockhoklpr for any debt due the Bocioty, and in addition to all other nnuiliis the Sociity m»y have Hiiih stock sold, and the procoedH ai)iili(,'(l towards payment of such indei.iedness or at the; option of the JJoard of Diroctors the share or shares may he declared forfeited. l!i:si;i!VH. I'esorvc I'Mnd. and ciirry ii |ioilii>n of the 1 time to lime ii^ tlii'\' deem iid\isalile >\n iilf yearly profits to a iirovinioii a({aiiist itCi. The |)iiect(fore or hereafter subscriheil, shall be at a premium, which said premium shall be determiiieil and payahle at the lime of the investment of the share in permanent utock and not otherwise, and shall be iiroportiouato to the profits added on the then existilifj per- maiiont shares in the Society up to the time of IIk} last jieriodical ileelaratiou of profits, together vfith a further sum jiroiiortionate to the total reserve, less what shall liavi^ been previously coiitri- huted to reserve by the share, (if any) to^'elher. also, with interest on the total sumiiayable as abjve, from the time of said last declaration of |)rofits at such rate as the Directors shall from time to time deem proper. On the investment of terininalin},' shares before the period of maturity in per- manent shares the full proportion of [irolits sliall bi^ added. rOWlORS 01' LtXVNIXG. 42. The Society may advance to members on the security of investing or in advancing shares in the Society, and may receive and take fr^m any jierson or persons or bottita corporate real or personal security of any nature or kind whatsoever us collateral security for any advance made to luembers of the society. 4;J. Tiie Society may lend money to any person or persons or body corporate at such lawful rate:) of interest on such terms as may be aisreed upon without recpiiriny any of the borrowers to become subscribers to the stock or members of the society, but all such borrowers from the society ^^liall be subject to the rules of the society in force at the lime of their becoming borrowers, but not lu any other rules. lif - hi ;W ill — 250 — I.O.WS ON sii,\i!i;s. II. Stock luildriR tiildnK liiniiH fiiim tlic fiiiiilM nf llu^ Sncii ty on tlo srciirity of tlioir hIhh ••tl'iili I'liv iiiti-nst l(ir (lie siiiiic i'V( TV iiiniilli l.i tlic MMim^''T. If tlu' (Iuch, intcrcHt, I'liicKor nioiill )ii'i.iiiiiiiiiH, (I V litlu I' Wlllcll till' Slocldi •IS uu'icc to iiiv at tlic liino of imrclmHiii;,' moiicv an f( i( (1 to l( iniin Mtiiniid, till' I 'ill ('tors 11 mv cc mi 1 I |ii\iiu iilii of ) iinciiml, (!■;,'( the r witli all i'ltiiu • ' liiM H iiii'l |ir( iiiiiiinsi iiijpiiid, |iioi'cidii^4 iij^iiiii.st llu- liiortfj'nj.Ji' or Hcciiiity fur tlu' fuid lonii iiccordin 1(1 IllW. (1 cvci'V hharc luM in tlic Soidcty nliall Ix' ciitillrd to imrclias 1.1 I'Jacli tu( ndxr for rii loan or ad \;ii •.(■•• of %'M'O, iiimidi d the nccc Hsary anioi'.nt \k- in iIp' troawiiry, at sncli )irciiiinnM o\( r HiN ) ( i- (Till ]irr annum as may bo ajircid \i|ion. 111. 'I'll"' l>iric(nvK s) 111 II, lit the monthly ni'i'tin^.'^. di^|iosf of all !i]i|dicati(ins f ir loans as ni.i y he I)iiii'),'ht li fori' tlu ni. hut tiny may hIho },'rant Iomus at sncli otiior limcM as tlu'> 1 uiy H'"o lit. I'llANdlNCi SKCriM'l'V, 17. In casr any stoc'klioldii wIsIhk to chiui!:!' tlu' Kccin'ity olTorid for a loai' ho may do ko, at his (,\vn ('X|ii'nsi', without Ik in',' 'oniiHll d to rc|iay tlio money to tlio ijocioty, ■^)r(jvidc(( tliat tin' Oirco'ors ii]i|iro\i' of tlic rluui;.;!-'. I!i;i'.\v.mi;nt oi' loans. ropaid boforo ii:iturity on such terms us may be '.^rood on at the tiiii: ef [•^. I on lis mil V 1)0 ■Line tlio liiun or at tlio liiuc of r< payiiKiit. Sl'^CriJI/ril'-S, How TAiCI'N. r.i. .Ml scouriti s for advances on loans shall In,' taken in tho corpnrato name of tlio Kocioty. I'ltOCJUI'lSSIVK t,()ANS. ."II. In ease any |)iirt of tho security olTcroil for a loan consists of land on whicdi hnildin!,'H iiri to he ^■\■, cted or liii|)i oved as a condition of the loan, tho nioilov hIiiiU ■dvanced from tinu'to til o IS the Hoard of Jjiridtors shall consider safo, or ' tho Dirictois. HI II cirtillc'ite of tho valnators in tlie discrctiim i'oi!i'j;rrri!i;s. ■lioldor shall iieelect or refuse to pav his nionthly dues or lines fo the pel ieil (,f three moiiflis, his shares of stock may l)i> forfeited hv the Hoard of |)ir<'clors, whe If nnv terriinatmj; share till ill rev(it to the Society. 'I'hc )noiU'V liaid dues iinnii such shares lorfeitud less liii' and his proportion of cxpeiis^fs anil lossts bIiuII ho rcfimdtd. f.\1'i:nsi:s or loans. ."•-'. .\11 ( \(H.'iis"s incident to the completion of a loan sliall h:' dediicte 1 from tlioamount pur- cliiiM d hv tile horiiiwcr. I'OWJ'.ltS OF lU'VINd AM) SH[J-ING. ");(. The Society may Sill, distiosc of and ."issijjn tviorti,'nf;eH given or made direetiv to it, and may piirchas" inoilea^' s upon real estate debentures (,f any soci'. ty or ('oni|iany incorporated inidi r tho K.iid Keviscd Statutes of Ontario, ls,s7, cliapter 111'.), or any .\ct incor|ioi-ated tlierewitli, ilehiii- lures of the .Aluniciiial Corporations or of I'lihlic School ( !orpor,itioiis or Doniiniou or I'roviiuial Stor'k or ''ocnri.'ies, and may resell any sucli assijjnnii^nts or other instruments for carryinj,' the same into ctt'cet, and may also iiiako advancts to any person or iierscns or body coiporato upon any of the above menlioned securitits at such iMt(S of interest or discount as niav bu aj'roed on, when. d :)ftcn as the Hirectors iiiav consider dtsirahle in tl itercsts of the Hocicty. I'OWKU OV IJOIUIOWING, •V). 'I'lio Society may from time to time borrow money either by way of depositor by tho issue of dell, '111 'ros or debenti stock for such term, and at such rat'; of interest as niiiv from tiiiK' to tinio ho determine 1 hv the Hoard of Directors of the Sociotv, d the Jhiiird of J)irectors of tl Society shj\ll liavi^ jiowcr, u.nd lliey are hereby iiulliori/.'.'d to borrow from time to timo from any corporate Ihink. si;cT"i;iN(: o\ r.niHAi'is ix i-.ank. ')'). 'I'lic President, Treasurer and .Maniirjer are hereby authoiized to borrow at any time, and from lime to time, from the liank of ilannlton or other chartered Hank, for the lairposes of tlic Soi'iety, any sum cir sums, so tliat the total of such indebtedness shall not exceed Ten Thousand l>ollars at any one time, and the nionthl\- i-eceipts of all kinds shall be applied in repayment of all such advances. In I'asa the I'residcnt, Treasurer and iManayer, oranv of them do ,L;iveany (icrson d jiiiaranteo whether by bond, note or f;uarant.X', for tho repayment of money borrowed as aforesaid, tin's Society will, and docs hereby \<^veo to iudeninify and save Ihom h.irmless from and af^ainst idl and every ptiyincnt which they may he called upon to mukj under such bond, note, or gu.irantee. DlSCilAlUil-: OF MOKTUACFS, V/VC. "I'l. .\ll discliarLjes of niort'ia' js ami all iither papers necessary to be executed by the Soci should he sijj;ned by the President and ManaiHer, and the seal of the Society at'tixed, wlienever tl execution of such pa)iers shall be authorized by the Hoard of Dircctois. 2SI — i;^ t the lillli' I'f e amount ]'Hi- 'I'HI', noAIM) Ol' DIKI'.CTOTiH. 'i7. May rc(n.iri' iiMii-liDri'owiii.;^ Imlilcr of tiiiiiiniiliii^i slock to witi'dniw h icli I'orlioiiK of tin ir ntork iiH tin: Itouril iimy li\ for tlic piiriioKi' of |ii'i'\riitiii^' iiii iiii|iroliliililo iicciiniiilHtloii of iiioncy in till" tivuHiiry ])i'o\ icli'd Huid rc(|iiii'cniiiit hIniII lici.iii wii li tlio oldest sc I'icx tin ii in ixislcni'i', unil v itii tho liiHt Hiil)Hi'ri|ition ivc( ivud in tli.' miiil wnitM, luul woiUin;^ luck to tliiit llrst lilid willi tlio niiinu- f{oi's lUiil lifter a resolution of I lie 1 liii'i'torH tlvinj,' the stock to lie \< itlidniwu, iind noli<'( to tlie htoek- lioldtT niven liy let tcr, tln'ou^li tlie mail, to Ids last luiou n iuldnss, the same shall cease to draw any interest or |irolit. FltAC'l loN.M, SIlAIil'.S. .")M. (,)uarttr, half and llu'ee-(iiMrters fiMctioual shares, ma,\ he i.sueil with one or moi'e I'lill slinre or shares, for the |an')iipse of heiiif^ inuneiiiatel\ lioi'rislnirs',.'nieiils. l.'t. .Adiouniment. 11. Meeting; of lioard of iJircetors. a:\ii;ni)MI'\ts. (iO. Those rulrs slinll not In altered (u- ami iided exreiit at a sjierial nieetiii},' of stockhoMers called for that pur|iose, and in the n:inner prescrihed hy Section 10 of Cha|iter ICi'.l of the lievisecl Statutes of Ont.irio. (11. 'I'lio ^ranajlor's oHice shall hr open on the first Monday in cacli month from "J p.m. to H p.m. for the roceiiit of money. reed on, when, The Incorporation of a Building Society. !■ hy the issue ti-,'ini time to i\- time, and I'll Thousand whenever Hi' In Ontario a lUiilding Society may he IbruKd under C'liap. ii'nj of Revised Statutes of Ontario, l)y twenty persons sit;ning an agreement under sea! liy wiiicli tliey agric to constitute tlieinseives a I'liiilding .'Society and sign a declaration to tliat effect and dejuxsit tlic same in t!ie ofllce of t!ie (Jlerk of the I'eace in the count) in wliicli they reside. These twenty persons and all others wlio afterwards iiecome associated with tiiein as nicmhers, form the body coiporale and poHlic, having perpetual succession in siiareholders, and limited in hahilityas to die su!)scri|)tion of stock, 'i'he name must be mentioned in the agreement and declaralion and need not, necessarily, contain eitlier the word "Jluilding'' or the word "Society." The Shares siiall not be more than .$.|co each in par value, and payable in monthly or other periodic instalments. The instalmeius shall not be more than $4.00 per month l)er share. The money thus 'Collected is to be loaned to members on stock with niortgages on real estate as securiiv. m ii I I i im K n:'-h iiiti imrr !■ 't — 353 — The Government of the Society. A I'.iiildinn S(i(ifly is ^oviintd rwii iiinic liv llic will of it-, mcinlicrs and less l)y staliilc law tlian a joinl Slock ('uiii|iaiiy inc«i|i()ralitl iindir llic l.ctuis I'atcnt Act. The K'^islatiiin ill ( lia|). ifto K.S.O. gives a I'crlain aiiioiint of dirtctdry (■lau>c's in regard to tlu' mana,i^rnu lit :\\m\ ci nUdl of llic Socii'ly, luit nearly all is U li to lie rcgiilatecl l)y the iiuimIhi^ ill tlnii' iiy laws. We have given the liy laws and rules of the Owen Sound iiiiildmi; and S,i\ings Societ)'. 'I'hey ari' a \ery good set tnr any society where the stock is issued in series. They are very full and yet elastic I'lioiigh to he workalilu. The lilies of the society should lie wrilleii in a hook and suhsc rihed to b ■ each niem- her. If a rule is to he resi indcd or anunded or a new rule niado, a general meeting of the shareholders must he called for that purpose, and it must he passed by a two-thirds majority of those present in jierson or by proxy, and must represent not less than one-half of the paid up capital of the society. The Stock Book. When a person wishes to become a member or shareholder in a building society he signs the stock hook of the .'Society in ilic saiiu wa\ as tlu'\ do in the formation of a joint stork company on page fiS. 'I'hey .I'so sign the rules of the society in the rule book, agreeing to be hound by suth rules and by laws as at present existing, and any that may be afterwards passed in accordance with statute. The slock hook is the foundation of the society. In it all the liability to pay u|) caiiilal is created. It should he sacredly guarded against iiijuij hv fire or otherwise. The following is tin- form. OWEN SOUND BUILDING AND SAVINGS SOCIETY. ^r^look I ]( )C)k. We. whose names are hereto subscribed, a'^ree to and with each other to become stockholders in the Owen Sound liuilding and .Savings Society, ami take in the said six it'tv the nmnher of shares set opposite our respective signatures and seals, said shares to he vil the par v.ihie of $200 each : and v.e severally, each for himself, his heirs, execu- tors, administrators and assigns, and not jointly the one for the other, hind ourselves to make pa\iiient thereon and do all matters and things in relation to the same as may be reipiired hv the rules of the said society or by the Hoard ol Directors of the said society. liAI'K. SKINAI UKK, I.S02. ' M.iy I (Ico. .Mason, .. 1 TliDS. (i.iyiuir, ii .| Will. I.avcrly, ii .} I '.ivid Diikc, li 5 W. Cowie, The Ordinary Books, Forms, etc. The ordinary hooks generally known and understood we will only refer to and not descaibe fully. y/ic Ml)t\ilc J '00/r. -'J'he >.Tinute Wodk in the Hiiilding Society is just as necessary — 253 — as tlic Minute Book in tlio joint Stork ('oni|iany, and is kr|)l as imlir.itcd iVoiu pifv's ■;(> to 80. 'I'lie greatest ol cmi' slioiild he exercised to pri'scr\c a koihI ncoid nt iIk' lirnml- ings of hotli j^encml nieitins^s of Sliareliolders and of I )iie(tors' niei tini;s. StocI: (Jci'lijlitilrs. i^i\ Slock (Vrtil'icates are isMieil to the shaulioldcis in \hc building society as to the shaiciiolders in a joint stock coin|iany. iihistraled in liic ciilur pages of tiiis work. (See pagi' 7J), iliere is no iieid lo elaijoi.itc nn lln'm fuilln 1 lu ro. T/ii' Ti'tnisfir liitiil; lias ihi' same use as in stock loinpanies ahlmn^h iiKin\ ^.ha^es are witiidr.iwn instead of hiing iranslerred. (See jiane 75). The tTitiinuil in a luiihh'ng society is used in the way this hock is used in an\ oiih- nary i)usincss, and tlie riiiis for journali/.ing and the piiiiri|il(s of duuhii- cntiy ajiply so that there is nothiiiL; spn iai to he said re^;ai(iing it heie. .\ kinnviedt;c ol ihe naiuit' of tlie business and of the a(i'ounts that should lie kept will make the woik of jomnali/ing very sini])le. 'i'lu'Cash Hook is so coinpKiely arranged in rolnnms that lioih leriipis and i)aymcnts may he suintnid up for a montli and eitlici posteil direct from ( asli liook to Ledger, or the totals journali/.ed and tiien [uisted to the Ledger afterwards. 27*f' Lctfi/cr IS i|in'tr an important book in the building sociity. l\ is kipt jll:^l the same as in any otlua biisiness. W'c will gi\e hovvewr, the titKs ,ind de-ci-iptiwuis (jTsohic special nccomUs th.it ari' kept in hiulding societ) work. Special Ledger Accounts. The (l(ti)it(tl Slovix Avioitnf. Tiiis .iccoimt is kept slightly difiercnt horn that illustrated in joint Stock t'ompany work, and the rcascn lor this is tli.ii in a sl(jck com- pany the amount invested is not drawn out il a member wishes to letirc. llesimpl'. rnid"* a customer for his shares and sells to him .uul has the tr.nisfer recoidcd in the hooks o' the company. Now while this is permissi!)le arul fre<|uently done in building -'•' iet\' work, yet in the majoiity of cases the shareholder withdraw.-, his capital and inleiest tluie- on at .1 specified rate from the beginning of his investment. The witiidrawal iilea is \civ promincn; in building societies, so hrmly is it ingrafted into the \cry orj,ani/atioii ol" the societies that a -willidrinK'al ■i'altic of llie sh.ires in eacii series is trei|Uently laiiUid in ihi' "financial report.'" Now while the member renders himself liable to pay up liis st(,( k according to rules )et he is let out so easily ih.it it is not considered ncci's,>ary to ch.irge him with his stock. .Ml payments on accoimt of shares are simply jonrnali/i_d •■('i-,';i | )r. to Capital Stock. Tiie balance then of his account will aiw.iy.s show the net c.ipiuii in vested. The one objection to this withdniwal feature is the advantage taken of it b\ th^- f'»'uiders of the national socii'ties, who imhice persons to go into the buiinvs.-- with the express uitention of making money out of the wilhdiawals, thus trading upon and prcjiiting i)v the sho^'coniings and delimiuencies of the very |)ers(jns that the\' persuaded to join the sociLiw ■"invs Acvonnt. In this account on the dr. side will be found all sums of money paid in by shareholders on accotiiu of being behind in i)aying 'ip their instalnteiitson stock at the date ai)pointed. They are jotirn.ili/etl "Cash Dr. to lines Accoant," Interest on Loaii.s yireounf. — This accovml needs very little e\pl. in, ition. '|'he interest is crediti 'o Uiis account as i)aid in. There are usually several dil'fereiu iiUeiest accounts kept so .is to be able lo determine readily the amount of piolh (leri\el is charged with all advances on account of mort- gages ami credited when any om;- is paid olT. The balance of this acccimt will always show the amount invested on mortgage, antl should this not agree with the sum of all the mortgages then the difference will be on account of some amount or amounts not yet ad- vanced on one or more mortgages, but awaiting the completion of a house perhaps before it is paiil over to the mortgagee. Deposit .\ccoutil. — This account is credited with all sums of money deposited in the Savings Hank 1 )e[)art!nent, and debited with ail sums withdrawn. The balance of the account will re[)resent the lialanee on dcpONit on riccoimt of all the deiiositors, and will be eiiual to the sum of all the balaiu es on deposit as per Deposit I-edger. Deposit Itecii pt AciiUtut is credited wlu'n a l)e|)osil Receipt is issued for a deposit recci\ed, and debited when a Deposit Ree'eipt is repaid 1)\ us and the document creati.ig the liability returned to us. The balance of the account is equal to the sum of all outstanding Deposit Reci-i[its. This would agree with the balance of the Deposit Re- ceipt Register, where one is ke[)t. Loss and (i'lin Account. This aecount occupies a jilace in building society accounts not any different from wh U it does in any otlur business. Jn a society where tlie shares are issued in series e\er) >i\ months thc^ books are closed everv half year and the jiroilts c^^timated and all .leeounts showing eitlu r loss or gain are closed into the account as usual. The maj(jr portion of the net [irofits e\er)- luilf year are np|)ortioned to the stock, usually a fixed rate of di\idend, say 6, 7, iS, () or 10 |)er cent, per annum, This is written into an account \ariou^ly named, ".Share I'rofus Account, " ".\])portioned I'rcifits .\ccount," etc. An)- balance remaining over may be carried forward at the credit of Loss and (lain Account or placed to the ci'cdit of "Reserve .\ccounl." "Surjilus .\ccount," "Contingent Account." Share Profits ^Iccmint. sometimes called "Apiiortioned Rrofits .\cc:ounl' because they an; set aside for the shares from time to time and reallv added to them. .)ecoming part of tlie capital. The entry, "Loss ;,nd (lain .\ccount Dr. to Share Trofits Account," is made every half-year for the amount of the profits set aside every six months for the shares. In stock companies they are [)aid out ; in building societies they are accumulated. Ik -00 l'',a(h half year llic aiiidiiiU III' tlic lOuri; profils iK'lon-iii.L; to iIk- ,-,haiv.s tliai li.iw ln.-cii witluIra'Aii should he wi'iltcn oiit ol' this ad'oimt and cither into Loss and (lain direct, or ito tl le accoiinl headed "Inleresl on Shares withiirawii, vhici 1 account is aflcrwards sed into T,oss and (lain Account for the exci ftlie profits over tiie amount paid out to the shaieholders as interest. Su|ipose it were written hack directly into Loss and (i am the entry would he "Share I'rohls Account Ui'. to md Cam A( (Cinit. " if irito the other account, the entry would lie "Share I'rolU Account I >i-. to Inlerest on Sharis W iih- drawn Account. In some societies a Share I'rofn Accnunt is oj)ened for c\ei'\' series of Slock is.aicJ a!i(l they would he numl/i.red coustcuti\cl\', to correspond with the series of shares ihey helonu; to. 'I'he entrie.-. would Ix' the same e\ce]'t that the total >uui ciediled to ''Share j'rofits" would he divided int^.> the sever.il .Share I'lofit .Xcconnts. 'i'he chief advanlai;e to he deri\ed frian such a division as this, i-.. that there v,-ill he no lrouh!e to see hy the account helongin;,' to a scries whc.'i the series as a whole has suflicienl profile to mature it. I'here will he an a,:i;reement hetween the calculation kept \i\) in the series in tin- due;-: and fmes register on a share, with the Ledi^cT .Vccount with the profits heiongin^;^ to the v.hole series. If the work has heen jiroperly carried out thevwill a^ree and wlien a scrie,-< is closed, the s!i ire proIUs fur that series v.-ill he cloied. Ut'svrn' AcroKiil . Siirp/if.s AcroKtil or ('()nliii(/( ill . I cco^n*/. or whatever iLiiiTe the hook keeper may choose to give this accoimt is one into which th.e overplus of profit is carried h}- an entry. "Lo.ss ;i!id Cam Account Dr. to Reser.e .\ccount. Ilis ipiite similar to llie Reserve .'Vccoun: in a block c(;inpan\'. T/ii' (.'l(is/n(■( ii.tw iheii ih.ire will hi a l.irge accamuKition in " Rjie;\j ' o.' "S.irp'.u;" or ""C ):i:in,'_M' " fii i 1, a..i 1 the mituri ig shares have the largest siiares in such surplus as tiiey have the greatest amcuiil of cipiial ]ier share in\ested, and therefore hi\e lumi^lied ihe greati'sl 'jiiola of profits. In such a case the outgoing series wouUl claim the s.ime Iractional : Inrc oi' :he reserve thai their apjiortioned pnjfits hears to the total app'iriioned jirofits. Jf tl;e outgoing series weie worth par in dues and aj)porlioned profits the p.irticip.ition in reserve would increase tluir \alue and make them worth more tlnn par. 'i'lu' \v.iy usually adojUed is to mature die shares as soon ,is the I )iies, Appirtioned Troi'i's, and the pri/portionate share of the Reserve • ire t(jgether equal to par value. The m.ilured sluires would he dealt vviih in oni_' of Ihtce ways; (i) 'I'he horrowing .shares would he' applied in pavnieatof the mortgage. 'I'luf entry would he "( lajiit il .Sto;:k ami .\p;):)rti(ined l'ro'':s 1).-. to .Morlgige Receivahle.'' (-•) 'I'hose who desired to vvithdr.iw their money would lie paid in ca-.h. The entry woi.ld he "Cipit.d Stock and A'.ipoitioned I'rofits Dr. to (!ash." (;) Tiio-;e shareholders that desired to continue the investment as puauaiunt ^ro(k vvouKl l;e granted paid up sU ( k 1 ertificatt's. In this case the dues register would he closed uj), tlie Shareholders .Vc-i;ount iijiencd in a perm.inent Stock Ledger and dividends would 1)2 i)iid on it a.s in an ordinary joint Stock Company. Jil m — 256 — Series No. 1. Stockliolclcrs' l^egister of From May l.st ISoA Stockholders' Names Number of _?£?i'fi!?tJ2.'::!^i''LJi:5nLP?S5J'' |! May antl -, ^j Ad- I IJelin- j; o J Vance iiuent Smith, Toh" Wiaitoii P. O. Blown, fames Durham P. O.j Jones, Isaac j Ghatsworth P. O. Cane, Wni. Meaford P. O. 100: r)20 i?lO 00 I 101;I028 1021 4 ) 103 I>tlCS ¥100 00' Fine Dues ! Fines ■<,-) (HI I June 4 th I Dues !«.") 00 Carried Forward S2(! lV) 1"> oo.'jii ,-1 ;i ;{,-) oo§i 25' 10 00 4 20 08 0(1 54 00 4 00 :i (H) 4 00 3 (K) _|22 1810 (Ml.*;{0 458377 Oo|f2 0():!847J>0.§I 25i!$22 00 ~« 3 4 i Fines I .25 July 6th Dues 10 11 i§io 00 .20'| 4 m I 3 00 ^45j|17 00 12 13 Fines! Angiist tst Fintsl Dues $."> 00 5 00 i 3 00 m (£ .2o| 14 15 16 Examples of Special Books, The following forms of s[)ecial hooks arc liivcn hereafter, and a description of each is appen(3ed to it : (i) Dues and Fines Repjister : (2) I'reniiunis and Interest Register ; (3) Cash Book ; (4) Loans Record Book; (5) Defxisit Ledger ; (6) Deposit Receipt Register; (7) Bond and 1 )ebenture Register. We also give a set of 1 Lilf-yearly Statements, and an example of the mode of dividing [jrofil^ or a]j[K)rtioning them to the shares. Dues and Fines Register. The above register on a single page carries all the [)articulars relative to payments on account of stock for six months. I'^ach half year the names are written, ;ind the totals of payments up to the date carried forward. 'I'iie two sources of revenue from the share- holder are monthly instalments, sometimes calkd Dues and I'ines, for failing to make promi)t payment. The instalments go to increase the investetl capital, while the fines are carried into the Current Revenue .\ccouiU for the )ear as part of the [irofits the same as interest — it is really iiUerest charged the shareholder for falling behind in payments_ Though the fuics do not increase the pro[)iieti)r\- interest of the man who pays them, a strict account is kept of them, sd that at any time a man can look up and find h.ow much he has paid into the society for eacii and every pur[)ose. There is another item that goes to increase the shareholder's Capit.il Account — those are the profits addeil to e.ich share e\ cry li.Uf year. Now it will Ijc e\ iileiit that all the shares issued to any series will be ecpial, (if i)aid up,) all starting at one time, and — 257 — >ter ofl IDu-C© eirjcl Kiocs or| Sheires. Ill May Id 1802 to November Isf, 180.:. Forwarded to page 5 1 . aly 6 ues th 1 Septeml Dues cr 51I1 Octol er ;ir(l Cr. I>UC' 1 Fines Total Date 1 Dr. .■\inouul Forward fines i Dues FineiH Kinfs Dues KifCN No. Shares Am uiu Dues I'iiKs .\ilvance Delinquent $5 (K) m $5 0(1 85 Ofl .•=!125 00' ftl 00 Nov I -. $120 00 SI 2") 00 81 00 85 00 ) (H) 5 00 1 1,-) (HI .2,") 10 (HI 210 (III .'i oil " 10 240 00 240 00 3 00 [ 00 1 S (X'. .20 4 00 !)2 0( .00 " 4 07 20 02 (HI .60 1 ^5 20 i 00 3 00 3 (XI 3 00 72 00; " 3 •72 00 00 1 3 H ! 20 19 i» •i 1 22 23 21 28 29 ion of each t Res^ister ; t Receipt atcments, ares. ;h \yments on lie totals of the sliare- ng to make ie the fines tlie same payments, lys them, a b.ow niucli .Account — jnt that all I time, and keeping apace the one with the otlier. Now it is quite unnecessary to continually add the profits of oacli share in every series. .\ much simpler method is to enter up to one par- ticular share in each scries the profits for the half year, and let this share constantly increase by regular moiithi) payments and additions of interest. W'c might call such a share a "Typical Share," JKcause it is a type of all the shares in the series, and would show the value at any time of the series to which it belonged. Columns 2. T, and 4 refjr to the pass book, and the place occu[)ied on the above book. (!olunms 5 to :;o show the monthly record of lines and (jremiums paid liy each shareholder. Column.-; 21 to 25 inclu.^i\e, i_\hii)it the standing of each shareholder as regards the charges against him fui dues and fines, and the amount paid thereon. CoUmins 26 to 21) exhibiL tliL' \;uious ammmts that are carried forward to begin the record of the next six months on. The smn of the Dues Columns for all the series of stock together, for any month, will be equal to the Dues Colunins fur that month m the ('ash Ikujk. The same is true of the I'ines Column l(ir any munili. The >iini 'f six nioiuhly colunms of dues in all series of stock taken together equ.U the amount ciedited to ' 'apital Stock .Vccount for the six moiuhs. The dues carried forward to begin next six months on, see column No. 26 in register above, for all existing series of stock when added together, should be C(p.ial to the oalance of the Capit.d Siock .\ccoimt carried Inrward in 'he Ledger, as the entire amount paid up on all existing shares carried forward in this register, and the Capital Stock Ac- count should show the same aniounl taken forward as a credit balance to it. Tiie cancelled shares are simply ruled out, and not brought forward at all for the next six months hi: ■ -258- i=?H:(3i^-rE:R F*rcrqiurqs or\ Logir|B, Series i. From May lat, to Nov. Ist, 1S'J2. Forward to Page No. of Hrouglit orwarcl May 3 June 6 July 4 .Aug. T Sep. 5 Oct. 3 li Total. I'Ualance forw.inl. Name. ! I'rcm'ni I*icni'm Cr. Dr. :l M ft ■r. J .5 8 ti < i Prem'ni Prcin'ni Prciii tn Picm 111 Piein' in : Amount Miller, Wni. 45 >2 20 II .40 ' SO 40 40 40 40 2 80 3 20' .4(1 Thompson, Jas. 80 •.i 20 ;| 00 (it) 00 00 «0 liO 3 (iO 3 00 1 Williams, Mary !)4 4 32 80 80 SO 40 SO 80 4 40 1 SO' .K) Cane, Jane 97 5 30 1 ji 1 00 1 .1 1 00 1 00 1 ou 1 (H) 1 (10 (10 001 II II 1 •40 ;, •jiS 20 U2 SO S2 HO •t-' 40 i?2 SO S2 40 1 ■Jlti 80 !?17 00 1 .SO 1 I 8 4 i « 7 8 9 10 11 13 13 11 15 Hi Register of Premiums and Interest on Loans. The foregoing Register is suitable for the plan whore the premiums on the loans arc payable in instalments at the same time as the interest. The left pa;je takes account, for si.x months, of the premiums paid on each loan, thai is, the amount paid by the borrower over and above the stipulated monthly interest ; for example : in Miller's loan the interest is 6% and amounts to $2 per month ; the premium is 40c.. which is one fifth the interest. The real rate of interest on liiis loan is 6 / + .,',^',., x 6 == 7! . The right hand page of the book shows the record (^f intc-est iiayments for the six months. The payments made to wi[)e out the princ'p.'l are rc:illy paii! 0.1 shares, and are taken charge of in the Register of Shares and l''ines. When ihe slock reaches maturity it is used to cancel or pay off the mortgage. These pages are pul opjxjsiU' ia( h other so that at one opening all the transactions on tlie mortgage f( r the ccrrtnt six months may be readily scrutinized by any person. 'I'he balance in arrcn- or paid in advance, as the case may i)e, is carried forward every six months, and prosision is made at the beginning and end of the six months on each side of the book for such carrying forward. It will be noticed that the forms on the right and left sides are alike, except that the word "Premium"' occurs on one side and "Interest" on the oilier, and our description hereafter applies to i)oth sides at once. Coi.i'MN No. I gives the name of the borrower. Column No. 2 gives the number of borrower's pass book, which is his number on the stock register. =59 CDF^ I Balance forw.ir.l. £incl Ir|tcrest oq T^oeii:^©, Skriks I. From May 1st, to Nov. 1st, 189.i. Forward to Page 1 No. of BroURht ,, forw.-»rd.' ^''^y-' JuiieCi. July 4 AllR. I. Sep. 5. Oct. 3 'I'OTAI.. Balance f(irw;iril InUr's'. Inter'st. InlcrVl. 1 Inter'st. Cr. Jlr. 1 1 .s s a. < £ '1 '~ ~ c >; Imei'sl. Intcr'sl. 1 Inters!. Inter'st Pail] in Ail\ 'niT Am'nt.. ^1ilIer, Win. 4"! 2 20 2 00 j 4 (K) jl 2 (H) 2 Of) 2 00 2 (H) 12 IM) 14 00 2 00 Tliiimp'ion, Jas. 80 3 2,-) 1 jl 3 (M) 3 00 3 (M) 3 (Ml 6 (K) f» (X) ' 24 00 18 00 (i (K) Williams Mary 1)4 4.'?2 1 4 00 4 00 4 . Scries No. -;. Name John Moffatt. Post Office Chutsa'orth. l)csciii)tioii of I'ropcrty— Lot No. ,ir,, Wv.st side of Wilnon Street, in the toini of Ch(i/,sir(>rffi, Count ij of (irey. Onturio, on irhieh in aituute ii Brick House, JO X .10 and Kitchen id x Ii. Acres J4. \'aluc of Land -S'-IO'). Value of Buildings ^^oOO. Total -S-.ISOO. Amount of Loan $1000. Rate of Lnerest 0"/. Premium 20c. p^r share inouthlij. Lisuraiicc j^lOOO. Premium $S.oO. Hate of Expiry Sept. :<>, 'i*-^. Date of Mortgage April 1, 'iU, Term 208 months. Prior incumbrance ^800. Mortgagee's Name W. P. Telford. Address Oioen Sound. Api)raisers N. P. llorton, J. W. Rcdferu. Approved by Board, 2J,lJI'J,i. I'.\RTICUL.\1:i. CR. UK. CR. I 1901. Apr. I. $io8$io8$S4o,$54o Appor tione;d pr ofit Paid on .Shares. $540 460 $1000 The Loans Record Book. The hook above exeinplified contains [)articiilars relati\c to each loan made on mortgage as to name of person, description of pro])erty, term, valuation, &c. The major part of these details should be entered up from the application of the person and the appraiser's report thereon It also contains particulars of the various payments on account of the loan at the time the advance was made. The solicitor usually pays all costs incurred and a checjue is given him to cover all fees and costs in the matter. I'Vom this a statement is rendered to the borrower showing how his loan was paid out to Llm and on his account. 263 — Under particulars of rcjinyinciil wo fiiul premium aiul interest brought from the I'remium and Inlerest Register, llv: Dr. of each showing liie amount ciiargeil, and the Cr. the amount paid, showing, in this case, all paid up. 'I'he $1000 of loan is met hy the stock wliicli iuis matured being made up by monthly payments of $1.00 on each of the five shares for 108 months (y years) $540.00, and the accumulated profits of $460.00 for the nine years, in all $1000.00, paying off the loan. Investment of Money with Loan and Savings Societies. Besides the investment of money in the terminating or withdrawable shares there are three other methods of placing money with these institutions, viz. : (i) On Savings Bank plan in which the depositor receives a |)ass book in which de- |)osits and withdran'als are entered. (2) On Deposit Receipt. In this case the society issues a receipt and a promise to pay back with interest. (3) On the society's debentures or bonds. We wish to devote a few words to each of the foregoing methods and to illustrate the form of book adapted for each, Savings Bank. It was noted above that when money is deposited on the savings bank plan that the depositor had a [)ass-l)ook to show for his deposit. The savings bank is intended for accumulations. It is expected on o[)ening an acc'ount of this kind that the anmunt will be periodically increased until suflkicnt is accumulated to make a i)ermanent investment. This ma)' be regarded as a sort of temjiorary investment. It may be withdrawn usually without notice and fur this reason most institutions limit the amount so depositt^d so that the institution could not be crippled if a "run" were made on it by depositors. The de- posit is withdrawable either eniirely or jjartially and intirest is added yearly or half-yearly according to agreement. jfVfC Inteir.sf is eoin[)uted in one of two ways usually. The one method being to allow interest on all sums for the entire time the\' are deposited and credit it up to all of the accounts at a regular stated date, either yearly or half-yearly. The second method is that followed by the Dominion (lovernment in the Post Office Savings iiank braiuh, viz., to allow interest on the lowest inontltiy I'lihinas, and credit the interest up every 30th of June, or such other time as the directors may determine. In this cast; the depositor will note that if he deposits on the first day of a month there was a time on the morning of that day when that deuosit was not there and if it was his fir--t deposit his interest would be nothing for that month, as his lowest balance was nothing. If however, the deposit had been mailc the night before, to wit, the last day of the former month, the interest would be allowed l( r the whole month, unless it were withdrawn. The interest is found by adding all the monthly balances together, dividing by 1 2 to bring to yearly balance and multiplying by the rate [)er cent, expressed decimally. The following form of Deuosit Ledger will need little or no explanation, it is sufficient to say that the balance i.s struck in the balance column every transaction that is entered. 11 "iif i! — 264 — I^ c 1 :> o H i 1 T V c cl o'o r Namk, J. W. Rcdfcrn. P. O., Owen Sound. Rate, 4%. Dr. Willulniwal. Cr. 1 )eposit. li.ll.llUO. 150.00 240.00 220.00 iNTKKI-.sr. Date. I'.XRTICL'l.AUS. Initials 1 )ays. Amount. 1892. Jan. IS May 20 June 8 Deposit, Witlulrawal, C. M. (1. M. G. M. 20.00 150.00 yo.oo The Deposit Account in tlio (icncral i,c(i:;cr will ivprcscnl ilic .sum of, ill the balances in this Ledger in amount. Sec dcscrijilion of account, paj^c 254. Deposit Receipts. When an investment is of a semi permanent cliaracUr : when a considcral)le amount has been gathered together, and it is not expected to be u^iuircd for some months, it is usually invested on Deposit Receii)t. .\s [Ik- (Uh ument carries its own terms on its lace, we cannot do better than to give an ordinary form of one ri^lil here. It is fre(iiiently called a Certificate of Deposit. FORM or DKI'OSir UKCI'.Il'l. $2C0. No. I. THK HoMKSTIAI) lini.DlNC AND SaVINOS Soi IIUV. Incorjioraleil 1SS9. .•\iitli')ri,ri.'cl Capilal Ji,oqo,c(Xj, in 5,000 Slians nl $;oo tacli. KiNc.sTiiN, Jan. 15, I Si) I. Rkcicivkd from W. J. Ikidd, Ivscj., the sum of Two Hundred Dollars. h l-H W U W Pi . . i",;^ Dollars, which sum will be accounted for by the Society to the said W 1^ J. Budd or his order, after fifteen days notice, upon the surrender of this ! Q Certificate only, and will lie.ir interest from the 15th day of J. in., iSyi, until within &- fifteen days of time of withdrawal, at the rate of five jier ceiU. per annum. No in- terest will be paid on this deposit unless it remains three months. CiKokiiK .\1kik, Mgr. Homestead lUiilding and Savings Society. If any part of this money is wanted, say $40, the Deposit Receii)t would be i-urren- dered and a new one issued for the balance. It is customary to pay these Deposit Receipts - 2^5 - witliout notice, simply di'diicting fiftoi'ii days from tlic limf ii) i.oinputiii},' tlie iiU(.ri">t. i'lie society reserves tiie rij^lit of lit'teeii day-.' notice so as to have time to |ir(i\ide Cwnds in case of a "run" on tiie institution. 'I'iie following is a form ol' i\t.i;i-.ler k( pi of the I )e- )iosit Receipts, The iiendiiif-s give sufticient explanation, li gives a record not t niy of the issue of the Receipt, but of its redemption as well. I'he account kepi with tiuse documents in tlie general Ledger woulil show liy its lialance the amount ol Rc.cei|ils out standing. It is e(|uivalent to a liill Payable account. (See page .'54). Register of Deposit Receipts. • )'::i D.ite. i8y2 1.111. 1 5 " 20 ^fo Name. I Occupa- I tion. Post ( )irice. 1 W.J. Uudd, Chemist, !|Iepw'rth 2jno. Krost, |l5arrister, O.Sound, I I I 21 3S. J. Lane, iCo. Judge Kilsyth, i : J. C. Ryan, .Merchant l.eith. Kate of Int. I ! I jAmti Tctal , ,/ Amt. 1 Mgr's i Dateof 'Days of .\mt. ^ii. Initials Payment, int. Int. I'ai.l. g .04 200 (i. M. .\ug2r()2 2HJ4..S0 204.80 .05 3000 (;. M. I .05I 1500 |(;. M. .04 150 (1. M. t' ! y'/'A Bonds and Debentures. When it is desirable to invest mnnc)' for a term of years and )ct have llie docnmi.iiis held as secun-ity in such a form that they may readily be coinerted into ca^h, il rcipiired, and especially when it is desirable to have a regular yearly or half yearly income |)ayable on a specified rate, and without delay or trouble of collection, an investment is made in bonds or debentures. A bond is a written promise to i)ay a certain sum of nionc} at ihc expiration of a certain term of years with the interest thereon, generall\- payable halt-yearly. These bonds are of two kimls. Coupon lionds. Usually pxyable to be.arer, and to which are attached several promises to p.iy yearly or half yearly interest. If the debenture ran for ten years with interest payable half-yearly, then there would be twenty coupons attached. Regi.sti'i'ed litnds are generally payable to some s])e(ined [)erson or his oriler_ There are no coujjons attached. The owners' name is n\:;is/creii in the Onnpany's ( )l'ti(e, he goes personally and collects his interest. The following is a form suitable for record- ing this class of bills payable. '{^ M jr. ;>; —266 — Register of Bonds or Debentures. ]>ateoi Nn I'AVKIO. Turni. Intkuk.st Cm I'ONS, MATI KITV. . .. n'Kf luue. Kuti'. Wlioii (luu Whuri) I'ay. Month Vuur '^"' ',Ini.il i8y2. 1 Jan. 20 1 \V. IJrown 1 years 5 7. I>alf- June 30 Molsons li'k J'ne 30 iy02 $600 J..M. yearly Dec. 31 M 24 2 J. \Vrit;lU 5 years 5 "', half- June 30 II J 'no 30 1897 200 J.M. yearly Dec. 31 PI 27 3 uearcr S years 5 7„ I'alf- June 30 II J'ne 30 1897 1000 J.M. yearly Dec. 31 Financial Statements. A consideration of b()()k-keei)ing as a|)[)lie(l to the l)usiness of IJuilding and Savinj^s Societies would be inconii)lete wiiliout a reference to the fniancial statements. Such statements are issued annually if only one scries of shares is issued jier year and semi annually if two series are issued. The folluwing are the statements of the Owen Sound Building an'l Savings Society. 'J'hree of them will he reatlily understood, viz. those of ReceijJts and Payments, I'rofils and Losses, and kcMunces and Liabilities. The fourth one, the Share Statement is iieculiar to building societies issuing terminating shares in series. It gives a summary of the affairs ol' each seiies of sl(jck from the begiiming. The addition of profits for the last six months and the present value of the shares in each series. Although this statement requires considerable labor in its [preparation, it will readily be understood by 'he reader. Receipts and Payments. KECKIPT.S. 1 )iies on .Shares .... .... ....S.kS.'iU :t7 Subscription Fees on .Shares M >")(• 'J'laiiHfer Fees .... .... . . . 1 ."ill Interest on Loans and Fines 1 ITS (id I'reininnis on Loans . . .... . . . . (I»4 :(,-. Interest on Hills Keceivalile (Stock Loans) Ki ((•_' Bills Receivable .... .... , ... 42(1(1(1 Deposits . .... .... •JTd.-. (10 Loans Kepaid .... .... . . . !>:: •_'(» Valuation Fees ... .... .... • >o (H) Advances from Bank of Haniilt on . ... SST.-J :il S'2()848 «5 I'AVMKNTS. Hiiiik of Hamilton .May 1st 8744l> (i4 .\i1muk'c(1 on First Mortj,'aj;e8 HL'J'.t ill Loans on Stock ( Hills Keceivu.ble) .... l"),).s (H) Deposits Withdrawn 22(m ixi Dues cm .Shares Withdrawn ... .... 81S (i.'i Liteiesl on Diie.^ withdrawn .... '2S 77 Interest on Deposits withdrawn .... "iS 27 Litercst on advanced Loans .... HS 7(' .\uditors 10 0(1 Iiilcrest Hank of ILiniilton .... 2li7 82 I'rinting, .Stationery, and ]iooks 04 (10 Valuators 22 OU $20848 85 .,i afi; — Assets and Liabilities. '^"' ' Init. I $f)Ooj.M. 200 J.M. looo'j.M. AM.SKTM. l.oailM nil .Miill>,'il>ih>ii . . »'4(i;i.'.(t (Ml .... •-'li:i "i> 7'i IM» •.tl (lit [nil 1 1'Hl iicri Mill nil 1, Nilix . :.»•.':. I'reniitiiiiH iioii iiimI on I,iiiiii8 llltoi'UHt HUOliiiil on I'.iili l!eo. ;w .V. 1 !.I.\|;1I.IT1KS. hue on In>M>ni|il('t)' l.diinM. . |)r|)(lsitllll< InleiTNt ai'i'l'lli'il 1 11 |lr|iii!iit Itlli'N in uilMillie , llitiieHl iieerni'il on I>ii>'m in luh .iiieu. Siii'|iln«i lit eii'ilil lit I'lnlil ami Liihh liiti'ieHl I 'mill nil! 1 n liilNUie Iiiti'i'i'nt in iiilviinee nil liniiii!i ... . I'leniiiiiiiH ill iiiK'iiiici' nil I.iiiuih I'i'dliN ii|i|i irtlniieil nn |)ili'H Mlli'M nil Shill'CS K\|iniMe luiniiiil iiiink of Ifaiiiiltnii I'm iiiIviineeN l-.'tllS ().-) .•*•.'.•;:. s,-. 7IINI ('II •.".".1 Ill ;u!io II Ml 7'"" I'.'lli (III ."l .V> 411 (Nl •_•! .111 I7lill nil P.I.'ilO 1.-. •-'7o nil .sH7;t ;ii f.'iits '.i.'i Profit and Loss Account. id Savings Its. Such • mid semi von Sound t. those of The fourth shares in iniy. 'rhc :s in each Ion, it will §20848 85 LOS.SKS. To .Xilditors II Intere-t paid Hank of llaniiltrn for :idvances II Wilhdrart iiiL,' I'lnlils nn Shares II Jllteresl and l)',;po>its repaid and ar- I'liicd M Inierest on :id\anoeil lines ■1 I'roliis apportioned on .Shares ihi- o months .1 I'spense aci'i., |irinlint;, stationery, adverlisiiif^ and hooks II llalanee forward (surplus profits not divided) !))I0 DO 2(17 2S Si 77 lOo 77 75 .i.S^ 20 .>4" 0(1 1210 00 2694 91 puiiiirs. Hy I!ilnni-e of I'rohls list ,',aleiiienl $5S2 53 ■ 1 I'roliis on Shares withdrawn 5' I- 11 liileresi on Loans and Kines 1241 So M I'reniinins on Loans 073 30 Inierest i.n Hills l!ec Tr.nisfer I ees Siilisirinlioii Lees. 73 i*^'" 7 50 (;4 50 2694 91 FiHh Semi-Annual Statement of the Standing of the Terminating Stock in the Owen Sound Building and Savings Society, at Nov. 1, 1891. 1 .H I. c y. 1 .1 4 5 W '5 I Mnv, "Si Nov. 'Si May, "i), Nov. \y .May, 91 1 1^=^! = . - • 5 •? S g i _« -r r. t: s 2 <3 a li . 5 1* J2 ■^ - " r; i u r. ? I, CQ !>'. 2 7300 00 '36', 59000c 29 '2 12750 00 63'.,. Sooo 00 40 6400 00 32 40350 CO 20 rf - ^ s ,• = c 5 .s 29S.', lyi. 96.', 126 121.': ism 16S 20S 89 121 773i 9751 1 Total Tolal Am lUiit Amount of Dues in of Uue.s. advance. 11073 4S 1943 43 3;.S9 4" 799 4"' 35S3 So 404 05 2067 76 24S 50 7S6 15 35 00 22800 59 3490 44 1 1 ■0 < 1175 10 271 50 ZK-,^^ Sj ()o 72 12 71; 1760 00 j 1 Value of Liflh Shnn's liain'rs' Willi .\pi.)or- Appiir- lioned limieii I'rotits. ; Profits, 3"2 5 1 '33 SoS S6 Si JO 15525 89 S5 19. 14375 «o 32 12.4O5 12 71 0,105 552 20 • • . • I'rolits ...-".l 411 ■ ... looS 'III H ... HIS I'm ■ ■ SS ill ■ f 400 -""'91 213 124 "15I ~ ^' B. £.'7. y> '^ = 75 1683 00 34 36.S00 24 53365 5 5500 3: 300 140 2642 65 \ \ last () Months. 9-'3 .0S9 4.^5 .29 '05 1(1 (III ■ 2117 S-J ■ ... t>4 (ill ■ 22 on ■ Totah Numher of Loans in force on First Mortgages with insurances, 66 ; Iligliest aiiuunl of single loan, .$2,000 ; Lowest amount of single loan, $150 ; .Vvurage amount of loans, $611.37. — 268 % ii;r I,; ll Division or Apportionment of Profits. The SI arc Statement gives tlie standing of the siiares in eacii series every half year. It will he proper to explain the method of a[)porti()ning the [)rofils to the shares. Ac the end of the [)revious half year there were four series of stock iiaving a share value as fol- lows : ist series, .$26,605 : 2nd s-cries. .$19.46025 ; 3rd series, .$12.65X75 4th series, $6,175. 'i '1^' fi*^''! series has since heen iisued and $1 per niunlh paid in on each siiare in each series. 'There is invested for each share ; isl, tiie amount of its value brought down from last statement for six imn.iths : 2nd, $1 lor six uiontlis, $1 for fi\e months, $1 for four months, $ I for three months, $1 for two months, and $1 for one month. It is proposed to ajijjortion 6 i)er cent, profits per aiinur.i to the shares. The following is the method of finding the average investment for a share in each series : 1st iSerie .s Value to begin 6 months 26.6 35x6=- I 5')- 630 u).4 ist months dues i.x6 = 6.000 2nd ti 1x5- 5.000 3rcl 1 1 1x4 = 4.000 4th II 1x3 = 3.000 5tK II 1x2 = 2.000 oth M IX I = 1. 000 '2i\d Series. jrils'rV 4lhs-r's •"•til' .Scries. jy^C'SvS^^' '^ ' '^'•7975«: I x6 : 1x4 = 1x3 = 1x2 = ixi = 6.000 5.000 4.000 3.000 2.000 1 .coo 0x6 = o. i.x6 = 6. 1X5-6. 1x4 = 4. 1X2 — 2. :xi = 1. I )ollars for i month 180.630 •yo3 I'rofits apport'n'd at 6% per annum 1st series 335 shares T'/ .1)03= 302.51 2nd M 126 sJiares ('' .(i,Si)._: 86.81 3rd " 185 '4 shares (" .485^ 89.85 4th M 208 shares f" •-')-= 60.32 5th H 121 shares (" .105^ 12.71 Total profits a[)poriioned ('' Xov. 1S91 552.20 J_37'.79_75o_ .6S9 21. .105 (The figures of series 3 nad 4 are left out. Those given are sufficient for il hist rat ion). Co-operative Associations. These .Vssociations have become \ery [)opular in (heal ihitain of late years, especially in manufacturing centres. Tiiey are usually I'ormcd among workmen for the |)iirpose of iirocuring goods at or near cost. We have l)ecn iihistrating i !o ()pei;ui\e Loaning, Sav- ing and Banking in the lUiikling Sotock being paid up in monthly calls as in the case (■!' the building societ), or in calls of not more than twenty per cent, at one time. I)icor])Oi'(itioii. In Ontario, Co-Operative Societies arc incorporated under Chap. Xo. 166 Revised Statutes. Tlic\' ma\' engage in any business or trade except the work- ing of mines and quarries and the i>usiness of banking and insurance. Seven or more persons sign a (X'rtilicate. in duiilicate. and acknowledge it l.efore a Notary i'ulilic or Justice of the Peace, and ha\e it certified to ny the Notary or Justice. These and the by-laws or rules of government, also in diii)licate, must be recorded in the Registry Otifice lor the < ounly where the head ol'tice is situated. The Registrar will certify to the dup'ii "tc ; opy and return it to the corporators. \\'hcn the certificate is fyled the Society is incorporate'd. It has perpetual succe.s ion and limited liability as two promi- nent featuies. The word "limited" must be made a part of the name. A sign must be put up at the head office, and should the society desire to extend business into another county a copy of the certificate ;r incorporation, and the rules, must be registered in every county Registry (Office where an office is to be ojiened. The AfaiKif/iHtotf The bu.siness is managed by Directors or I'rustees who are elected annually by ballot, according to the rules. Unlike Joint .Stock Companies each member has f)nly one vote no mat*'-'- hov many shares he may have. No shareholders are allowed to ha\e more than .f 1.^00 s irk. Officers entrusted with funds or valuables are required to give bonds ibr the saf keeping and proper delivery of whatever is entrust- ed to them. Bjf-Ldir.s (tnd It'idis governing the society, must be made at a meeting called for that purpose. A eopy musi. he registered, 'i'hese rules will ]>rescribe : (i) Mode of convening general and s|>ecial meetings of shareholders ; (2) Provisions for an audit of accounts ; (3) Mode of withdrawal from the society : (4) The mode of ai>])lication of |irolits : (5) .\[)pointment of otticers and m.magers. The rules may be ihanged at any general meeting of shareholders called for that purpose, but changes will not be eflectivc until a copy is recorded in the Registry Office tluly attested to by the affidavit of either the President or one of the chief officers WilJxlrtnniJ i)j (\i jtiliil It is ([uiie common for these co-operative societies to have their cajiita! paid up in regular mstalmei.ts and withdrawable almost at the call of the shareholder, sdnietinies accumulating, terminating stock is issued similar to the build- ing society, making it a sort of savings bank as well as a co-operative store. In the majority'of cases however the capital is like the Joint Stock Company not withdrawable but simply transferable. (jtovvmmcnl Ihjx'if. — The n.anngcrs, directors or trustees shall send to the Pro- vincial Secretary a riiiaiicial statement showing the condition of the affairs of the company on re a year. The liooly'n, illustrated in coniKclion with Jdint Stock Com])an)"s work will suit fn the C'o-()]erative Sociclies. It is therefore needless to repeat them her;. Books Suitable for Manufacturing and Jobbing Work. h i> onl\' iiccessarx to examine tenders fjr work of various k'lids building, jiaiiU ing, carpenter work, steam fiilinL;. repairing lirok en articles or n\icliinerv, job ])i'nting, kVc to enable an\' onlinaiv mind to come Id the conclusion tliat three-(piarters of tlio.'-L' wlio prepare estimates and submit tciidi.r>, leally luive no intelligent knowledge of the cost of the work in their own trade or Inisin I of labor and material ess, and this is due to a gener. scepmir a recort d in rticul; Lu:k of us/tM cf ir work, and of contingercic thai cri [> up in such work in fict there is a general absence of nr/in/, sa}' nothing df SVSli'lJI. It is ol considerable importance to a grc^at many manufactiirii;g concerns, both large »nd small, and to the large class of shops, ol'fices and businesses that do both new work anil ri.'i),iirs to order, to keep track of ti me, m ittrial, etc., consumed on each small job or contract, and be a!)!e to figure i.ut the ccjst of ^uch work accuratelv. It is lVe(picntl\ useful to be able to refer to the name of the employi'c whci did snme part of the job. ither 1) )ecause U was well done, or because it p.a> been t-areiessl\' or imiiro])er rly d one Among busine-scs thai reipiire such re'coiil> we might mention waggon and carriage sho;)s, furniture f.ieiories. i)l,icksmith shops, ma^iiine shops, piinting offices, iVc. We will take a printing eilhce as our illustration. 'I'lu' fcnnisMsed can be adapted to any job- bing busine-is \er\' easil)'. We i_lo not deem it neeessar}' to gi\'e a full list of traiisactioiiN foi' a injiilh or _\e.ir's business. It is no (lart of the aiith')r"s desire to iliusLrate the closing of books, the di\i-.ion of ])rofits, or the organization of the busines-^, but simply to suggest eonveniencies for use in the business, be it Single Proprietorship, l'artnershi|), or Incor- p ir.Uei under 1 Coi ^tood. ipa;-,y. I alho the us le ordin,ir\' b->nrn:il, I.edge'r, P.ill 1! are su|)[)osed to be )f the '1 lUK- li.poks. '.IV She ,'1, etc., that are used where men are emploved. for explanation of the Time Hcjok ,inil Pay Sheet see [)ages 130-3. The se w aaiii ii.' u • la Va.; |).i\in, d left )f ih irkmen if the business were larsje enomrh to neee^siiate them, .md leli ou! il [\w mim!)er ol employees were not large enougli to re(|uire t'lie introduction of such ciinveniencis. In ll le [iiinling oMice business a biurn.d wouUl be kept in which to enter all luir- ch ises V) of notes, f sioi'k fo'- iHj in til.' ol"fi.-c, m lehiiierw t lols. tvjie for use in the office, the givim. \-,c ..■tilements b\- contra .iccouni, and ,ill otiier business that would not belor to the '' Work Register " or ( 'a^h book. r the (• ish liook wo ulcl keiil ■i|)ls and payments of cash alwash u^e il as a p iP book. post directly from il to the Ledger there is no necessit) for iiu'ting nn entry in the Cash book, ami JouriKil as well. There is less flanger of mist. ikes if [losting i.-, dione directly from the book ol or iuinal eiitr Ihc ^r^^ onipany 1 suit fi) )rk. ig, iKiun- ling, v^e., hose who le cost III lini^orcii-'s lollii'i;;' I'f liolh lavLjc luvv work iiall jol) or frciiufiitly of the joli. edy done (1 cairini.re .\:<-.. W ^' c) any job .insa he elosini^ to suuL^est or Ini'or- ised lo lie e men are ^. These I'liough to to re(iuive icr all pur- llhe i;ivinL; luit lieloii.U tcpt for all tectly from 11(1 Journal lie book ol — 27T — The Docket. When n contract is taken, enter at once in the Work Register details as far as possihle. These details are filled out on the Docket form as far as possii)le. It is attached to the "copy," and in this way follows the job from the beginning until it is finished, when it comes to the office bearing particulars of the work done liy the different persons, and the time consumed by each, the stock used, iVc., and the date of completion, so that all details are gathered readily for entry in coiinection with the work in the \\'ork Register, 'J"he entries are generally made by the workmen themst'lves at the time it is done, 'i)Ut may be made in the ofi'ici.: from die workmen's Time Sheet illustrated in this connec- tion on j>age :'74 It will be noliced that e\iry sejurate kind of work has a place in the form, and every person can enter opposite his name or number just the c':: ;s of work he does, whether type setting, or folding, or press work. This Docket can be ap|ilied to any other kind of business or trade by simply chnivjing the headings of the columns to suit the kinds ol work done in tin.' business. Form of Printing Office Docket. December 1, i8g 1. No. 1 2000 Rules and Regulations Size^^.c'T^ 8vo. Particiilars Mechanics Building- and Savings Society's Annual Report, 24pp, with cover. Date rcijiiircd December 7 Stock Toned D.D., 401b. Name and Address A. C. Bailey, See. Proof' Yes" ''No Ink Blue. Black, ffurk- nion Com p. Cor. Mk«,nly. 1 ■; r. \vk. Slitullill^ • 3'-- I'atUiin^. ('■uuuiiiK. ■riiiiiriiiiiK KuIdiiiK. Sir ning. llituling. Stereo, a 8'^ 1/, ^V^ )i h 6 a c ^3H ;'-4 ,1 ?i 10 (' 5 1 ,/■ •3 I U W m — 272 i^- Work Register of the Northern BusinessB Coll Whrn fol) L. II I Kec. .\u. Julio Name. j AunuKss. \ Xo. . Size. I PArrR. I Price, : I I 15ei:. i, nl I 36 Mecli.inics' liiiiKll ' 2000 f. cap. Soo. Toned IJ I), iS 00 j I iii,i,'i.V Saving.s Sue. Owen "^oiind,! [ 24pp. I 40 with cover,! When j Prime delivered -east Dec. 6 cli •■ 3 2 9^ W. Kisl.y \ Sun^., Dry (i(>uds, .\lknfnrd, 1 000 iTjllis, NO. 3 prim 2 CO Dec. J cue " 3 3 -t7 liailcy Bros., Millers, I!.\iley l-alls, 500 lOsgoudc Linen, ^ 25 Dec. 4 c.ed " 3 4 47 1 " (1 500 Xarrow }4 sheet, 2 00 c.nul " 3 5 4/ M II " 250 3x4 -4: Isristolsp. » 5° c.iUl .1 4 6 68 Will. Berwick, Auctiuncer, Tara, 75 J2 sheet, No. 3 D D 2 00 Dec. 5 c.cd The Work Register. This liook i> sd simple that tlie lK)ok-kec'[)cr will readily see its usefulness. It is .1 .Sales-liiiok for lliis business. It is to he used to |)osi from just as a Sales hciok is. It _i,M\cs such iLill parlirulars that the cost can he readily rii;ured. If any mistake lias been made or work poorly (.lone, the person respousihie for such error or carelessness can he locateil at once', if it were a month or a year ai^o. It would he very little trouble tt) a(la[)t this sl\K- of Rei^ister to ,in\- business where work is being done for the public generally, and especially such work as that done in waggon shops, blacksmith slu^p.s, foundries, re- pair shops, etc. It can be used n'ith advantage even in manufacttu-ing generally. We do not consider it nccessar^■ to present a fidl set of transactions with these siiiipie vet useful hooks ainl papers. We simply suggest that each piece of work be posted directly to Dr. side of die customer's ac( ouiU in the Ledger and the sum of every juige or week ur month polled to .Meri handisc A c. or whatever accoinit \ou keeji in its place, thus tlie double enti') will he complete, ('ash Rc'Lipls and I'-iyments would be treated in the ( '.ish li ^"'u and all (jther transactions put in the journal and posted in the usual way. In ordering the ruling of a hook of this kind, let ihe jobs be separated by distinct r^l lines about ■' } to -\| of an inch ajiart and between the red lines two or three light biu'-' luKS for writing particulars on. These cannot he very well illustrated in the jjrinting. .\ -.- 273 n BusinessB College Steam Printing Office. When I'rimc delivere'.! -eesl Dec. 6 ',cl).ilil i I Dec. 5 cue 1 I ; Dec. 4 c.cd I I J n 'c. 111(1 )0 Dec. 5 c.iW c.cd Particulars. Rules and Regiilalions Conip S'/ a 1) 1.^!:: C Uinlgers advertising ! a,'/ a winter .sale, Letter Heads in pads, Bill Heads in pads, iV a Cor. 'X \. liijiness Card.s, I,". a Posters advertising sale S b iif Furniture at Wi;;- 1 ! a i;m.s-. ,.,,.-. I M ak riudy '.i h ^i .1 yi c S;i>. \Vk TIME. Stitch ICount ing. ing. H b / I >i c % bl ^i c to d 5 <■' ;^ 2 <1 .■4 d I h I c Trim- ming. 3>< fi li d 2V ^ lij or,,. ,. Costol; Kf.mauks, Sinn g 1.3 f Time. '4' a' II 60; 1 f 60 Sent by .■^tage. I ! 75'Sent 3 jobs by Doni. Kx|iress. '>! 1 I 67 So' Mailed. space sliould he ke'])t at the loot for addition. In planiiiii;; siicli a hook as this ^ot first- cliLSS paper, as it will last a loni; time. It is well to [iiit an evun or convenient niiniher of j()l)s to the page, say t\veiit\', it is ti>efiil in in, iking ''ounl of hllsine>^. In layiiii^ out a liook of this kind lari^e post p:i[ier is a very suitahlo size, tliat is 17 X 22 inclies, giving a jxtge i i x i? inches. If 20 johs are on two pages (an opening of the hook) a hook of 500 lea\'es would hold 10,000 johs, and this we stiggcst would last most offices a considerahle time. Under the general heading, "'I'imo" are ten stih-divisions for the various kind of work usually done johs, one lieing for ccist of time. In these column--; the nuv.-.heis are for the time, in hours, consumed on the joh. The letter attaclied to e;u h denotes the person who tlid the work, so ih.it the cost of the time \v.a\ he accurately llgured up when a joh is finished. l''or exam[ile : the time of the foreman "a" is much more valtiahle than that of apprentice "n." It will he noted that there are two ( olumns gi>'ing price, one the oiling or contract price the other the prime cost, which iiu lu(ks liie time, paper, ink, and 10 .idded for general supervision and fuel. 'I'he prime cost is ke[)t is kept in cvjiher 'Kised on the word ''Cumherlar.d" in tlii^ case. It might he as well m k(.e|i the cost of iiue in cypher as well. m: I — 274 — NORTHERN BUSINESS COLLEGE STEAM PRINTING OFFICE. riiiic^ ^l^cot. •or fll (■ irc< '/•• t'udliKj Drcniilwr /'K l^'>t. S^ 'I'hc person iisini; tliis Tiino Sht-ct will please make a iiotL' in iliu rcrnaiks ilninn when wnrk is c jinplcteii. If any wiirk i^ not coMiiilctcd (in Satur- day iiiK-'l* pli'asc make a nde (.J ilic sra^ vaiicenient op,) )site ii in the icrnarK^ ci.lnnin. L.ra.1- J\'ii///c .1. S mi til. A//i/i/>ir Xiiiiilicr of lol). I)t'.si,'i'iiiliiU M"ii. I'lH's. \\vi\. rinif. 17 26 I iWcstt I'.ill IK KllVi.'Idpc;- i ^i Wcst'niCloll ;. Marl, Dodger' 11 Window ("ardsj 'r'mi)l'rs'(!oiii"rt I'o.sl'rs d^oya! Acton's Sale ('atali.■> I Sat. Tdtnl 10 i]i]eted Ready for Press Completed. The Time Sheet. This is a daily record of the work tlone hy each workman, and kejU h\' himself. .\ pad of them is fastened to a small hoard and ke|)i li\- him at his "case," or at his bench, or wherever he works. When he i[uits one joh and begins another, he simi)ly puts down the time consunietl that da\- on that s[)ecial woik. 'I Ii ■ \:iiiic of ■-;;■. !i a P.'cord as this is ()b\iou~.. It is the (laiK- record of one man's time 'I'lii' D )cki.i is tl;e "Time 'i'ieket" of a particular job or portion t>f woik. .\ \vorkm,i:i n .■> is his d.iii\' iccoid oi time on the Time Sheet to enable him to enter up the total time 1 onsuiiicd on eeeiy : cparate [)iece of work. He ninv be a week on the same work, or h ' ma\ be a week 1- ss in'ierruptioiv-. The Weekly Time Sheet- nia\- be hand,ed into the oi'liee every Sa'.m-d.iv iiii;hb iH'il l'^'-' book-kt'eiier will go o\er them ami charge all "time work" to the j^'rst^'n for whom it is done. 'J'hesc 'I'inii.' Slie';ts, or s(.imelhing ei jinwilent, --hould be used in e\ery business where men are em|ilo\ed on various jol)s or pieces of wd k, and the-re will not be an\- trouble to adapt it lo any busines-;. such as l''oiintlry Work, Steam Fitting, I'lumbing, (las Fitting, I'laning l''ai tories, ivic, where men are sent out, and in all factories where it is an object to know the time consumed on the articles being made, so as to be able to com- pute the cost readiK. - =75 — i/'ir iUirks iplclcd. y for Press iiipletcd. in> self. A bench, Ills down as this is c'l'lckd" nc on the n-ale piece .iruiition'-. U, and die whom il i"^ V hiisiness aot lie any ihing, (<;^^ re it is '^'■' i)ic 10 corn- Sundry Points Relative to Manufacturing Books. In all large iiianufacturing concerns it is found neci'ssary to nuikc line (h'\isi( ns of labor in order to [)rodiicc the iiiaxnnuin aniomU of liie nKUUifactiiri.(l aitii li' fioni the ex- penditure of a mininiiini amount ol moncv for \va;4cs to sell for a' L;i\cn nnunuit of money. It is necess.iry ii: (jrdi'r to find out exactly the cost of nianufac Hired articles to keep exact accounts with art'cles being manufactured. In laige estalilislnnents the sim]ile forms of books .\n^\ papers arc scarci'ly sufficient to iin.'el the teiiuinnients. It is necessary to husband the raw lualLrial that is used in manufacture, and for sut h it is necessary in extensive shops to ado])! what might be calicd a I'liuc/u'r syslcin in the (4"lice and work.s, that is, a printed form to fill up for escry [uriiile of r:i\v niatciial used in such manufacture, and for the time, et.-., consumed on the wo'k. Such \ouchers are returned to the office and entries are made from them. \\'e might defuie ^ome terms i oinmonly used in connection with manufacturing : Stores is a title given for all material kipt in >tnck to be used in the manufacture of articles i)eing made. Such material is usually in charge of one person. The Stiires Ac- count is ilebited for the cost of such material and credited ■vhen such is given out to the employees for use. If accounts are always kept on the l.a^is of cosi the differiiice in the sides of the account will be the balaiu'c on hand. .\n account should also he ke|U in tons or pounds so tliat the (|uantity in stock would be known as well a-, the i^rice. The person in charge of the stores slunild issue a voucher to the book-kec|.er, whereupon lie wctild charge the article being made aiul credit Stores Account. If any material is returned to stores because it was not used, anotlicr voui lur would he sent to the ot'tlce, on receipt of which an entry would be made debiting Stuies .\(((uint and crediting the manufactured article. The stores keeper keeps a record ol the r.iw material, etc., uiuler his coiilrc'I in a stores book, Ijoth as to number or cjuantii\- and lo wA. Stock ylccoinil. 'I'his is an account kept with m.inufactured goods. It corre- sponds with the ordinary .Merchandise Account. \\ hen an\' article or lot of articles are completed they are sent into the stock room and are charged up in the stock book in two ways; ( i) by number or weight, and (j ) the price at co-t. 'Ibis stock book is entered u|) by the stock keejier. who issue's a \or.i her to the book keepi-r on receip.t of w hii h he charges it to Stock .\ccount in the Ledger. When gooils are sold tln.y are lo be taken from Stock .\ccount. .\ voucher or order would be issued by die head of the firm or book ke>.'per. on le eipt of which the slock keeper woultl deliver the gOv)ds to ihc packers and shipjier^ and •■nter up both the number or quantity and \'alue to the credit of his Sto( k book. The book keeper h.is the goods invoiced and entered up to the credit of the Slock Aeeounl. Stores (Dk} S/ocIc KfCfifrs /'cnjiinsililc. \\v juopo'-e to show how die keepers of stores and stock can be held responsibU- for thf* stock delixcied to them just as a cashier is held rcs[M)nsil)Ie for the cash delivered to him. In order to do lliis ih.e ::omniodities must be received by these ofticers and gi'.eii out at tlu' same value. Then.' is [iractically no trouble about the weights and there is ver\- little trouble about thi.' Stores .\ccount. as the articles in the hands of the keei^'r of stores are not supposed to im-rease in value. The Ledger account for stores should always sliow the \alue of the stores on hand and the Stores book would nei'essarily correspond with il in b, dance. V':Rh — 276 The stock of manufactured articles are represented by Stock Account or Merchandise Account,and should lie sold for more tlinn nctiinl cost. They will be invoiced to the pur- chaser at a profit. The keeper of stores on his ortler sheet should enter the goods up a. cost as well as at invoice price, and enter the cost [irice only to the credit side of his Stock liook. When this is returned to the book-keeper he enters u[) th<; goods in his sale book at the two prices. The customers are charged from the sales bo(jk at invoice price, post- in;,' as usual. The two [)rice columns are added up and the difference between the totals woukl be credited to Stock Account, and the difference or profit would be credited to some account kept (or that purpose, it might be called 'Trofit Ac- comit" or "Sock Profit Accoinit.'' The balance of the Stock Account would show exactly the ni^xnufactured goods in stock, at any time during the year it should agree with the stock-keeper's book. All goods, whether manufactured to order for a particular person or made to sui)ply an e.\[)ccted demand, shoukl be put through the Stock ]!ooks and Stock Account. Stoclc-tdhiiKj, — ^\'hile the plan just outlined will give the cjuantity and value of the goods in stock and the goods in store, yet this does not do away with the real value of an animal stock-taking, which is really an annual sur\ey of the stock not only as to its value but also as to its condition. Any old or out-of date stock woukl be thrown out and either sold at a reduction, turned into stores and improved, or re-modelled, or the material used over again. Sup[iose a machine weie in stock that had become utterly out of date, and was to be turned into stores as okl metal to l)e melted over again. The stores keeper would issue a voucher for it at cost and at stores or old metal prices, 'i'he stores keeper would enter it up at his okl metal i)rice, and the book-keeper enters it up: "J'rofit and Loss and Stores Acccjiuits Dr. to Stock .Vccoinit." If on going over the Stock Book any goods are found at too high a price a voucher could be issued by the stores keeper to the book-keeper reducing the price of certain articles. This reduction would be credited in the Stock book and journalized, "Loss and (iain Dr. to Stock Account" for the Ledger. If a manufacturing concern wishes to be really careful with their property they will take slock at regular intervals. There is as nuich need to check the valuable goods as the cash in the hands of the c- shier, and no nmi would neglect to ask their cashier to show ih.it he had the amount of cash on hand that the books called for. 2Vte Kleniinitu of Co.tf. In any manufactiuini; business it iN necessary to take various elements of cost into accoinit before a proper estimate cf the actual tost of man- ufactured articles can be arrived at. The following are elements : — (i) ("ash ])aid out for wages to mechanics, laborers, ivc., who actually work in producing the article. This comes through the time-sheets and pay wheels. (2) All the material used in the construction of the articles. This would be taken from stores, and would reach the books through the store-keeper's vouchers. (3) The cost of general supervision. This woukl be allocated as a percentage cither on the basis of the time spent on work, or on the value of time and materials, or by special report of the foreman. This item is to co\er the cost of wages of foremen, overseers, ins[)ectors, keepers of stores, i\:c., whose indi\ idual ser\'ices are non-producing by actual labor. (4) I'^stablishment charges to provide kir the fuel, oil, &c., engineer and firemen's wages, ivc, repairs to and maintenance of machinery, &c. 277 — the in the ■,how take niaii- rk in taken nlage Is, or [■men, lucing (5) Plant dci)rcciati()n. 'I'liis is to mctl writing off a percentage from tlie value of plant aceording to tlie lime it will last, or providt lor the inscsling of a Sinking I'und that will replace the i)lant wiien worn out. (6) Oftice e\[)en.se.s. To this class i)(.long salarie.i lor managers, hook-keepers, and incidental and g;eneral expenses incurred ahoul the ollii e. If we are looking for the prime ox mt cost of the g'r (leneral of $250000 in cash, which must he within one \'ear of the date of incorporation. There nuist also he a payment of $5000, as a fust contrihutiun to the Hank circulation rcdeinption fund. The capital of the Hank must not he le.^s than .$500000. and tile shari'S $100 each. 1 he ca.^h de|)osit (jf $250000 is returned to the Huik with the certificate that ;^ives authority to hegiii Inisme.ss regularly- 'J^fic Xdi/ic N'o person, [icrsoiis, ('onipaii)' oi' .\ssociation, may take any sticli title as '• l*..\nk." " IJuikin^ ( 'omiiiny," " Manking House,"' " liankiiv^ .Vssociation," or " l!ank- ing Institution," without ohtaininn a certificate from the Treasury I'oard. .\ny private l)artnerships or concerns, though they ilo a li.inkin.,' hu.^iness, are nut allcjwjil to as-unie a name like any jf the foref;t)in^, desciiptive of their liusiness as a hanker, under peiialt)' of .$1000 Ihie, or imprisonin.jiii not exceediiiii fi\e ye.irs, or hoth. 7'/(c Of/inr. T! e officers o f a 1 >ank are c.illec 1 )ireclor> 'I'he Directors elect auKJiiL; them- l\es a resK lent, \'ict'd'resideiu, Secret. u\, (leiieral .Nhxnauer, etc 'I'he manageiiic;,t of the D.iiik gener.illy is lelt with iliein. A majority of the l)iieitors of e\er\' Hank must he Ihatish suhjects hy hirth or naturaii/.ition. No person is el interest in tlu; H.mk for a I )irector ot .1 oank unlc' he has consideraljle financial Tl le pro['erty ([ualilic.ition riMpiiied hy the Statute is $,?ooo of paid u [) capital, if the H.mk is not more than Oik .Million i) oliar.- $.}ooo, |)aid up, if the ca|)ital is over O.ie .Million, and not more th.m Three .Millions. If the capital is over Tiiree .Millions, a paid uj) capital of $5000 is the neces-.ary (lualificatioii lor a Director. lul a provision li.is heen inserted in the Act to [ire- vent the .ihusc of the proxy s\ stem of Noting. It pro\ ides th;U a proxy over two years old cannot he used, and thus sends the shareholders who attend in person, ha Directors are elected anr.u.iUv. a -k at least ever\' two wars, to tlu lareliolders they represent. The Directors are really much more in touch with the sh.irehnlders than if the proxies weri.' allowed to run for all time. Dmihlc LidhiUl If rih' Hanking ("ompanies are forinet 1 and 'over ned similar ■ly tl other Stock (Companies, hut tlu liahility of tlu sh.ireholder is different on account of the niture of tlu' huiiness -thegre.it inlei^rity reipairei the great trusts reposed in the i.uiks. ( )n .iccount of this, c\ei r\ jii'rson who take> stock in the Hank is liahlc I or a I the stock he suhscrihed for. ami for as much m ire n e IS or exampk to pa\' Alfred I'rosl suhscrihes to the amount of $ 1 coo in the Traders IJank liable the $1 a; called up hv the Directors just the same as any other Stock Comi)anv. If, however, the 1! ink wen. into li(|Uid,ition, the Directors would call up an Jiiur ^lozi. lie 20 ^ every jc l-i}s until all is [)aitl. \'\ In raso of sus|)ensi oil all pi r.soii — 270 s \\hii iii.idi' tr.msfi.rs ofcaiMlal wiiliin 60 clays l)cforo SlU'M SIISIHUSIOI 1, '.iiv linlifc,' lor .my [Mri of ih.; doiililc lialnliiy 011 shares that is iici iiiailc lip by the person to uhoiu the sliarc.s weri' traiisfLired. The /Iksi'iuss Uir Itiinl: Mdij Du Hanking roiis'sls iiriiui|ially in ileahiiy in money. 'I'he lollowiiij; are (lillVieiii ilepaitineiiis of hiisiness ;-- • (•) T le receiviiii; of inoiic) on dipn-ii. {2) 'I'lie lo.uiiiiH of money. ( ?) 'I'hc i.ssuc i.'f Hank Notes or I'.iils for use iiiMead of ■A>\i\ aiKl siher. (4) I'.Nclian^e or tlie drawing of drafts for the [jaynienl of money at a iHstancc instead of reiiiiltin;^ the currency. (5) 'I1u' rolleclion of neg(jtiahle pajicr for customers, (6) The purcliase and sale, etc., of Dehenlures, (lold, Siher, ami l''oreii:n currency, etc The liiixliiiss (I Haul: Mdij \iil ho I'.aiiks arc incoriiorated for carrying; on the ordinary business of haiikin.;, ,uid are prohibited from c.n-rying on oilier kinds of business, cither directly or indirectl). 'i'liey shall nol (i) Deal in the bii)ing or selling or the barterint; of ^oods, wares, merchaiulise, or engage in any such trade or business whatsoever. (j) The}- sh.ill not, diredly or indirei ll)', de.il in or lend mone}', or m.ike ad\-.in<:es upon the sccmit)' or pledge or .my share of its own capil.il or the ca|)ital of any otlur bank. (_5) They .shall not, directly or indirecll)', lend moiie)' on morlg.ige, on real estate, ships, wares, merchandise, etc. Receiving of Money on Deposit. Deposits— \ deposit is in reality a lo.m to the H.mk. These loans to the Hank are of three kinds, differing according to their terms: ~-(i) Current Account. (2) Savings Hank. (3) Deposit Receipt. The act of oiiening iui account with tin.' liank begin; the c.intract. The banker states his terms and the depositor accepts them .lad mikes his dep )sit. The bank may use the depositor's money for any legilim.ite p\irpose, but must i).i_\- it b.ick to him when he desires it. Deposit on Current Afi'otiiit -This r, the \)\\n on which merchants, traders, etc., deposit their funds. They use the fJ.ink lor tvvo [)urposes : -( 1 ) 'i"o re(~eive and kee[) their money safely. (2) To pa)- out their mone\ on che(iue as they order it, so taking from cver\- person the best eviileiice of the miking of a pasment -a che(iue drawn to their order and [laid by a disinterested [).trt_\' t!ie Hank. The banker rece'\'es the use of the monc)' for his trouble. Occasionally the banker pays the depositor a low rate of interest on his lowest monthly balance. The depositor receives from the iSank a piss biok as an evidence of iiis dc[)osit. All the deposits made and ciie(iues charLjed are entered in this ])-iss-book, and a balance is struck monthly, and all the cheij^ues that havi: been paid are returned to the depositor. IMAGE EVALUATION TEST TARGET (MT-S) 1.0 I.I «- Ilia 1^ ? «- IIIIIM 1.8 L25 111.4 IIIIII.6 vQ — 2.S0 — (Chapter 20, page 67, of the Laws of I'.usincss liy the author of this work.) The depos- itors in a Hank liave a third claiui on ilic assrts of aa iiisolvciil Jiank, tlic Hank notes liaving a first claim, the amount due llie (lovcniment lieini; the second charge. See form of Depositor's Ledger and description, [lages 254 and 263-4. SdriiKjs Jidiik ^Iccoii.iifs :\rc {\\i)su kept witii de[H);,itors who deposit tlieir earn ings for die purjjose of accumulating thini. It is customary for such accounts to increas-.e steadily. (i) The funds are subject to cheque by the defjosilor on production of his pass-hook. (2) The depositor recei\es from the Hank a small rate of interest, which is addeil to the account \early or half year!), accoriling to agreement. (3) .\ small ])ass i)ook, ni which the account is kept, is the evidence of the amount on de|)osit. It differs from the •'luient account in that it is usually a stea(Jy advance in the amount <>i ihc account, while in the cuirenl .ici-ount method there might he ten thousand dollars to the (le[)osit '■; credit to-da_\', and n.it ten cents to-morrow. (4) I)ei)osits may lie retxiived from any person without regard to age or station in life, hut are sometimes limited as to amount. See further descriptions and method ol keeping account, i)ages 254 ami 263-4. Di'j)(>sil Rcrcijtl -W hen a depositor has a sum of money that he can leave at in- terest for a time, he usually dejiosits ii on ''Heixisit Leceip.t," sometimes called "Cer- tificate of Deposit.'' (I''or form, etc., see l)age 264. The Depjsit Receipt is the evidence of the amount of his deposit with the bank. All further description and methotis of keeping accounts, and a form of register therefor are given on pages 254 and 264-5. r". 1' Loaning Money. Till' Loitn'nuj of Moikij is the second de[iartment of the business of a bank. As noted previously in this chajiter the banks are not allowed to invest their funds in Real Estate .Mortgages. I'he |)rinci[ial \ Msiness is tlone in discounting negotiable paper, such as notes, tlrahs, bills of exchange, etc. These may be either: — (i) (!uslomer'.-> pajier iliscounted by the hcjlder; that is, notes drafts, etc., that have been given in the ordinary cour.se of trade, or (2) Acconnnodation pajier, in which one person has become security for another (without receiving value), for the [lurpose of borrowing. Tlic St'citrili/ (lirt'ii Money is not borrowed from a bank on the strength or securitv of one name. In either of the foregoing cases, customers' or accommodation paper, there are two names, one as princijial debtor and the otlur as surety. The bank in ea''h case is an "iinii;cent holder for \ahie," and therefore can collect from all persons liable on that paper and therefore no bill or nott- in the hands r f a bank as an imiocent holder, can be held void on accoimt of drawing u>urit)us interest or on account of being tainted by fraud. The bank may stipulate for, and take any rate of interest, not exceeding 7 per cent, per annum, and may pay any r.ite agreed upon on deposit. It may charge as high as one lulf of one per cent, as commission for collecting the paper, of its customers. If piper is for 3 nunths and tiie half per cent, commission is cliarged this equals 2 per Wi-J. i: — 28i — cent, per niimiin not coiiiuiiig ilays of j^'raco, lliis making a maxinnin rate of y per cent, for discouiil and cullcclioii in all parts of ilic I )oniini()ii. The norlli wc^ler can iiorrow as cheaply as tiie merchant princes of our eastern cities if lie will furnish security. Colliitcrtil Security — Many persons very rightly refuse to indorse paper for others, and in turn do not ask (or indorsement. They give their own note to the bank and place other valuables along with it as collateral security. 'I'lie collateral security may consist of any one or more of the following :-- (i) Customers" paper left with the owner's note to secure it. (2) Warehouse receipt representing grain in an elevator, goods in a storehouse; luMiber, tie^, lath, etc., in a )ard; logs, poles, etc., in a bay, co\e or boom, eti'. (3) Mill of Lading or Shipping Receipt that represents goods in transit. (4) Hy])Othecati(jn of goods by wholesale dealer or of the manufacturer, while \n course of construction, under Section 74 of the Hanking Act of i8go. (See the following form.) (5) .Mortgages or T.icns on Real Instate or chattel property. Note. These arc taken only as additional or collateral security and not as the primary obligation of the maker. Furni 0/ Hjjpnlhcrdfion under Section 74, Hanking Act of 1890. In consideration of an advance of $0oo m.ide by the .Merchants Hank to James Mcl.auchlan, for which the said I'.ank holds the following note, dated Owen .Sound, March i, 1.S91, for $100 for three months at 7 per cent., the goods, wares, and merchan- dise mentioned below, are hereby assigned to the said i5ank as securit) for the payment, on or before the 4th day of June of the said advance, together with interest thereon at the rate of 7 i)er cent, per aninun from the isl tlay of .March. 'I'his security is given under the |)rovisioni of Section 74 of the l>ank .Act, and is subject to all the provisions of the said .\ct. The said goods, wares, and merchandise are now owned by James Mcl.auchlan, and are now in his jjosses'^ion, and are free from an\ umrtg.ige, lien (jr charge thereon, and are in his warehouse, \o. 36, I'oulett Street, in the Town of Owen Sound, and are the following : — Two cliests Oolong Tea ; 50 lbs. Java Coffee ; 25 lbs. .Myrtle Navy Tobacco ; 200 lbs. Candies ; 200 lbs. Nuts ; 10 boxes Soda IJiscuits. Dated at Owen Sound this 15th day of .March, iSyi. J.\Mi:s .Mci..\r( iii..\\. (I,. S.) W. liKOWN, ll'i/iicss. 'I'he varied forms of collateral security that may be gi\en, m.ikes the Ikmking system available b\- 11 classes of jicople. The Warehouse Receipt and the iiill of Lading being taken as collateral security, enables all <'lasses of dealers to buy, and keep on busing, all classes of products of the firm, the forest, and the mine, .\lmost the entire grain pro(luc:t of the country is handled on this [jlan the buyer iinests his own cajntal or that su|)])lied him on accommodation pajjcr. I'or grain he takes his warehouse receipts and assigns them to the Bank collateral with his note, and has an advance of, say 75 pei cent., of his receipts, or $7500 made to him. When this is di)ne he brings his $7500 of warehouse receipts and gets another advance, and so on. When he wishes to sell, the iiank surren ders one or more warehouse receipts, and gets in their place a Bill oi Lading or Sliii)[)ing 1 1 1 1 r! i'll 2iS2 — • ;t I Receipt in their favor, which tluy iiuloi^c lo th^ir ;ii;i.nt-- uhnc the stulT is being shipped. On its arrival tlic Hill of l,ulin,i^ is imlnsod to the pur(■h,l^^.•r on receipt of the pay for the grain. 'I'hib money is placed lo the credit ot the dealer or indorser on h:s notes. What is true of tiie grain dealer is likewise true of all dealers, as a warehouse receijjt may 1)0 given fur saw logs boomed in a cove or hay, or almost any other commodity. The foregoing Form of lly,)othecation is convenient for the manufactmer. It enables him to carry on his biisine--^ without nulor>ement or mortgage of his property, or anything reiiuiring registration, or I'lc intcr\ciition of legal gentlemen The form is ,i simple one, and execution o( it is imI more diflicull tlian a promissory note. It enable^ the manufacturer to get the cajiilal lie rei['ii:i, f.r the carrying on of his work, and the making up of largo stocks to be ready lor >,iIl' when the time comes to place the man- ufactured articles in the market. Our svsl'. in is so elastic that sufhcient capital can be furnished to carry on such work and lo purci .ise the entire products of grain, etc., in the fall and winter, and contract timing the summer without loss to the bankei, and at a low cost to the dealer or manufacturer I'oi interest. The Hank Act .ilso gives the bankers power to take an hypothecalion of ships Ijcnig built so that the shipbuilders mav be able to get money to push their work. T/ie lintnch Sy.shiii 'I'lie (jj)portuniiies .afforded to I'anks by the is,-,ue of cur- rency to push out and extend bus:iie>> on the Hranch .S\ ,icin has given to die Dominion sjilenditl banking facilities. Those ha\ing dieir head olticis m Montreal ha\e eMinded their branches to both sides of the (loiuineiit. The peo])le of the Xorth-West are well provided with banking facilities, and to this iact [)erhaps as nun h as U) any other, is due the rai)id de\eIo|)ment of the W e^trr 1 p.iris of the countiw The (arm products are rap- idly handled, and cash paid for iheiii. iKcause the ll.mks, through their br.inches out there, have supi)lied cash lo the deders. who i:i turn exchanged it for the [jroducts of the country, and this at 7 i)er cent, interesl, while across the line in the Lulled States, under similar conditions, the rate of interest jLiid is fnun j to 4 per cent, per month. Oiu- rate of Bank interest is uniform lhrt)Ughoui ihr country b\ legi-^lation. Bank Note Circulation. Tlic Issue of Hdiilx' \olcs Hanks in ("anada. with two e\<'eptions, are allowed to issue Hank Notes to the full extent of tluii- unimpaired pn'd up capital. ICxample — If a Rank has $2,000,000 ol' paid up capital and none ol it his been lost in .my way, they can keep in circulation $2,000,000 of their Hank Note-.. .\li Hnik Notes issued must be either $5 or some multiple of .$5. All bills under .^5. such as is, 2's. and 4's, are issued by the Djminion (lovernmenl, and e\ery H.mk i^ re(|uired to holtl al least 40 percent, of its cash reserves in the l)ominion (iowrnmeiil notes. 7'//c Jitinic Cirriildfioii t^i'di iii/ilidii /•'iind, is a \\\\}(\ ( reated under the Act of i8yo in the hands of the l\.ecei>er Ciener.il, li\ e.u h Ha:ik doing business contributing to it an amoimt eipial to 5 per cent, ol it- aver.ige circulation. 'i"he am(3unt of each ]:5ank's contribution to be adjusted annually on ilu basis of the a\erage circulation for the past year. This fund is to be used by the f in. nice Minister in c.ise of suspension (jf any Bank to take up the notes of th.il H.mk two months after sus[)ensiun, so that ihey may not be sold or paid off at a loss by th; li jider., nor the holders be inconvenienced by the !:t \l El -283- notes not l)i.iiiy iKgi)ti;il)le on aocouiU of such siispciisiun. Tlic notes of siuli ^ius|)cn(.lccl Hank l)ear interest at 6 per cent. I'roni the tlale of siu.li suspension until jiaicl. 'i'lie Re- demption Fund in tlie liands of tlie I'inanee Department l)ears 3 percent, interest and should it ever become depleted by Hank failures, su( ii deficiency would have to be made up by the other Hanks at the rate of one per cent, of their average circulation yearly. It will be seen from this that the capital and as>els of all ( 'anadian Hank^ are pledgeil in this fund for the circulation of each individual Hank. l'",ach Hank would be recjuired to put up its share of the ileficiency in case of failure of any one liank. The Seen rifi/ for tin- Hank iVo^'.v— The payment of (Canadian Hank notes is amply secured as follows : - (i) They are a first lien on all the asset.; of the I'ank that issues them, that is, they must be redeemed beft)re deposits are paid, or any other debt licjuidated. (2) Thc\ are a first lien on the shaiehoklers themselves by the Double Liability clause of the Hank Act. (3) The (!irculati(jn Redemption fund in the hands of the Receiver (leiieral is for the express ])ur|)ose of redeeuiing such notes. (4) 'I'he c.ijjital of every Hank in the in minion is also pledged at the rate of one per cent, of its circulation per \ear for such repa\inent of notes of insolvent Hanks. The actual security held for a lircul.itioii of Hank notes of about $33,000,000 is as follows : 'I'he assets of all the Hanks amounting, with the Redemption I''und, to about $27(), 000, 000, and the Double I. iabil'ty of the sh.,rehoklers about .$63,000,000 in all ab<)ut $339,000,000, or more than $10 of security \.v one of circulation. Orcr (Jirculiitioii. The e\|)ansion of trade in this gro'.ving country, and e.ipeci.dl)' the extra exjnnsion reipiiretl at'ter harvest for the handling of grain, affords (piite a temp- tation to go beyond the limit of issue allowetl by law. There are \ery heavy pen.ilties set on any infraction of the law on this point, they are sutficieiuly heavy to deter every banker frt)m going a dollar beyonil his limit. A fine of $1000 for any over issue from $1000 to $20,000, and $100,000 for an o\er issue of $200,000. lidtih \ofns (ilinnfs iif /xir —OuW .1 short time ago ("anadian Hank Hills were at a serious discount if carried a considerable distance from place of issue. .\n Ontario Hill carried to Hritish Columbia would be at a discount of ic |ier cent, sometimes, and the same when the Hritish Columbia Hank N'ote was carried East. The .Xct of 1890 pro- vides that each Incorporated Hank must establish agencies for the redemption of its notes at I lalifax, St. John, Ch.ulottetown, Montreal, I'oronto, Winnijieg. N'ictoria, and other pl.ices to be named by the Treasury Hoard, and tin.' liank is l)t)und to receive its own notes at par in payment of any debt at any of its offices, branches, or agencies. The Hank notes now do not sell at a discount. Other Business. Ihtuk Draffs and liil/s of Krrhain/c — Hanks arrange with one another fcr lines of credit, so that one bran:.h may draw a draft on another l!ank, or branch of a Hank for a customer who wishes to remit money to any i)lacc' at a distance. The draft is made in favor of the person that the customer wishes to |)ay the debt to. and is remitteil by mail to the creditor. The Hanks settle periodically, say every three months, among theaiijlvoi. Drafts for foreign couiUnes are known as Bills of K.xchange. - J 84 — Makiriff Colh-ctidns liiisincss incii ind olliers frcijiienlly leave their negotialilo paper in liie hands of tiicir banker fur (xillecliuM, at wliose place of liusiness it lias liixii made payable. The liank charges fruiu one eigiitli to one-half of one per cent, cum mission for its work. liro/cuilding Society b(joks. We will put all of the business in what we may term the "Teller's Cash liook.'' It might be called the Cash Journal. It is in reality a Cash Book into which all business is enteretl whether they are really cash transactions or not. If there is not any cash really ]»assed. tiie iiUKumts must be entered on both sides of the Cash Journal, for exam|)le the last transaction in the first day ; Rec'd from Llemin^ iV Co. for deposit, checpic of L. I'earen vV Co. for $3,226.70. No cash is really handled, yet the real transaction would be to pay out of I'earens' Deposit Account the amount of the cheque, putting it on the Cr. side of the Cash liook, and receive back the money on the Del)it side of the (!ash liook, and this being Cash Dr., Fleming & Co's account would be Cr. A little study anil comjiarison of the eiuries with the Cash Journal will make the method clear. Remember tiiat you are really n;nning a Cash Book in the full sense of tVie term, and that when you place an entry on the Debit side of Cash Book that debits 2S5- Hank as lo- lividciids diK' c by the Slat- 1 Batik to till.' jrs at the end chief officers, ailed for, and I Bank Stocks the bona fide at par at any It, deduction, it in a simple are familiar ■ unnecessary ne in Conner- rthat we may s in reality a ansactions or n both sides roni Fleming dly handled, e amount of le money on ccount would ivill make tlie full sense of ik that debits Cash, and the person or tiling for which it is rece^veil must be credited in order to pre. serve tlie ecjual Dr. and Cr. In like manner [ilacing an entry on the credit side of the Cash Book credits Cash, and the person or thing for which it is paid must be debited. This Cash Journal does not differ materially from the Cash Book in the I'luiiding Society. There are fewer columns and it is easier managed. It would be kept liy the teller of the bank, who pays out and receives the cash for the institution. He likewise keeps a balance book in which he shows the totals of the receipts and payments of cash and net balance every day, also the actual bills, silver, etc., that represent that balance. The Deposit Account is kept in the same way as in the lUiildiiig Society, that is, the total sum of ihc^deposits is in the account in the Ceneral Ledger, and the detail in the Deposit Ledger (see description of Deposit .Xccount page 254, and of Deposit Ledger pages 263-4). The Deposit Receipts will be managed in the s;>me way as in the Building Society — one general account represents all Deposit Receiiits in (leneral Ledger, (see page 254) and a Deposit Receipt Register as illustrated on 264-5. Bills Receivdhle. — For our Hills Receivable one general account would be kept in the Ledger and the detail of the actual notes that become the bank's property by being discounted for customers a'e ke[)t in a bill liook like that usually kept by merchants. There is no need to illustrate the form in this connection. Billr. f(tr CoUection. — When Notes, etc. are left with us for collection they do not belong to us and are only entered in a l>ill I'ook like those in common use, but some- times called a Collection Tickler. The name is new, but the fcrm of the book it like the common Bill book. When a bill is collected the amount less collection charges is placed to the credit of the pers(>n lor whom it was cotlectcti, in his Deposit Account. It is put on the Dr. side of Teller's Cash I'lA.k. It is marked out of the Collection Tickler. If a lull is not collected but is returned to the owner, a memorr. idum is made opposite the bill in the "Tickler." It will be noted that there is no Ledger account for bills left fc^ collection. The foregoing aiiplies to local bills. If there are dealings with other banks in which bills are collected for them and the proceeds remitted, then such amounts when received in cash could be credited to "Collection and Remittance Account,'' and when the cash was sent out this account would be debited for the amount. The balance of the account would show the amount of any collections that hatl been received and had not been remitted. « Discomd and Ej'clHiiuje.-ln this column are placed all sums allowed us for Hills Receivable, and all exchange on drafts, and for the collection on bills and notes. If it were desirable these might be kept in separate columns and posted to separate ac- counts in the Ledger. Merchants Hank. — On the Dr. side arc placed all sums for which we credit the Hank. We have the privilege of drawing drafts on them jiayable at par at any of the branches of the Hank though drawn on the Toronto branch. When we receive cash for a draft we place the amount to the credit of the Hank by putting it on the Dr. side of (!ash Journal. When we remit cash to them it is put on the Cr. side of Cash Journal, and that is to be debited to the liank. The Ledger account with the Hank will show tho amount at our credit, balance, or over-draft. ill m H'i" il I hv.i Mr iM h;: i!f = — aSfi — Post I n(j from the Cash .Ttnii tuiK — It is a very simple process to post from this Ijook. Tlic cash is not posted to tlic Ledger, the l)()ok simply represents the Casli .\r icnint. The balance may lie taken into the Trial Halance on tlic Dr. side. 'I'lie items in the Sundries cuiinnn on the Dr side are posted sc|)arately and the folio put opi)osiic each one in the usual way. The total of the Deposit, Discount, I'ank and other columns are posted to the credit of their various accounts. The Cr. side of the Ca.sh Hook is |)osted similarly to the Dr. side, hut to tlie Dr. sides of the various Ledger accounts. 'I"he following transactions, covering a week of time, may he |)osted and journali/id in the ("ash journal and poited to the Ledgers in the ordinary way. A Trial iJalancr will be taken each day, also a statement of the deposit balances to show that the .sum uf the account balances agree with the balance of the deposit account in the general Ledger. It will be unnecessary to make a balance sheet showing profits, etc., as theie is not enougii business in a week to make profits, and more transactions would occupy too much s|)a( e. There is nothing new to learn about the closing of the accounts of a Hank. They clo^o just the same as the books of any other business. Memoranda of Six Days' Transactions. M.\KKi).\i.K, May 2nd, 1892. W. (iaynor and .\. !'.. Reilly form a co-partnership to engage in the banking i)usinc>s in accordance with .Articles of l'artnershi[) executed this day. The gains and losses to lie shared ecpially. I Iaynor and Reilly invested $25,000 each. Paid rent of Hank building for one month, $150. Received of A. K. Jones cash on deposit, $2,000. Remitted to Merchants Rank, Toronto, to be placed to our credit, cash, $10,000. Raid for Office Rooks and Stationery, $50. Received cash of FL (!am])bell on deposit, $3,000. U. Camiibell bought of us a Sight Draft on Merchants Rank Toronto, for .$2,000 at '4,' Lxchange, received jiaynient liy check on us, $2,005. Received of E. Rearen \: (!o. cash on deposit, $5625.50. Raid A. v.. Jones' accejitance in cash, $609.30. I'aid H. Camiibell's check on us, in cash, $375.30. Raid iv Rearen \- (!o.'s check on us, in cash, $615.50. Received of i'leming iV Co. for deposit, checpie of Iv Rearen iV Co. for $3,226.70. NorK. Kulc Cash Hook, joiirn.ili/e .ind post, anil ni.nke statements of Deposit l.edfjer and Trial li.il.mce of (ioneial Lcdj^er at the close of every day's Imsir.ess. Tuesday, AFay 3rd, 1S92. Received of ^L Cowie X: Co. cash on deposit, $10,000. Discounted for H. Cnmp- hell a note made by A. E. Jones for $6500; Discount $21.67 'i"d proceeds ciedited. Raid M. Cowie \: Co.'s che(|ue on us, -in cash, $4,325.88. W. Caynor withdrew for private use, $500. Raid H. Campbell's cheque on us, in cash, $536.25, Kemitted by letter ici Mcrjhants Rank to be placed to our credit, $5,000. Raid R. Rearen \- Co.'s cheipie on us, in cash. $1414.25. Sold M. Cowie iV Co. sight draft on Merchants Rank for $2,000. I''xchange $7.50. Received payment by che(|tie on us. I'aid Fleming iV Co.'s chei pie on us, in cash, $1,226.70. Received of A. K. Jones on deposit, cash $5,100, and che(]ue on .NL Cowie iV Co. for $3,624.17. Received of I'leming \: Co. cash on dejiosit, $8,932.80. Wednesday, May 4th, 1892. Received of .\LCowie I's: Co.cash on deposit,$3,ooo. .\ccei)ted and paid T.E.Simpson's sight draft on A. Iv Reilly, $500. Raid A. IC. Jones' clie(pie on us, in cash, $2,500. Sold M. Cowie & Co. a sight draft on Nferchants Rank for $3,000, at '4/'' Exchange : Received payment in cash, $3,007.50. Received of A. E. Jones cash on deposit, $1,500. Raid .\. K. Jones' cheipic on us, in cash, $625. Raid H. Cam[)bel!'s cheipie, $4,155.37- Raid K. Rearen & Co.'s cheipie, $235.26. AL Cowie iV Co. having overpaid Exchange yesterday, $2.50, received credit for that amount to-day. Received of M. Morrison cash .S7 - l| on (loposit, $.i,J45.SS. Rccciwd of I'll mini' .V Co. casli on (k'liosil, $555.(^0. Paiil M. Moiri-ion's rlui|iu' on us, $2,,P5.()o, I'nid II. (',inipln.'li's clu'iiin.' on us, $i,8i).(.Ss. Sold .\. E. lone.".' si^lii (.Ir.il'l on .Mcnhiinis II. mk. dl I'ornnto, lor .$1 12 ; l'Aclianj;e 28 cents; Rccciscd |iaynKiu l)y cIumiih' on us. .\, |",. joni's paid lu's note in favor of H. C"anipi)cll duo to-iiay, by clKqUL'. I in w hy sit;lu tlr.ill on .Nltrcli.nits iJank ail cash on deposit, .$7,8S.S. .\I, (.'owieiV (.'(j. note lieinj,' protected, received from tliein in cash lees, $2. i'aid II. Campbell's che(iuc on us, in cash, .$5ti.5f). Thursday, .May 5th, 1892. I'aid .M. Morrison's note due to tlay and presented for payment l)y 1>. Traynor, $900 and char^'cd to her Deposit .\c(t. Received of II. Campbell on deposit, cash, $8,000. Received of Ci. I'. Sherwood, c.ish on deposit, .$1 J, t),?2. 25. I'aid II. Canipbell's che(iue on us, in cash, .$823.40. Discounted for M. Cm\ ie iV ( 'o. noti' of I'leniiiiL; iV ( 'o., dated .\pr. 1 5 for3odays,.$i 500: Discount lor i,^ days and proceeds credited. I'aid (l.l'.Sherwood che(iue in cash, $4.227.9f>. Receised of l«. Stewart on deposit. .$1,000. and issued him a certificate oi deposit. I'.iid M. ( 'owie \- Co.'-- clu(|iie, in casii, $32.^ i'aid .\. \'\. Jones' clieiiue, in cash, .$197. i(). I'aiti ii. Cuiipbell's checjue, in cash, ^1,523.25. Re- ceived of ileminij &: Co. cisii on de|)osit, $420. R.eceived of .\l. Morrison on liejjosit, $_^,ooo: Issueil a Deposit i\eceipt for $1,800 and credited l)alance. I'aid I'leming iS: C'o.'s cheque, in cash, $.j, 1 58. 10. I'l, iced to our credit at Merchants i'.ank, .$5,000. Sold to Ci. I''. Slier",;) )d, sij,du ilraft on Mercliants liank for $330. ra; ; I'Achange 83 cents ; Re- ceived payi.i_:;t liy cheque, i'aid M. .Morrison's cheque, in cash, $300. Friday, May 6ih, 1892. daynor drew out for pri\ate use $500. i'aid sundr\- expenses in casli, $50. I'aid M. Cowie iV C!o.'s clmiue in casli, .$150. Discounted I'or C. I!. .Moore, note made i)y A. H. Julyan, $813.80 : Discount $4.07 and pnxeeds credited. Received of Iv I'caren i\: Co. on de|)osit, $C)5o. I'.iid Sherwood's cheque in cash, $123. Received of M. Cowie iv Co. on deposit, cash $200, and clu'ipie f>n Sherwood $527.25. Sold R. \. Sinclair sigin draft on Mercliants ii.uil-' lor $1,000 ; KNchange '4 and received |)ayinent in cash. I'aid .\. I'-. Jones' checpio in cash, .$250. Recei\ed of W. li. Hell, cash on deposit, $871. 85, i'aid l''leming \- (!o.'s ehecpie in cash. $1,700. Received of I-'leming iv (.'o. cash on dei)osit, $500. raid C $350. I'aii and receive( .Saturday, .May 7th, 1892. i>. .Moore's che(iue, in ( .ish, $200. Recei\ed of W. H. Hell cash on deposit, W. 1!. iuir^ iheqiie in casli. $400. 1!. Siew.irt jiresented De|)Osit Receipt cash. .\. 11. |u!\.in paid his note by c.ish, le>s discount to maturity, $3.93. Paid A. E. Jones' cheque in < ,i--h, $233.88. i'.iid M. .Morrison's checiuc in casli, $1919.98. A. 1'^. Reill\- drew for prisate use, $500. Received of C. H. Moore casli on deposit, $54.1 I. Paid I'",, i'earen \- Co.'s cluque in C.1.-.I1, $450.50. Received of E. i'earen iV Co. on deposit, .$i,57o.3(). Receiwd for leiit of rooms al)o\e baiil<, .f2o. Paid for coal and other expenses, $10. Sold (1. I'. SherwiK d [''.xchaiiL ected for .\. M Jones note made by 4 ; Proceeds creilited to Jones and eminj; iS; Co. on deposit, $252.60. or coal siuht draft on .Merchants Hank for $2,000 ; '4 ; Rii(.i\f(l p.iMiieiil in cheque on us. i'.iid .\. 1-. Jones' che(|Ue, $500. I'aid I'leiiiiiii; \' Co.'s (lieqiie in cash, $1,200. Col" C. H. .Moore ill iiis faxor, for $218.44 ; Collection '■ note charned to Moore's account. R.ecei\etl ol :88 — I * i - IS. ;ti!- ■ t; ■ I /?r. Tollcr'vS Casli Ikook for ii I>ATE. K|| Rk.marks. 'l \. Ii.iiii;f ,■;. •^''''■' ''''"'^ '"'''■■ Ci-iiili,. Ill' DkPoSIT. Dilcuuiii , Itaiik, Ktc. ..fiin,u.U \V. (Inynor invcsti-il. , , . A. i:. Ri'illv .. A. 1".. IdllCS (Icposilcd . . 2000 00 l[. C!ain|ilKll II 3000 00 MLTclianls liaiik Draft . I",\(liangc (in I >rart .... K. l'i'aiciK\:(!().(lci)usitcd 5625 50, l'"Ioiiiinj,' i^: Co. n , .^226 70 Total Deposit II Discdimt II Hank . . . II Cash . . . ^S52 20 5 00 5 00 2000 00 2000 00 Teller's M'MiKlK.S, 25000 00 25000 00 18S52 20 5 00 2000 00 65857^20 65857 20 Cash Book for -\ To IJalancc Cash | M.CowioivC"! >. deposited 1 0000 00 n.Cainphcli. note credit 6478 33 1 )isiu)unt on al)ovc . ■ • -il Mercliants Hank l^raft Exchange on Draft . . . ',.\. K. Joiies, deposit. . Kleniini; \: Co., u . . 8 Total Dejiosits Discount Har.k . . . Cash ... 8724 17 8932 80 .VD35 30 21 67 7 50 2000 00 Balance ('ash Merchants I'.aiik Draft. ICxchanf^e on Draft . . . . M. Cov.io vV Co. Deposit A. E. Jones, « 3A[. Co\viev\: Co. n 3 Nf. Morrison, 1, 2 l''leniing iv Co. n Merchants Hank Draft. Ivxcliange on I )raft . . . . nHills Receivable 21; 17- 2000 GO 4«375 90 34 "35 30 29 17 2000 00 84540 37 S4540 37 Teller's Cash Book for 59405 62 3000 00! 7 S0| 3000 00 1500 00 2 50 4245 88 555 90 1 12 00 o 28I 650c 2S.) - MoU(l;»\'. M;i\' Jiul. 1! )\ ''J, Cr. RlMAKKS. I .\l ISill Pki-osh. I'iscouiit. |;.uik. Koc. ..I ir.xiiL'usi', 'M .11(1 Kiiii . . Iiooks i.Mor) ^o \). IV'are'ii \- < 'o.CkX.). I '> SITutal l)i IHISIl.v 27 I'.aiik C'asli .'Si 30 asii . . Halancc Cash Tuesd a y. May Sid. 1892. Jiills kccciv.ililr I ^[.M.Cowici'vCd.CkXd.i .i,;j5 SS iW. Ciayiior witlxlrow ... ;|ll. Cainpliill, Ck Xd. ,:; 5,^0 ^5, |N[crrIiai lis Hank I )i'|)f)sit | iJ'l.l'oarrn \ ( 'o.Ck .Xd.,:; 1.(14 25 'M.Ciowic iV Co. " M J J007 50 [''Ic'iniiii.; \ Co. n " 1 ij.'d 70 M.CowJL' iV Co. '1 ■> ^ ,?"- I lyi XlTotal DopoMis ',>i.i4 75' 27 36 11 liank M liills l\i'('iival)k M Casii Ualanci; (Jasli {Wednesday. May 4th, 1892. lOOOO oo iioooo oo i.\. E. Kc'illv witlulivw. . !|.\. H. Jones, Chock Xn.j ijU. Cani|)l)iH, I. .. 4 |iC. IV'arcii I'v Coi n 4 I'Acliani^o M. Mcirri.son, Ck. Xo. 1 II. ( "aniplicll. M 11 5 lA. !•]. I ones, n n .). M 1, 5 H. Campbell, h m 6 4155 -.>5 -.1-5 1894 1 12 6500 5" 00 00: 37! 2(> ()0 Sv 281 00 56 65COJ !;ooo 00 5000 00 6500 2 50 ctlilicalf 1 l»t:p..MtSrS|iKIKS.| 150 00 50 00 7281 30 10000 00 17481 33 4«375 yo 65857 20 ^-™-.=*»-«_. 500 00 ,'3'34 75 ! 5000 00 (1500 00 -5 '34 75 59405 C)2 «454o 37 500 00 ill p''i I ■ . J; t>: i) !■■ — ago — Teller's Balance Book. n.il.mcc frniu Saturdiiy, Apr. .?otli. iH'P • ooo oo Ca^ili Dr. Dcpusiis ,. ., ,. $i,}'*>S-' io |)iMCOiiiu . . . . . . 5 00 McrcliaiUs liank . . . . 3000 00 Hills Rc( civablc .. 000 od CLTlifu ale ol Dcpusil . ,, 000 00 Sunilri'jij . . . . . . 50000 00 Receipts for day . .. ., $^)SSS7 20 '''"li'l If^'S'^S? 20 Casli Cr. Deposits .. ,, ,, $7jSi 30 I )is(uuiil , . . . 000 00 Merchanls iiaiik . . . , locoo 00 liills Reeeisalile . . . . 000 00 Certil'icate of Dei)osit .. .. 000 00 Suiidrie.s . . , , . joo 00 Payments for day. .. .. $17481.30 Halancc forward . . .. .. ., $4>'i375 yo Cdnh (III lutnd us folloics : I5.\Nk Xori.s. 40 X 1 $40 00 (iold .fSooo CO ^2 X 2 -^ 104 00 Silver 3000 00 40 X 4 ido 00 Copper 1000 00 'J5 ^ 5 = 475 00 Script 250 00 Sox 10 .Sio 00 Stamps 3(1 t;o 100 X 20 - 2000 00 250 X 50 -r, 1 2500 00 200 X 100 - 20000 00 122S6 yo Total liank Notes $36o.S(; 00 3'^'oSij 00 'I'lie ;;rand total should eipial die balance ahovo $48375 yo 'The object of this book is to put on record the exact commodity that represents the ("ish ISook balance. If there are any Due Hills or the like held as cash there are three lines on which to write them, lollowini; alter Siam|)s. This form would be tilled ui) at the close of each day's Ijusiness. If, the cash on hand did not correspond with the balance all vouchers would be checked over until the discrepancy were diseovered and the wrong entries corrected before posting is done. ,il!flp 21)1 Municipal Book- Keeping. There are no new principles of book kcrpinj; to Ik' oxplaiiud in lliis connection, !iin.|)ly the old ones to be apphed to the transactions nt a iiiiinii ip.ility. A municipality Slid) as a town, township, villaj;e, city, el<'., is a pul)lic- i (Mp()iati(jii— a mm trading lurpd- ration. In it there arc not any profit .-xnd loss coiisiilcialiuns. It is entirely a (piestion of the collection of certain items of cash and the pro|)er disposal or payment of the same. 'I'he accounts ke|)t with such revenue and payments shi uld dearly represent the yearly business as well as to carry forward any balances of assets or liabili'ies in the various ac- counts. It may be well to devote a few lines to dcscrihinj^ tiie various coriioration otVicers, ()f which there arc two kinds, viz., tho t'lat are elected annually and those who are appointed. Officers Elected Annually. The Chief Officer. — In a town or ci • heclmiot^d is tlie Mayor ; in a township or villa^^e the Reeve. He should presic'j at all mei ini^.i, keep an oversight over the busi- n 3S of the corporation, sijjn all orders for the p.iy '^nt of money, and, on behalf of the corporation, sign all promissory notes, debentUMS, ontracts, etc. He is elected annually. Other Elective Officers are Councillors and Deputy Reeves in townships and villages, and to these the Reeves arc added in towns and citl'-s. These oflicers with the chief officer are supposed to exercise their collective ability on the coiitn^l and man- agement of the business of the municipality and espet them. These officials are usually divided into several committees to look after the various departments of the corporation business Certain funds are placed at ilit disposal of each committee to meet the expenditure of each particular branch of the business. The following are some of the committees : Finance Committee. — This committee has the general management of the financial affairs of the municipality, the collection of taxes, rates, assessments, licenses, the invest- ment of sinking funds and the apportionment of the revenue to the various other committees for expenditure. (2) Board of Works. — This committee should (jversec all work done on roa'ls, bridges, public buildings, etc. (3) Water Works Committee— 'Ihc name implies that tiie business of this committee would be to manage and control the water works system of the town. (4) Totcn Hall and Market Committee. (5) Cemetenj and Parks Committee. (6) Harbor and Railtcay Committee. (7) Benevolence Committee. (8) Printing Committee. (9) Police Committee. Officers Appointed by the Council. The Clerk. — The Clerk is to a certain extent the manager of the business of the municipality. He keeps the records, makes out voters' lists, collector's rolls, ttc. k 2(j2 The l'r('ns)i)T): — This officer receives and pays out llie funds of the town and signs dcl)critincs and otlicr ohiiuatiuns of the Lwr. lie should Ik; more tlian a receiver and i)aynKislL'r, not a kind df nifcliniical '" nickel in the slot" machine that receives all that is broiiyht to it and deliveis ti|) all that is called for- luit a real, live business man who understands financial matters fully, that he (a sort of pernianei.t officer) ma) he able to advise the aldermen, reeves, etc., and especially the finance committee, that in some towns consists of a fresh Iwt of members ewry \ear. 'I'd be a proper treasurer he sliould not only receive and pay out the funds and keep the books, but should be an active adviser of the a.dministr.ition on all the matlers of finance. lie should understand tho- roughly all llu sources of re\eiuie and what mav l)ee\Mect(.d fiDin them, and all the needs of the municipality, lie shoukl be able Id forecist the financial affairs for years ahead, and should keep the council postetl in advance reganling all approaching needs in finan- cial matters. If he simply acts as receiver and I'ayma^ter it would be better to appoint a Bank the treasurer, and save the salary of such an oltic ial. .\s this officer h.is to do with the hooks with which we purpose dealing, we have devoted considerable more space to the discussion of his duties than to the others. Till' Collector is the iK^rson who is entrusted with the collection of all ta.xes, rates and assessments collectible by the niunicin.tlity. He pays iiver the funds to the treasurer. He is paid either a stated salavv or !>)■ a commission on .ill he collects. Till' ^issc.s.sor is the olficer who |>laci.s the \alu,uiun on the laiul. buildings and liersonal projiertx' on which the taxes are le\ii.d. Liabilities Exceed Assets. .\ municipality being a non-trailing institution, simply raising revenue to meet current eN|)enses and general needs of the town, it need not he a Mir[Hi^e if there is no great dif- ference between the .ij-sels and iiibiiities of a town, and further, tluie nvvd be no serious apprehensions if sonieliiiKs ii is found iU.\[ all the liabilities together are greater than the assets. There are three classes of expenditure, i>l, those sums that are invested in public parks, buildings, water works, etc., where there is a valuable asset protluceii to represent the expenditure of money. In this case the expiMKliture of money is simjily capitali/ied. If all exitenditures were of this kind the assets would very soon exceed the liabilities, for although the money were borrowed on debenture to [lay for such assets, the accumulation of a sinking fund to meet these debenture^ would iiiereasi the assets ()\er the liabilities. jnd. 'i'lie annual expendilme of die \early sums collected to meet current expenses. This ('lass of ex|)enditure does not teiul to proiiuce any di^crcp.incy or ditfeience between assets and liabilities. It is not capitali/ed to jirodiice additional assets over liabilities. .:rd. Ivx|)enditures of borrowed money that do not prodtiee any tangible asset, that are not capitalized, diat are exiiemled lor the gi'Ueral puliiic weal. In this case a liability is createtl without iiroilucing a \aluable asset, thus tending to make the liabilities exceed the assets. Of such expenditures we might mention bonuses to railroads, factories, etc., also extra large expenditures on roatls, bridges, harbor works, etc., which when done are only public conveniences anil i)ublic benefits upon whit h no monetar\ value can be placed. If a town had every dollar of its debts [laid and had $20,000 of cash and real — 293 — and personal property, and were to rreate a deljciilnrc debt for a railway hoinis of $100,000, the total iiahilitits would cNceed liu' assets by $8o.cco, and still there might be no canse for alarm. Two Classes of Liauilities. I'Vom the foregoing it will i)e noliceil tiiat there are two elasses of liabilities, (1) those presently payable, and (j) \'. use iwt pie^eiitly payable. Those |)resently payable consist of (r?) ail siuns due and pa' able for puljlie works, salaries and expenses that are to be met by the current year's K\y of taxes, (/') interest Sinking i'und> and Delientures [jay- able the current year. If llu'se two classes exceed the ciuient year's re\eiuie, then tiiere is cause for alaim. 'I'iie liabilities not presiitly payable may have set off against them (1/) all public property, real and jiersonal, (/') all Sinking l'und-> prosided and invested for the re|)ay- ment, such liability not presently [lavable. It tl'cse two cla^ses of a.ssets do not nearly ecjual the liabilities not presently pajab'e, iIkix- may not be anr cause for fear, or talk of financial embarnissmcnl, as such futine liabilitio .ne simply a son of mortgage standing a yearly charge against the reveiuies of die next 10, .:o, or 30 years. What is true of nninici[)al account of towns, townships, \-c.. is also true in regartl to the finaiKX's and assjis and li d):li'.ic.s of th ■ rrovinccs and the Dominion in regard to the producti\e and n(in-produiti\e expendiliue-. aiv.l of the [ireseiul\- i)ayable and future liabilities. 'l"he assets of a corporation, though v.iluable for use like the |)lant of a factory, are usually not saleable at thru- \aluation - thc\- are ready nominal assets- they are to be valued by their public utilit\-, and not b\- tlu.ir markrtabic \aliic — a city hall, a bridge, docks, i.\:c., wouki not generally sell for anyiliing like cost. Il is not these nominal assets that are to be counte.'|)arimenl. also from ih.' Public and Collegiate Institute lioartis the amount required by them. Tile i''in,i:iee Committee thro ;idds tog' ther all the estimates of the various committees, t(Jgetlier with its own, v.hii h will include interest, debentures, etc., that are usually called uncontrollable expenditure, and subtracting the estimated revenue froin the estiniatetl ex[)entliture. the balance will be die amount to lie raised by taxation. The school tax will be a separate le\y, but will be nuule at the same time as the other. The total am mnt of assessed value of pro[)erty will ln' dixided (k'ceminally into the amount o.' money to b'j r;iised to lind the r.iie of taxation. The total rate will be divitled into \arious smaller rates, sc> that the amount to be niised lor each particular purpose I'rom each ratepayer may be fountl by multiplying each, rate into his assessed valuation. — 294 — Estimate of Revenue and Expenditures for the year 1893. I'.i ri i; I' III I ! 1 1, 1. I s . i 11 Revenue. Rents ('emetery Licenses Waterworks Interest City Hall and Market Sewer connections ■Sundries Taxes SKMN) (N> ri(K) (K) 3«(M) (M) 107«() LV) 8!K) r)0 2r>2() 2.-) 671 (H) IITO (K) Expenditures. !?().S782 (X) Deficit from 1892 - Sinking F'unds Interest Debentures (Consolidated) County Rates Salaries Roads and Bridges Street Lighting - Water Works City Hall and Market Cemetery and Parks Benevolence River and Harbor Insurance ■Sewerage Election expenses Board of Health Contingencies 91360 00 28B2 00 5870 00 3400 00 9000 00 5000 00 1820 00 2000 00 60(K) 00 2350 00 2420 00 2000 00 8000 00 1560 00 2000 00 3890 00 2550 (H) 2700 (H) 8163782 00 Besides the above estimate of controllable and uncontrollable expenditure, there are levies of school moneys to make, and freciuently there are certain works that have been done for the citizens of a special street or district for which they have agreed to pay. A special levy would be made on these portions to meet their own debt. This is called the "Local Improvement System," and many extra advantages, such as pavements, sewers, etc., are obtained in this way and paid for by the parties benefitted. The amounts of the special levies are arranged when the work is done, hence these do not form part of the general estimates. The Accounts. It is not our purpose to present a series of books worked out in all their details, as that is perhaps unnecessary, we will give a short description of various accounts that are peculiar to municipal work, .ind we trust this will meet all the requirements. The City of Account. This account wo'ild correspond with the Capital Account in an ordinary business. On the credit side would be brought down from the former year the balance of assets over liabilities, if there were such. If the liiibilities ex- ceeded the assets the balance would be brought down on the Dr. side. The account that takes Uie place of Loss and (lain Account in ordinary books would close into this ac- count the same as in any ordinary business. Cash Account. This is really tlic account with the Treasurer. He is responsible for the balance on hand, as it rei)rescnts the amount of funds in his posicssion. Bank Accou7it. This account needs very little comment, as there is no new prin- ciple to be stated, only this, that there may be several Bank Accounts — one general, and one with e.ich Sinking Fund ; the former being a Current Account, and the others really Savings Bank Accounts accumulating interest. Jii'ul Estate Account. To this account would be charged all sums expended on city buildings, parks, market, etc., by way of permanent improvements that render tiiem more valuable, — 295 — Properiy Account. To this account may be charged all sums paid out for tools, machinery, apparatus, etc., also in case it was th.ou^iht dcsirnhle to hold as an asset some harbor works, docks, extensive bridges, and to be written off an equal sum during the estimated life of the several articles. This means is resorted to fre(iuently to prevent the liabilities showing larger than the assets. Taxes Acconnt, IS'JJ. This account would be debited for all the taxes for the year, including Dog Tax, Income Tax, Non-resident I, ami i'ax, Statute F.abor or Poll Tax, and the general tax on the assessed value of Real and Personal Property. At the same time the Collector would be debited for ail given him to collect. JOURNAL EN TRY. Collector Dr. .$ Non-resident Tax Account I )r. $ To Tax Account $ ■EXPLANATION. I'"or Dog Tax $ Income Tax $ Statute Labor Tax $ Tax per Assess- ment Roll $ In all $ The Non- resitlcnt Tax of .$ being collected by the Treasurer. The Tax Account for the year on the credit side will show total amount of taxes of all kinds. If some of the taxes were remitted for any cause, and the Collector authorized to leave them uncollected, an entry should be made to relieve him from them, and it should be charged to Tax Account, .so that this account may show the correct reveiuie of the year. Tax Account Dr. $i6o To Collector % i Go i''or'amount of J. Snn'th's tax on block destroyetl by fire remitted Octol)er 28, '92. A new account should be opened up for eacii year's taxes. An entry similar to the above would be made for all taxes returned by the C!ojlector as uncollectible. The account may be closed as hereafter described Tax Collectors Account. Krom the foregoing it will be noticed that the Col- lector is charged with all taxes except those of non-resident persons from whom he is not expected to collect. He is to be credited with (1) all sums paid to the Treasurer in cash, (2) all taxes remitted by resolution of the Council, and (3) all taxes that cannot be col- lected. The CJoUector sliould be retpiired to re])ort at least once a week and pay over all sums in his possession, and the roll should be returned l)\- a fixed tlale and entered up to his credit. It only leads to complications to allow one year's tax roll to drag into the next year. Every year should be kept sei)arate and s(|uared up in a business fashion. It is not an infrequent occurrence for a Collector to profit largely by retaining the use of a few thou- sands of dollars for quite a porti(jn of the year. His work therefore should be closely held in check by the Treasurer and other offuials. Non-Residetit Ta.v. This is usually jiaid to the Treasurer of a municipality by some agent, or sent him by m lil, and all such sums would be credited Ui Non-resident Tax Account instead of to the ("oUectnr. Jt'nta, Ceiti't:')'!/, Licenses, MarK-et, and all other accounts from which we de- rive revenue, would be crediteil with such sums as were [laid in, ami should there l)e any expense in connection with any of them, they would be debited with the payment of it, the balance of the account showing the net amount of revenue derived from such source. ii'i'i jliJ ■liii 2C)Cl 'lis' II' m It fy 'if f r 1 ert PFor/ifrtf/ y1(ro»7i^ There is really no Profit and Loss in Municipal Accounts. We will therefore take the title IVorkiin:^ Acx>iint m iis i)!ac.% as a more deseriptive title. Another title that would l)e equally appropriate, would he Ravnuc and Expenditure Ac- count. The accounts tliat do not represent assets would he closed into this account, as in other husinesses, the revenue coming; in on tiie Cr. side and the expenditure on the Dr. side. Accounts representing assets may he closed into tin's account for the amount of depreciation for tlie year. .Mi accounts of expenditures for honuses, etc., would close into Working .Vccount. If tiie Dr. side i-; the greater the account allows that the expen- ditures have exceeded tiie revenue, and the hulance would close into the City's Capital Account on the Dr. side to increase its net halance vS liahilities. Accoiinln iril/i I '(irioiis CoininiUccs. ICach conunitl'v has furnished an estimate of the amoimt it would .spend during the current year. 'i'his amount is levied for, and should he |)laced at their disposal. The amount spent l)\- each committee would be charged directly to that committee, so that their expenditures could he easily compared with their appropriation. If a inuniciiiality .vjuld desire their husiness conducted prop- erly, each committee should he kept rigidly within their appro[>riation, and nothing further granted except on some very urgent demand, and on the authority of the whole Council. OriUii'iri/ D.'J) 'nfiirr D.:ht Accoioil. Tiu debentures of a town are issued at different i)eriods, and sometimes an Act of the Legislature is procured consolidating all of these separate issues, and new di^hjntures are issued f)r the whole debt. If kept in sep- arate accounts, as Harbor Debenture Account, (1. T. Iv. bonus Debentures Account they would he kept in the same way as Consoliditecl Debentures would, and in the same way as described in connection with the lluilding and L'an .\ssociations on pages 265-6, and at the credit of Debenture . Vccount in the Ledger for the total amount. The account would he debited when any are redeemed. Local Iniprovciiifiif Si)i/,-iiif/ Fund No. 1. - Sfri'ti S''irc): When works of any kind are done on this Local Improvement plan, there is usually a frontage tax levied on the pro[)erty to raise the amount in the number of years designated by the engineer as the "life" of the work, say 20 years. I'hen it is necessar\- by law to [)rovide the yearly interest and such sum that being in\csted, and the interest capitalized, regularly each year at 5 per cent., will produce the amount of the principal. \\'liene\er interest is received on money thus invested, as Sinking Fimd, it is added to the Siiiking I'und by such an entry as — Cash Dr. To Sinking l''und. It is cus'omuy to invent such Sinking Funds separately, either in the bank or in ilehentures. and right at this point the .\uditor re- quires to exercise the greatest care, as some niunic'pilities invest in their own debentures, and Treasurers hive been known to sliow the debentures as \'ouche:s for the redemption of debenture debt, and likewise show ihem as in\i.stment . ol' Sinking' i-'unds, thus credit- ing cai^i twice for a single ]ia\ment. The account with the above Sinking Ltind is numbered 1 to iiidicate that a se[)arate Sinking Lund Account should be kept for each and every separate piece of work done on the Local Ini|)rovement [ilan. Loral Tinprovcniriit Drhi'iitidT.s. 'i'hese sh.ould be kept in a se|)arate account from the ordinary debenture debt of the town or city, as they are really the obligations of special parts of the municipality, and not a part of the general debt. The total credit balance of this account will show the bonds outstanding, and tlu' amount this balance exceeds the sum of the Local Improvement Sinking funds is the amount still to be raised for Local Improvement pur[)oses. — 207 — count )ns c/ credit ilance raised Cleihs, Trcdsinris. i;/nif ^Iccoinif. There is usually a little extra levied over and aliove the amounts asked for by connnitlees and thac may be required by sc)nie unfori-een cir- cumstance, and any extra expenditures not otherwise provided for, arc charged to this account. It closes into Workin- .\ritiunt. lioiiii.s ^Iccoiiitt. \\'hen a bonus is L,'i\eii to any concern it is a dire<'t [)aynient out, and no corresponding asset cnnie'' in placi.' of it It is simply a gift, and the account would close into Working .\ccount. Other ^h'coinils. 'Ihere are sinnhy otiur accounts that might be described, such as Public School himd, High School fund, I'.lection l",xi)enses, I'liel, etc., that really need no explanation, except th.it they are debited for the amount |)aid out on accoimt ( f them, and are closed iiUo Working .Xccount. Sinliinff Fuii(fs. In counnon piirlance we speak of //■'(!////x' the bonds of a nuini cipality, also of creating a "Sinking l-'imd.'' 'i'he Sinking Fund in time sinks the "obli gation to pay" out of sight in due time, livery nuniiciixdity borrowing money on debenture must pay off the interest e\ery year, and eitlu'r p.iy ;; debenture e'ach }ear, or invest such a sum that at the maturity of the deiientures there may be a sul'licieiit amount of these annual investments to jiay the debt ai its maturity. In any case the munici[)ality must raise the same amount each year during tlu' rurrenc\- of the loan, and either pay off the princi[)al \earl)- or invest a sinn yeiiiy to prmide for it. Such investments are called .Sinking l'"uiuls. .\ separate account wuuld be kept fur each Sinking I'und. Changing Books froni Single to Double Entry. If the books of a corporation are ke])t by Single I'.ntry the sooner they are changed to Double lintry the better for both the mum'cipality and the Ireasiu'er, and the i)roi)er time to do this is at the end of a fiscal year when the financial standing of the cor|)oration is shown by a statement of assets and li.ibilities. The change can be made in two ways : (ist) Hy opening ui) a nesv i '.t of accounts and journalizing all the assets and liabilities in the statement in the maniiet shown hereafter, and posting the entries to the new Ledger. The books are tlu n ready to proceed. (:;nd) by continuing the old books and opem'ng up an account corresponding in nature and use to the (,'aj)ital .Xccounl ; c;ill it "( lorixjration of City of —Account'' and enter up to the Dr. side the excess of the liabilities over the resources, or to the credit of the ac< oiint the amount that the assets exceed the liabilities. If the Ledger accounts agree with the Statemer.t of assets and liabilities and contain no unenumer.ited liability or asset, the books will be in balance. In the case oi the following statemL-nt the amount to lie entered up to the Dr. side of the "( 'or|)()ration of the City of Account"' would be .$12,^,015.00, to put the Ledger in ecpiilibriuni. This sum is exactly the amount that the liabilities exceed the assets in the statement. A trial balance should be taken, however, before proceeding. As an example of changing to Double Kntry and opening a new set of books we will give the Journal entries for a town of which the following is a statement of the assets and liabilitiies ; !!■: V «' III 1 1 if — 298 — Assets and Liabilities. For the CorpnrntUm of- A8SKTS. at Dro'inber Jlut, ISDS. LIAniLITIES. Cash in Hank, current accminl $^0,100 00 Debentures $287221 00 C.is]i in Trt'asnrcr '^ luuuls 454 00 Loans fur j^oncral purposes 10500 00 Sinkinfj 1 iind, invcstid >*>i>o3 (» Loans for Sewers 2150 00 I'ire l".n);inc, Hose, etc 5500 00 Collected fi>r Hoard of Kducation 12450 00 Cemetery Sooo 00 I'ara Kuliber Co. for I lose 900 co Real Kstale and Huililin^s 4(x~i(X) 00 Taxes of 1S92 uncollected 23000 00 Non-resident Taxes doo CO Water Works 7355*3 Co JofKNAI, I'^NTKV I'OK AssKIS. Molsons Bank, I )r. $30499 00 C'asli, ti 454 00 Sinking Kiind No. 1, Fire Brigade Appliance Cemetery, Real Estate, Tax Collector, Non-resident Taxes, Water Works, 190206 00 3 1 322 1 00 JOIKNAI. IvNTKV I OU Ll.Mill.n IK.S. Corporation of City of l)r.$3i322i 00 8603 00 5500 00 8000 00 40000 oc 23000 00 600 00 73550 00 To Corporation of City of 190206 00 Annual Statements To Debentures Payable, 287221 00 II Hills l'ayal)le, 12650 00 " Board of Education, 12450 00 II I'ara Ruljber Co., 900 00 A municipality l)eing a non-trading corporation no jirofit and loss statement would l)e made. A statement of Receipts ami iv\pendittircs of Casb should lie maile to show that money has been expended for proper i)urposes. A statement of Assets and l.iabili. ties should also be made to show tiie present standing of the corporation. It is now necessary to publish such statements for eleven and a half months, to show to the electors before election the greater part of tlie financial acts of the administration of the year, so that the electors by their votes may i)e al)le to show their appreciation or disapproval of the work of their representatives. Such statements of Receipts ami Ivxpenditures of (.'ash should be made out in detail, showing from whom money was received and to whom paid. 'J'his statement is really a a>/>v of the Cash Book. There is no need to give dcscrijjtions of these statements, as they have alre.tdy been fully dealt with in this work. Instalment Plan of Collection of Taxes. This plan of collecting taxes is one that though comparatively little known, receives the highest commendations wherever adopted. Usually taxes are payable at Nov. ist, but in towns and cities especially it is very difficult to collect ail at thisdate,and the muni- cipality has need of only |)art of the money until the next s])ring and summer, when most of the work on roads, bridges, etc., is done. Under the ordinajy system in many munici- palities the taxes arc allow ed to (.lr;ig along uncollected while money is being i)orrowed on interest, and there is in this way a direct loss. The plan is to make the taxes payable in three instalments, one third each on the first days of November, March and June. If not paid promptly on these dates charge interest on the delincjucnts at a high rate, and if the taxpayer chooses to pay all taxes on Nov. ist, a discount would be allowed on the second and third instalments. — 299 — Book-Keeping for Churches, Etc. The book-keeping of various churches will vary somewhat according to the methods of doing their l)usinc'ss. 'I'hcse variations will be caused principally by the different methods of raising or producing the revenue of the church, rather than by the modes of expending the money so gathered. Tor example, one congregation raises its funds methodically by what is known as the envelope system of weekly payments, another by renting the i)ews of the church, and still another by getting subscriptions from its mem- iiers yearly or when needed, and others supplement these methods very largely by all kinds of bazaars, socials, soirees, parties, tea fights, bun feeds, grab bags, and an innumer- able lot of clajvtrap performances from nigger shows up, all done in the name of the church, for the purjiose of extracting cash from members seemingly unwilling to bear their fair share of the expenses, and for the purpose of extracting money for the church from those who arc not under any moral obligation to give support. It is evident, by reports from all churches however, that the " cooking stove apostacy " is on the wane, and that before long the work of the church will be supported entirely by the voluntary con" trilmtions of its members given regularly. We will devote very little attention to the irregular nv:thods of raising church funds, and confine our attention chiefiy to the weekly contributio.i plan, and to a convenient method of keeping a record of pew rentals. Weekly Collection Register. The following register will commend itself to the Church Treasurer or Steward who lias charge of the finances 'vhere weekly contributions are made for church purposes. In many cluirches two could be used to advantage, one for the Minister's salary and one for contributions to liijuidate church debt. Each member should be assigned a number on this register, and a i)ackage of numbered envelopes given him for each fund, the number to correspond with his number on the register. A bright red line should separate the names and a blue line siiould be between the red ones to write on. In this way the eye will readily follow out the amounts belonging to a name without danger of crossing over to the one next to it, above or below. The address of the contributor should be given, ;is also his pew number, so that a quarterly or monthly statement of his contributions may lie given him. Tlie total contribution for each day is added up, and the amount should be entered in the Cash Book. If two funds are dealt with they should be kept in differ- L'ut parts of the book, or in different books. Each alternate leaf being short a whole year's transactions can be put down at one writing of the names in an opening of the book. On the right hand side the business of the year is summarized, ist, under arrears, giving what was unpaid the previous year, the arrears for each quarter and the amount due for this year to be taken on to next year. Then there is the total column, and the >unmiing up of this would give the entire contribution to the fund for the year, which should agree with the credit side of the account in the Ledger with the fund of which this book gives the detail. Cash Book for Churches, Associations, Etc. The following form of Cash Book on the debit side is suitable for a church that col- Icctst he bulk of its funds by voluntary subscriptions paid in envelopes weekly. There ars m.^ — 300 Weekly Contribution Book of the ll'' i M: it-: ■ m I my In' ■!!.'. i #1' I' # ili-' Z>r. Ikiikuaky, 7 I1421 28 10 15 15 75 75 5° 30 20 20 IS 2525 72 30 10 20 30 05 IS 95 25 75 30 05 MARdH. 6 132027 10 15 95 25 75 05 60 10 10 10 '5 95 50 75 20 1515 90 50 30 20 75 25 50 30 05 Cash Book oL -Church, Date. L. F. RfiCKII'TS. (Ienerai, Exi>'nsk a/c EVANGE- I.ISIIC. Dedt. Sundries. Jan. 3 II II II It It II II II 68 Collection, i)late, morning . . II It evening . . livangelistic Fund, Envelopes Debt Fund n Foreign Mission Fundu 3 75 2 80 31 50 6 40 4 50 3 10 i- 1: March. lo 15 95 50 75 So 20 27 10 10 15 15 90I75 25 50 30 05 20 20 Church, Sundries. 4 50 — 303 — Church for the year 1892. — Evangelistic Fmnd. • I- f I lil/U AlMtll,, May. Junk. 3]io'i7'24'3ii , 8;isj22 29:'s 12 ig'ael I I 1 AHKEAK.S. If: "', ■KjJ ii|imrl r i|Uiirt'r qimrlr 4ih lunrl'r 5S Total COD' trlbuted (luring yr. Ro marks X\JA. WAAW .._ . 1892. Cr. Date. L F. I'av.mknts. Expense Minister's Salary. Sundries. Jan. 4 II 1' II II 5 6 81 (las Bill for Dec, O. S. das Company, J. Lediard, on Salary .Vcct. Water Rates, pd R. Edgar ist (jrs rates Foreign Mission l''imd, sent to Secretary Collections to date, Printing Acct. Pd bill of N.C.C. Steam Press, 5 20 2 00 13 70 31 50 36 45 Jil — 300 Weekly Contribution Book of the £i 3 4 5 6 :? 8 Lewis Neclands S. J. Kennedy Jas. Smith Jennie \'oung R. Marshall Chas. Marshall Jennie Hall W. Ingrave a I- Jri.v. AlillKKSS. ! '' § AiMifsT. Skitkmiieu. •<• 3 io!i7lJ4 4« 10 63 '7 33 I 51 46 58 .i •S •3 .c 3'i 7 I4'2I 28 11I1825' I I W i • I il'il '■ ir Z?n Datk. Jan. 3 II M II II II II II II L.F. Cash Book of. Reck I ITS. 68 jiCollection, jilatc, morning . . M 11 evening . . Evangelistic Fund, Envelopes Debt Fund n Foreign Mission Fund n ("lENERAI, Exp'nsk a/c 3 75 2 8ar 1892.— Evangelistic Fmnd. OCTOIIE.-.. 2 9 162330 NOVRMIIEK, 13 20 72 Urckmiirk. II 'S'as! Ahkrakh. II , 1st i|uart'r iliiart'r i|U.'irt'i till • <|unrt'r 1 1 1 1 Total con' tribuleJ "ni (luring yr, r Uomarka H for the Month of January, 1892. Cr. Date. L F. 81 I'avmknts. EXPKNSE M>N'^^r"^H's Salary. Sundries. Jan. 4 M II II II ' 5 ,1 6 (las Bill for Doc, (). S. (las (loinpany, J. Lediard, on Salary Acct. Water Rates, pd R. Kdgar ist (jrs rates Foreign Mission ]''und, sent to Secretary Collections to date, Printing Acct. I'd bill of N.B.C. Steam Press, 5 20 2 00 13 70 31 so 36 45 - I' ,!i I 4 it ": ii _ 304 — several funds and each is maintained separately, uhilc all tlie cash is kipt hy one treasure and may he kept together, the acrounts with Iho various funds keei.inj; a strict a((.mnt with its own cash, while the Cash IJook keeps a record of the total on hand for all fun. I If rents of pews were a principal source of income a column would he so luailcil, and iln' cash entered from the I'ew Rent Reyisler. In case of a Vounj; Men's Christian Assod.i tion the columns would he headed to corresixmd with the sources of income, vi/., (i) Memhership Fees, {2) Cymnasium Fees, (3) Sul)hcri|)tioiis, (4) Sundries. The totals ..1 the columns would he posted as in the Cash Journal ; in fad, tlure is no reason wliy the church or Y. M. C. A. hooks might not he run on the Cash Journal i)lan altogellur without an ordinary Journal. The credit side of the Cash Mook has three columns. There nught he more if dc sirable. If there are many payments for any account make a column for it in the Ciih Book. It will be noticed that the transactions are not arranged according to Ledger titlis except the item in Sundries column, as this is the only colunni that is posted item hy item, the others being posted in totals. What is particularly necessary is to get tlu' amounts into the correct column. If there were freciuent payments for organist or jani tor's salary, or for Sunday School work, open a cohnnn for them so as to save posting. The Cash Book may be balanced once per month and tho totals posted. Pew Rent I^cg'ifcster, For the Ycav liiU2. EC o (/2 N.\MK. (leo. Smith . . . . Jno. Rutherford J. I). Stewart . . . Thos. Milton. . . A. L. Mclntyre. J. McLauchlan . II M Jas. Masson . . . . Rksidenck. 4 1 1 )case St ... . 84 Scrope St . . . 10 Mill Ro.ad . . 164 Division St.. 173 Terrace St. . 34 Murdock St.) II PI 11 J 68 Baker St ... . n "J . 03 ■r. 2 < if () 00 6 ooi 3 00 'i f) 00 00 75 9 00 3 O0|2 00 KENV I'Ain I'OR 1892. 3 3 c O ri 3 fO I SOI SOI 50 50 00 > 50 2 25 3 00 50 1 00 I 50 13 00 75 3 75 'n o I so^ 00 I soi'^ 00 7514 00 75|' 75 3 006 00 2 2S 2 2S 2 25'y 00 I I CO, 1 1 oo|s 00 "5 OS 00 00 Pew Rent Register. In many places it is the practice to establish the relation of landlord and tenant between the church and its members, adherents, frecjuentcrs, etc. It has, we presume, the advantage of extracting from parsimonious individuals what should be given by them as a free-will cjflering out of a fund that the A|)ostle I'aul would have every Christian create, by laying iaside a sum weekly on the first day of the week as the Lord had prospered him. See I Cor. 16, 2. When this pew rental plan obtains in a congregation a I'ew Rent Register similar to the above should be procured to save time and work by the Treasurer — 305 — anc Ircasuiii trict accdiiiu for all fuiiiU ilcil, and ik' tian Associa iiic, \i/:, ( I ) riic totals ,,| reason why an altogcllur ic more il ilc t in tiic Ca-li ) I.c'dnfrtitks )stt.'d item liy s to get tilt' ;anist or jaiii save posting;. 2. CO 1 ;a "r: ■r. J u rt ' 3 il *± u ■ k. 1- H ^ ;o6 oo 50 6 00 ?5'4 00 ?3 1 75 2 00 D0() 00 15 () 00 30 5 00 |l and tenant I presume, the Iby thern as a Jstian create, lospered him. la I'ew Rent Ihe Treasure! in keeping accoinits. It saves keeping a Ledger account with every pew holder, an allied on page 2i).\. The amount that the credit side exceeds the dehit side of this aceo...U will he the net worth of the church over its li.ihiiilies. Tin- "Working Accoiihi" that takes the |)lace of Loss and Ci.iin .Vccoiint wniild close inl (I It. If several funds, such as lA'aiv.'elistie l-'imd, Deht I'und, ilc, are kept separate so as to show the h.dance on hand in each one of them, tlii-. ac< omit will not show the entire worth of the church, as at each account of this kind is carried a eretlil or debit balance, ami li is really a Capita' Account. n'o/'Av/f/y . I ccoKu/— The Church is a iion trading Institution, and therefo'-e the name Loss and (l.iin is an in.'.pjirjpriate title for the ac<'ount, into which all, or many of the ex|)enditiues and receijits of re\einte close it is therefore called Working .\ecouiit, and is closed into Church (."apital .\ccount in 'the s.iine way as Loss and (lain is closed into Proprietors' Account. I'JrdiiiJclistic Fund AcrounI All contributions, from whatever source, that are intended for the preacher's salary, for the payment of evangelists for s[)ccial meetings, and for anything in the line of [)re,u:hing or spreading the (ios|>el. All such sums would be entered in the e\angelisiic column in the Cash-Iiook, and posted to the cretlil of this account. If the Church has adopted the system uic and orderly way of weekl)' contribu- tions in envelo[)es, the sum total ol th.; colunui in the coIKm tion register, page 300, will be enteretl weekly in the Cash-lJook, aiul thence erediteil to this account. .Ml subscri[)tions, donations, spjcial collections, etc., received for this [)urpose, would come in through this same column in the Cash-Hook to the credit of this account. The payments made to the preacher would be charged to him. .\11 sums paid for other evangelistic work W(nild be charged directly to this acccnmt, and the preacher's salary wouki be closed into this account at the end of the year. If all sums receiveil for evangelistic purposes had been expended t!io account would balance. If some remained on hand the ( redit side of this account would be the greater, and if all had been expended and some other fund drawn on and more paid out on evangelistic account than had been received in, the debit side would exceed the credit side by just this amount. Tiie bal.uice of this account would be carried on from year to year. It is of the same nature as a Ca[)ital .\ccoiint. If at any time it were thought proper to take some money iieriuanently from another fuiul and put it into this fund -suppose .$100 were to be transferretl from general exi)ensc fund to this one, then a journal entry would be made as follows : — Ceneral E.xpen.se Fund Dr. $100 To Evangelistic Fund $ 1 00 w ,*. I — 30^' — Dchf Fmid Aci-ouiif — Unfoituiuitciy a lari^o majority df the cluirclies have a huge .ncul)us, known as a cluncli detil, to l^arrass and oncunil)cr thcni, even tlu)Ui,di one of the apostles exhorted to owe no man anythin;.; hiil low. If ihe weekly contribution by envelopes were applied to the debt, it would soon disappear. A part of the weekly con- tribution register could be used for pledges payable weekly, just in the same way as for Evangelistic Fund, 'I'liis account is kepi in precisely the same manner as the Kvangeh's- tic l'"unility, while the Evangelistic Account payments are used to licpiidate current expenses for preaching, i\:c. Ft>rei(in Mission FKiuf and all other UmuIs of a like nature, may be treated just as the I'A-angelistic and Debts I'unds are, vi/., credit the account with all money received, and debit it when monev is remitted to the .Secretary of the Society. Proceeds of socials, bun feeds, etc., may be credited to the fund they were gotten uj) in aid of, or an account may be kept for each one, or each kind, or each series, and the account closed into other funds, or closed into Wo'king Aecount, as seenieth best to the Treasurer. OUicr micron itt.s — In Real Estate Account we would [lut the building and lot. In I'urniture and fixtures .\ccount we would put all pews, furniture, lamps and lighting appliances, carpets, etc. The org.m also is charged to tliis a( count i^ometimes. Church J'late .\ccount takes charge of comnmiron plale, and m sonic cases collection plates, &c. Library .\ccouiU, the library. iV"., \c. Annual Statements, Etc. The Church, tlie \'. M. C. A., and oiher associations of like nature are not trading corporations, therefore, like municipal corjioraiions there is no account taken of Profits and Losses. The statements of Receipts and Disliursements of cash, and the Assets and Liabilities are the statements that should he made. This should be done once a year, and printed and sent to the members, '{'here shoui be a general meeting at least once in three months at which a ([uarterly statenuiu could be read and the church in this way kept informed of the standing of its affairs. Keeping in touch with the members or con- tributors by freciuent statemeiUs to them of the finances ami needs of the church, or guild or association, is one of the greatest elements (if success in the financing for churches, or benevolent and eleemosynary corporations. It is unnecessary to again describe the statements mentioned above. On pages 169 to 170 and 239 and 240 there are sufficient examples a. id descriptive matter to enable any person to understand what is necessary in ihi^ connection. ;: I i:;t 307 — : a huge c of the Lition by kly con- ly as for vangelis- tly or by on hand e church I Journal It for the Suppose s case the while the ling, iVc. catcd just ,• received, of socials, in account into other and lot. d lighting (]hurch ales, &c. ol trading of Trofits sscts and ce a year, cast once n this way rs or con- , or guild urches, or pages 169 nable any Changing Church Books to Double Entry. A\'hen wc remember that the "Church Capital Account" takes the place of the pro- prietor's capital account in the siugle proprietorship there is no trouble. The ordinary change from Single to Double Entry may be described as three steps, viz.: ( 1 ) Make a Statement of Resources and Liabilities to fmd the net worth and the increase or decrease of capital since the previous balance. (2) Open accounts in the Ledger for all Resources and Liabilities in the statement, and not already in the Ledger ; enter the Resources on the debit side and the Liabilities on the credit side. (3) Enter up any decrease of capital to the Dr. side of Church Capital Account, or should there be an increase of capital enter on the Cr. side so that the Capital Account svill agree with the statement and the books are in balance. The above will continu'.' the old books. If a new set is to be opened make a state- ment of Resources and Liabilities, journalize the statement as indicated on page 298, simply substituting Church Capital Account for the city's capital account. Warehousing of Grain, Etc. Warehouses are of two kinds, (i) Public, where goods or grains arc stored for others than the owner of the warehouse, and the warehouse man grants a warehouse receipt fof the commodities stored, these warehouse Receipts being frequently used in the banks as collateral security. (2) Where thi^ owner of the warehouse uses it for the storage of his own grain or goods. In the public warehouse business, it is not a ([ueslion of values that concerns us but it is a question of (juantiti^'s, so in the public warehouse we would keep account of the number of bushels of each kind and grade of grain received, and the num- ber of the \^'arehouse Receipt representing it. The grain is released on the return of the Warehouse Receipt to the warehouse man, who issues a Delivery Order. This order is given o the men who load the grain or draw it away. Post directly to the Ledger from boti the Warehouse Receipt Book and the Delivery Order Hook. No. I. (STUB.) I (WAREHOUSE RECEIPT.) OwKN Sound, May 23, 1892. May 23, '92. .-^ ^ Received from Robert (J^ Sword 2 000 Bush. White "n Received from Robert Sword in good condition for Winter Wheat, No. i. ^ storage. Two Thousand Bushels White Winter Wheat No. POSTING ^ '' delivera!)le to him or his order on the surrender of this DebitNo.iW.Wheatfolio64l Receipt. Credit Robt. Sword, » 98 (S) r R. & A. THOMSON. — 308 — When grain is withdrawn the Warehouse Receipt is returned and a Delivery Order is issued to the owner of the grain in its place. This order is sent with the men that load or team away the stuff, and is returned to the warehouseman who issued it. The following is a form. From one hundred to a thousand of such forms would be bound together in a book. ■' 2 i! 1i> ( STUB.) i JVo. r. Date, 1 0/6/92, ^ Name, Robert Sword. 2,000 Bushels W. Winter |i Wheat, per Warehouse Re- 1, ceipt No. I. ( DELIVERY ORDER.) ^ No. I. OwKN Sound, June 10, 1892. Please deliver to Robert Sword or his order, Two Thousand Bushels of No. 1 White Winter Wheat, for which -PCSTINO vt Warehouse Receipt No. i has been Surrendered. Debit RoSt. Sword, folio 98 i Cr.W.W.WhealNo.i m 64^ R. & A. THOMSON. WHITE WINTER WHEAT ACCOUNT. May 23 92 M 24 II ro Robt. Sword W. Struthers R.NO 2000 1500 June 10. 1892. By R. Sword D. ORDER NO. JOOO ROBERT SWORD. Jun 10,92 W. W. Wheat, D. O. 2C00 May 23, 1892. ByW.W. Wheat R.NO 2000 From the foregoing it will be seen ^hat \\\t books can be kept by Double Entry, and a Trial Balance taken of bushels as well as dollars. If the warehouse is a private one keep accounts in both bushels and dollars in a double ruled Ledger as illustrated on page 219. — 309 XT n in c 3 o a* O^ •1 Q n S rr A 3,9- ft) re 1 P r? 1- Li P -I 3 re H 3- hH "1 0^ rr 3 re x' -1 O 3 O «=) 3" 3 P re c n. 5" y 3 r* re 3 H CL 3- re u- 3 o o c re' p B. 3 3 3" n 3- p 3- re re 2 5". en c 3=! re :/; r.^ 1-^ 3- re re c 3- re en' cr IT 3- re ^ S > -1 3 5' O n c 5' tn 3 p CL P en «; re R ^ ^TT* w ft a- P re re re u o •-) 3- re O c o R r re tn a -*> W 3 o •-1 n IT ►a 3 3" a 3 3' 3 XT. in 3" n p_ re O cr O) o o 3 a J- re n -1 a. re v: n 3- c a- cr re p c re a. •-t <^ 0' re tn ■-1 re a- p 3 a. re a re •-1 re o O ►n re J^ •ji c p re re n i=^ 5! 3- p 3 CL 3" 3" rr o 3" n 3 cr; re cr re 1 "5- re p c re en c o 3" 3; cr 51 ft! re re re en P ?! cr re c .'^ 3- re 7T P r-i tn o n> 3 a 3- p re 3 p ?r *7) 3- re re 3 U: 3 p re re r, 3 f.l X"< M ti V,- p n n 5. 1 — • 8 re cr 0- re p u in c 3" ■—1 3 3" 3" 3 re re re o T3 P 2 g- p ^ &■ re CL 3 O re 3 "a cr n H fD orq V3 rt- ro Dale St. T. Hay Bay St. W. Stone NAME AND. ADDRESS. 73 cj -< 50 II JO re ^ ? II cr - II <^ M II --: OJ i <; .;* II < e^ i li < II < ^4 II < CO II < vO II <-; II Q^ < ,^ IJ ■«> II <: ;: ! Oi II -^ .^' II t/1 1 < a> II 1 II cc i vS II II M 'j to i; 10 4- II 1 ><> 11 a, ^ 1 o\ 1! 1 ^ . II 1 1 M 1 CC 1 II 1 1 vO II 1 1 ^ 1 B Ul 4- II ON No. Vifils. 4>' II No. paiil. M 1 %^ Total Dr. Kl 1.;:^ \ Cash Rec. 1 II ^^ Othtr Cr. 1 II e^; ■«» 1 1 Balance. j ■ ^. ?; re tn o o CO* CD O —i O CD :^ CD C3 CD ►—1 • 'TIS 3 :? en V5 P -• 3 3 CL „ 3* 1 1 3- re re re Lf. -3 8 3 ?r 3 re re -"■ 1^ l-^ s ° 1 3 re :3 -I 3 re re cn 2 "> ~ re "^ ■^^ ?^ =i O ^ U: ^ 3 :? 3- — , P " ° re P ^ en •^ ^ 'Q ?E' n> re 302 re 3- O en' O re 5^ E. o^ •-1 -I n _ -• re re <■' § a ■< 3 re 3 3 re re' Bl 3 o re re o a S. ^r aa. a V- 3^ re re w S' 3 3-' P jn ^ li ^ ft re o q E. 5' ^ 3 cr. 3 c P re "^ 3 ?r •''I CO CD 2. o o CO o •-3 CD O go S — ilQ — Physician's Annual Ledger for the year 1892. Name and Adurkss. Remarks. Bal. from last year. B n <—> rt 1 < i Z3 a. u 1> 12; u "rt e2 M>2 J. W. Smith, 25 Scrope St. James Richer, 1 1 Baker St. Dr. Laborer, Cr. Dr. Grocer. Cr. $ 6 00 $ 38 $ $ — $ 44 $ $. 2 00 23 10 5 3 — = = — 2 00 41 3 00 2 00 The Physician's Ledger. The foregoing form of Annual Ledger has been devised for the convenience of medical men. They can keep 'n this book in very small space : (i) The accounts with all their patients by posting monthly from the Register of Visits, etc., both of services rendered and payments made thereon. (2) They have a record of all arrearages due them from past years by adding up the columns of arrearages. (3) They can find out the annual value of their practice by adding up the total Dr. column. If it is desirable to apply Double Entry, open an account to which the totals of the debits and credits of the Register of Visits may be posted monthly. This should be an ordinary Ledger and there should be a Cash ]5ook and Journal as well, so that pay- ments of money, investments, expenses, etc., may be properly recorded. Open an account with "Professional Services," to which all services charged to patients may be credited from the column headed "Total Dr." in the Register of Visits, etc. If payment of any of such services are afterwards remitted, the "Professional Services" account would be de- bited. AH other accounts such as "Stable Account," "Expense Account," would be kept in the general Ledger and the annual Ledger kept for personal accounts with patients. Books specially ruled containing Register of Visits, Ledger, and Record of Obstetric Cases, may be obtained from tlie author, in both otilice and pocket size. I, r m — 311 - Partnerships. A work of this kind would not be complete rtithout a discussion of Partnerships, the general principles and laws governing their formation, capital, liabilities, and division of profits. We propose to dcil with this subject in two departments, (i) the general prin- ciples and laws governing thtm, and (2) niethods of dividing profits, making settlements for them, including a great variety of practical problems. For a further consideration of the legal aspect and the form; of contract, and of certificates for registration, &c., see chapters on Partnerships in "The Laws of Business," by the author of this work. Dpfinition — Partnership is a voluntary contract between two or more persons to contribute their property, labor, skill, knowledge or credit, or some or all of them, into some lawful business enterprise for the purpose of making profit and to divide any profit or bear any loss they may make in course of the business in such proportions as has been agreed upon. A Partnership is also known as a Co-partnership, a Firm, a House, a Com- pany, these several names are synonymous and refer to the Partnership collectively. When the persons composing the partnership are referred to individually each one is called a Partner. Cominiinitij of Profit —The central idea in all partnerships is to make profit, and the test of any partnership is "a com'/iiinity of pro/it," that is, all the profits made by the firm go into one common fund, and are divided after the losses have been deducted. In case it is desirable to prove the existence of a partnership at law, all that is necessary is to show that there is a community of profit, that is, a common profit fund for the parties concerned. IF.V) May he a Pdrtncr — .\ny person capable of doing business, that is, any person of age and able to make ordinary contracts. Accoiding to the nature of their agreemjnts partners may bo divided into (i) (leneral partners, (2) Silent partners, (3) Lim- ited partners, (4) Nominal partners. A General Partni'r, sometimes called an ostensible partner, is one that is known to the public as a partner, (i) He generally appears at the place of business and takes an active interest in the conduct of its affairs. (2) He is represented in the firm name either by having his name appear in it, or ijy the term "Co." (company.) A Silent Partner, sometimes called a s'eepins or dormant partner, is one who contributes capital, and has an interest in the business, (i) He is not known to the pub- lic generally as a [jartner. (2) He does not take any active interest in the affairs of the firm. If you wanted to do business with the firm you would not find him in the office to attend to your wants. (3) He is not represented in the firm name by anything more definite than Co. (company.) A Lunttcd Partner, sometimes called a special partner, is n ^/Ve;«/ partner, who, at the making of the partnership contract, stipulates that he will not agree to be lial)le for losses beyond a certain amount. This sum must not be loss than his capital invested. It should be noticed in this connection, (i) That a general partner cannot limit his liabiL ity to a fixed sum, because he has the working of the business and knows all about it, and might take this way of defrauding creditors. (2) That any agreement as to limited liability must be in the articles of agreement when the partnership is formed. iL f..- E 'I — 312 — ^ Nominal Partnvr is one who has no interest in the business, but who lends his nam2 and credit to thi business. He may sometimes be liable for the firm debts, though he gets no profit. Example— Jones is a member of the firm of Jones & Brown. He sells his interest in the business to Smith, but allows his name to remain m the firm name, so as not to make known to the public generally that the popular and wealthy Mr. Jones has severed his connection with the firm. Jones is held out to the public as a partner. Any person giving credit to the firm in good faith, believing Jones to be a part- ner, can hold him responsible for the debt in case of failure to pay by the firm. How Formed — Partnership contracts are formed as all other contracts — by agree- ment oi i\\c parties. It may lie in express words, or by persons simply engaging in business together without any definite stipulations. The agreement is therefore either, (i) Implied, or (2) Express, and tiie express agreements are either {a) Oral contract, (p) Written simple contract, {c) Written sealed ontract. Partner by Iviplication~lt was mentiuncd in a jireceding section that sharing in a common profit fund is the primary element of a partnership. If persons do business together without any agreement, they may be proved partners. A, in Ontario, might buy horses and ship to 15, in Winnipeg ; ]> sells the horses---they divide the profit made in the transactions —they are partners by implication. Partners hij Oral Contract — Many partnerships are formed by the parties sim- ply meeting and agreeing among themselves — the terms are not always stipulated in full. Such contracts are not desirable, as many disputes arise out of an imperfect understand- ing of the terms of the contract. Oral contracts should not be depended on when the business of the firm is of any consequence, and beside?. Oral C!ontracts under the Statute of Frauds, are only good for one year. Partners hij Written Contract — ^Vhen any large amount is involved, the articles of agreement should always be in writing. A seal added to make it a specialty contract makes it better and more binding. Such written agreements are called "Partner- ship Contracts," "Articles of Partnership," "Partnership Deeds, &c. They should contain (i) The description of the i)arties and firm name. (2) The nature of the business and the place where it is to be carried on — this is called the undertaking. (3) The investment of each partner and the mode of division of profits and losses. (4) The date of commencement and duration of the partnership. (5) Limitations of powers of part- ners and their duties to one another. (6) Provisions for keeping accounts and settlement of partnership affairs. (7) Provisions for dissol'ilion and final ndjustnii:nt of partnership afiiiirs. (8) Provisions for settlement in case of death of a partner. (9) It is very proper to make provision for the signing of the firm name, who shall do it and who shall not. (10) It is very proper to include a ; revision binding all partners not to indorse paper for any other firms personally, or become surety or hail for any one without consent of the others, as a sudden withdrawal of a partner's interest might cause the firm to collapse if it occurred at a critical period. The ten foregoing items are in ordinary partnership contracts. There are printed blank forms purcliasable at almost any place. There are two additional provisions that we de.sire to draw special attention to. (i) There is usually a stipulation providing for the right of the p.artr.c!S or their /(;^^/ ;-(yinw«/(7//m to examine the books, The legal — 313 — ntcd that for legal representative has been held to mean heirs and executors after the partner's death, and in case a partner wished to bring an accountant to examine the l)ooks, he could be prevented from doing so. It should be very clearly expressed that a partner may examine the books either personally or by his agent i^r attorney, {z) The second provision that needs atten- tion is that in case of disa!)!reements or dissatisfaction the partnership could be dissolved by either party giving the other certain notice, and that the party giving such notice, would either buy or sell out at an arbitrated or an agreed figure. Regiatration of A grccinent— It is not sufficient to draw up a partnership deed to comply with the laws of Ontario, and almost all Canadian Provinces and American States. It is necessary to register a declaration of the formation of such partnership, so that a person who desires to do business with such partnership may be able to fnid out readily and surely who are to be financially responsible to him for contracts he may make- It is also necessary to be able to know the meml)crs of a firm in case a suit at law is to be brought against them. The revised Statutes of Ontario, Cap. 130, provides : — (i) That a declaration settmg forth the names of all the partners, the firm-name, etc., be registered m the County Registry OtTfice where the firm business is to be carried on. (2) That any individual who wishes to add " ^: Co." to his name, or to use any special name other than his own, must register a declaration to this effect. (3) Such registration must be made within six months after the formation of the partnership. (4) In case of neglect to register a declaration of partnership, the firm may, by Ontario Statute, be fined one hundred dollars. One half of the fines go to the Crown and the other half to the informant. Contribution of Capital — Each partner contributes in some way to the capital or maintenance of the firm. He may contribute, (i) A capital of cash, real estate, or personal property. (2) A secret of some process of manufacture, patent right, or some- thing of use to the firm. (3) Labor, or skill, or in work, or experience, knowledge and time, &c., in management. (4) (Jood-will of an established business. (5) Credit — the use of his name in indorsements, i\:o., for the lirm. A partner may contribute any one or all of the foregomg to the partnership, and draw the i)rofits on account of the benefits the firm derives from him. Division of Profits— VroCns are frequently divided, (i) According to a fixed pro- portion, say one-third to each partner, or a half to one, a third to another, and a sixth to the third. (2) According to capital invested in the business. (3) Uy allowing each a salary, and dividing profits remaitiing accordmg to a fixed proportion, or according to aipilal invested. (4) Hy giving each partner interest on his capital, and dividing the remainder according to some fixed proportion. (5) IJy a salary to each for services, in- terest to each on capital invesied, and reiiiainder to be divided according to some fixed proportion, say etibally, or Iwo-ihirds to one and a third to the other. In many firms it is necessary to adopt the fifth method or a three fold division that gives, {) Pay for capital inves'.ed. (c) A general sharing up of the remaining profits to every member of the firm, whether active, sile:;t, or limited partner, — 3«4 — ''1 Salary Tiased on Profitu — In many firms it is customary to give a chief clerk a percentage of the net profits of the firm as salary, such salary operating to make the em- ployee more faithful and dilligent in pushing business, and careful as to expenses. This is the only case where a person may share profit without being liable as a partner. There must be a difinite contract to this effect in order that such employee may be free from liability for the firm's debts. U'vnership of Invested Capital — As soon as property of a partner is invested in a partnership, it becomei the joint property of all the partners. This is always the case where all have contributed ; however in case one contributes capital, and another skill or labor only, and takes his profit yearly, he does not accpiire any ownership in the property of his partners. Poioers of Partners— E:ich general partner, unless prohibited in the articles of partnership, is the general agent of the firm, and it is within his power to act for the firm, (i) He may bind the firm in all matters that come within the limits of the undertaking of the firm. For example : A firm is in the grocery business — a member of the firm could properly bind the firm in such transactions as properly belong to the grocery business — he could not in the real estate or hardware business. (2) He may receive payments of debts due the firm, or compromise them, or represent the firm in a suit at law. (3) He may make, sign, and accept negotiable paper for the firm in the regular course of its bus- iness. (4) He may borrow money necessary for the carrying on of the firm's trade. Acts a Partner Must Mot Do—[i) (lenerally spsaking hs must not do anything contrary to the agreements in the articles of co-partnership, nor do anything prejudicial to the best interests of the firm for his own personal advantage. (2) He must not use the property of the firm for his own use. (3) He must not use the credit of the firm for his own personal benefit. (4) He cannot bind the firm by giving the firm'i note in payment of his personal dei)t. If one partner sued the firm, he would in reality be suing himself, as the firm does not exist without him. Should he bring an action against one of the partners, it wauid hive the effect of dissolving tiic p.irtnership. The consent of the firm to any of the foregoing prohibitions, makes the act the act of the firm, and not of the individuxl. Partners miy make such agreements among themselves as they see proper, and all of them are bound by such agreements as am.)nj t'leaiielves. These a^i^reements cannot be imposed on outside parties. Liabilities in Case of Insolcoicy— In case a partnership becomes insolvent, the entire partnership property would be taken first to sAti->fy the firm's debts. If a portion of the debts remained unsatisfied, the private properly of the partners th.it they had not put into the concern, would, sui)ject to priority of the partner's private creditors, be taken until the debts were fully satisfied, in case enough could le found to satisfy them. The only exception to this is in the case of a limited or sjjccial pirtner — h's liability is not greater than the capital invested. In case he had withdrawn part of his capital, he would be liable for the amount withdrawn. Dissolution bij E.vpiration of Time — The majority of i>artnerships are made for a definite length of time — one year, two years, five years, etc. Immediately upon the completion of the time, the concern is dissolved. It may, however, continue by a new agreement. If no stated period is mentioned in the written agreement, the partners may — 3«S — have an agreement among themselves as to the lime the contract is to end. It is well to have a provision in the partnership contract providing how a partnership for unlimited time may be teiniinatud, as under this class of agreement all partners must be agreeable to dissululion, unless this agreement contains such provisions. Dinsolntioii on Completion of Worlc—]i is not uncommon for persons to be. come partners for one simple contract. A. & B, might become partners to build six miles of railroad. M the completion ol the work the partnership would be dissolved^ because the pur[)ose for which it was formed was accomplished, though they may not specify agreement terminating the contract. A dis.solution, on completion of the work, is implied. Dia.solntion by Mutuid Conncnt — This is the common method of ending a part- nership contract. The partners entered into the [i trtnership contract of their own free will and accord for their mutual benefit, and they can, by another new agreement, just as freely cancel the old contract and be separated It must be with the consent of all the parties, and if die parinersiiip contract is under seal, the agreement for dissolution should also be under seal. t Dissofutioi) by Stib; of Partner's Inferent—A partner may with the consen of his associate partners, sell his interest or share in the business. It would not be proper for him to be able to sell without consent, as he might put a partner in his place who would not be agreeable or congenial to the remaining partners. Just as soon as a partner sells his interest, the agreement is voided —the new man cannot simply take his place. There must \)v a new .agreement between the old remaining partners and the new one, which ni.M:n now articles of partnership. The new agreement may be in identical terms with the old. It is however new because of the new partner. Dissolution 1)1/ Dcdth or rncapacity of Partners — \ partner dies, there is no agreement between his heirs and the remaining partners, and the partnership is dissolved. ]5y a new agreement one or more of the personal re|)resentatives of the decea.sed partner may take his [ilace, hut it is a new i)artnership by a new contract. The same is true in case of. insanity, etc., of a partner. Dissolution bij Bankruptey of a Partner — When a partner in a firm becomes bankrupt personally, the partnership is dissolved, his share in the business pa.sses to his creditors, antl they of course are not partners. Dissolution by Dacrec of the Court — If partners are continually quarrelling or dis.agreeing and pulling in different directions, and they cannot .agree to dissolve, applica- tion may be made to a competent court, and an order obtained dissolving it. The following are common grounds for granting an order of dissolution: (i) Improper or fraudulent conduct by a partner. (2) Violation of articles of partnership. (3) Exclu.sion of partner from sharing in the carrying on of the business. (4) Continued quarrelling so as to render it impossible to carry on properly the business of the firm. (5) Inability of partner to act on account of permanent illness, or by being dis.abled. (6) Intemper- ance, imuioratity or dissi[)ation of a partner that will tend to impair the credit or business of the firm. I ' iSjl _3i6 — Divlniim. of Assets In rase of dissolution tlic l)iisincss is very frequently carried on by a new p.irliieishii) foiiiu'tl from t!; • rcinainini^ p:irt of the firm, or j)erhaps a new partner may he taken in, in place of tlvj retiring one. In such a ease, a part of the assets of the firm, such as cash, i)ills reeeivahle, real estate, etc., are handed to the retiring partner as hi^^ portion, or noti/s are given hy the new partnership to the retiring partner for his interest. If a new partner takes the place of an old one, he fretpientiy pays him a sum and takjs his place. In some cases the liabilities (jf the (irm are [)aid off, and the remaining assets divided among the i)anni.rs. .Sometimes these are all converted into cash before a tli\is''in is made. Lhtbillliis of Rftivinij Portlier .\ partner retiring from a firm is jjcrsonally liable to oiitsid.' p.irties for all the ilebts contracted while he was in the firm. Oedit was given the firm partly on the stren;.;th of his name, and he continues to be liable until the debt is paid, unless the creditor agrees tj accept the new firm for the debt, thus discharg- ing the one retiring. Adrrrtisiiuj DissoJntioii. — When a partner retires from a firm it is customary to give public n.)tice by advertisement in the \oc:x\ pipers, and by sending a circular letter announcing the dissolution to all persons who give credit to the firm. If Uiis is not done, any [ijrson giving the firm credit, not knowing of such dissolution, may hold the retired partner liable for debts contracted by the new firm, they, not knowing of the dis- solution, may have given credit to the film in good faith on the standing of the very partner tliat claims to have retired. . Rerjistrdtion of N'otice of Dissolution— In Ontario not only must the firm reg- ister the .\rticles of Partnership in the County Registry Office, but a retiring partner must also register a djclaration of dissolution of partnership if he wishes to free himself from being responsible for the debts that the firm continuing the business may contract after he leaves them. Poller of Porliiers after Pissolii//on~l( the partnership is dissolved, and the business is to be wound up, a partner may demand that [)artne^-.ihip as.scts be first used to pay off all liabilities before any is apiiroi-riated by [)artners. If the assets are vested in any one party as trustee for the others, that trustee has no power to go on with new business, but on'y to do sui'h liusiness as is recjuired to wind up the affairs of the dis" solved firm. Partnership Settlements. The [iroblems following hereafter are given for practice in settling between partners, some at the end of an ordinary business year and others at a winding up or dissolution of partnershii). The m.ijonty of these problems have been actual settlements made by the author for business men of his acquaintance and are therefore eminently practical. There are thousands of persons w ho can keep books satisfactorily but the number who can make a pro[)er settlement at die close of a term of business is very small. Such ser- vices are very valuable. In making a settlement the first thing to be inciuired into is the contract between the i)artners, including all ttrins and conditions of it, second the actual state of the finances of the firm, ajid tiurd whether it is an annual division of profit or a dissolution settlement. — 3'7 — There will l)c very little trouble in making; sctt'emcnts between i)artncrs if the prin- ciples observed in making llalance Sheets are followed. (i) 'I'hat thenretieally the assets iiie always e(iual to the lial ilitiis: (_>) that all assets be- lonj; to the creditors of which there are two kinds ; (a) ordinary crcilitors for the amounts due persons on Ledger Accounts and on commercird pa[)er, mortgages etc.; (b) pro- prietory creditors, either sole proprietors or partners to whom the capital and profits are due in case of dissolution. The following are a few propositions that may be profitably studied in this connection. (i) Assets = Ordinary liabilities -|- Proprietory liabilities (2) Assets - Ordinary liabilities - Net worth of firm. (3) Assets - Net worth of firm =-- Liabilities. If the profits are uu(lividv(J, In this rase the amount of capital withdrawn by partners must be considered an asset of the company- a debt due the company in (oiv,- puting profits for division. (4) Assets = Ordinary libilities -f- Worth of firm last balance + Net prtifit. (5) Assets - Ordinary liabilities = Present worth of firm ^ Worth at last balance -f Profit since that time. (6) Present worth of firm - Worth at former [)eriod = Net gain for the term of business. {7) Worth at former settlement - Present worth -^ Net loss. If gains are to be apportioned according to capital invested the division maybe made by any one of three methods, (i) I5y finding the rate i)er cent, that the jirofits are of the total capital, and multi[)lying each man's cajiital by such rate. (2) l)y the frac- tional or unitary method so well known by modern mathemcticians. (3) P.y proportion or rule of three as it is sometimes called. If capital is in for irregular or short times and the division is to l)e made accord- ing to the average investment, that is, each investment of ca[)ital or withdrawal of capital may be multiplied by the days or months [ox which it was invested or wiilulrawn, then the sum of the investment [jroducts less the sum of the withdrawal products would leave the net average capital of the partner fiir a day if tlie multipliers were da\s and fiir a month if the multipliers were months. When each partner's capital is found for a day or month the profit may be divided by either of the three methods indicated above. In working partnership problems it is always better to open u[) a form of Ledger Account with each partner and with Assets and Liabilities or losses and (lains whichever is (fiven in the problem. Problems in Partnerships. 1. Smith & lirown arc p.irtnora investing §«")()() und $54r)t» respectively. At the end of a yciir they h ive Cii3h on liand .S.S.'iO, iMoichanili io yjcr Inventory i!)(iK), l>ill.^ Kecei\aljle $1.'{(», J'trsdiiiil Accounts Receivtil)lc 1^^475, Cash in IJank .^l-lfjO ; tliey owe noie.s to tlie exleiit of $'J,S20, and siindiy P'jrsons ^.■}2.')0. Wliat ia each inan'.s share of the net resources if .Sinitli gets ._. ^ of the gain and Brown \\. A.'CSwaR— Smith ^SSIS.T') ; Brown $5(i0(i.'2.'). 2. A and R are partners : A invested SlSOt) and B .•?!).">(). After carrying on husinessa year they find they have Morcliindise on hand $'_'l(i(), Cash on hand and in Hiuik $7'_'."), IS'otes ilne iheni $11,"), Accounts due them $S4ll. Tlicy owe on Notis $.'!()."> and on I'erKon.il .Vcjoimls $'i;sr). What anirmiit would each get if they dissolved partners'hip ? U hat is the ne^ g.iin due eacli if tliey .share two-thirds to A and one-tiiird to B? A.vswkk — A's present wortli $20t).'l.;}.'J ; ii's present worlli $10iW.()7 ; A's gain $-2'J3.33 ; B's g*in §140.67. ii- 'iji ■J .1. X anil V form ii piirlnorNliip, X iiiVHtiiiK |'i4IN) and \ :>'.>(MN). Dnrini; tin* yotr the gain nn niorcliaiiiliNii wom ?cnH('N for c'oii(lmairi>< tin' liimiricsM were, M'Ul ."^iriO, wnj; h .>*,"i.">l», otlicr ('V|i('iiHt'M i^KHl, X ImH witlulrawn ^AIKI, ^' •'?."i(K». If lliry Hlmr(li!aiiil N ^'I'll. How min^li liii^t cikiIi partner now if llicy Hliaru guinHuud Iohmuh ri|iially 7 A.Ns'MK M SI7.VI ; N •x|H(Ki. ■'), 'rn ms SII.'IK. Thny owe MilN I'ayalde "(iMT'i, a niertgage of !#1(MH» ami in- tereHt tiiercon >!7"', and sundry ])er«ons s-JI, 'id. (irant has willnlrawn .*!M,T_' and Miller Si7tW, The total piin liaH I eeii S'JIIIU. (1) VVhiil IH tiuh partner's pieHeiit worth '.' (•_') How niiiuh did each iiivt-Ht? Answi-.i; -(I) llr.inl ^iOlH ; Mdler sJKSi'. r2) (irant sisoo ; Miller S'_'7i III. tl. (ihiMs and Urown are purlnerM invc Ht'iifj Sl'.'."ill and SKill) respLetively. At tlui end of a year they have e ish ."-S'l'l, merili indiHe >•'.'( II Ml, liiili lieeeivaldi' ■".'I'Jll, artoiintM due them ."n'II'i, a inort^,'af<'_'ii;!!(,(ll', 7. Coopfraiid MonUmun are pirliier.M. Aecordinj; to Articli^n of Partnership tliey are to receive inteicst (Ml tlieir invistmeiil, and lo Im cliaij,'ed interest on their willidrawiil at the rate of (i per cent, per aiinuiii. They arc to rei cive a silary of .T-IMO each, and the renminiiij^ lo«» anil 4,'ain to he divided two ihird.s to ( ooper and onetliinl to Monkniaii. ('•ii|ier iiivest.s .January I, ,': Api il I , .'•^dlill ; N'ovumhei l(i, s7(l(>, Monkman inveBiB January I, .--."lUO: .liily I, ssoi) ; and withdiaw.s ,\pril l,.'^|i);); .Si^ptendier Id, !#l.'t(M> On .January I , of the next year the ^'ilii. noi t. iking into aeeoiiiit tlie partners' salaries or interest, is .*IH"i(), What i.s iHch pai tner'.s nut worth 7 (Time liy Coinpo-.ind .Snh r.iclioii ."tlJII days to the year.) Answku - Cooper !!<.'i(i,'M.t)7 ; Monkmim ■'*4I l.">.;);), H. A r.nd li are jiartners in a Iniiiness HhowiiiK the ^ains and les^es according to avorago invest- iTient. .\ invcstN d.Liiiiaiv I. Sl.-idl); May I. -^Mld: Si'piemlie- I, .l2(i(), and Z S>ldll!l,a.s silarie, rem liniii.t; pi oliis to lie di\ide(l ennally, .\ draws out during the year .*H7d, Y l!>!l."i(l, and Z .■<"idl). 'I'otai niiiis w ithoiit dediicliiij; the salaries are .s.'iSIM), What is each man's worth at the eml of the year7 .wswK.n- X .'jil.'Wd ; Y .-^ll.'.d : Z >!'... il.iyi lo the year ;) of the remaining profits (ieddcs is to receive two-tiflhs ami .Monknian tliieelifilif. What is each partner's net worth at the close of the ye ir 7 .Vnsw Kit - < ieddes .'■-'If'JI.d.") ; .Monkii.ii :..l;7">'^ !l"). 11. McDoiiiild and K.rrell are pat tiieis \!el)onnld invests January I. ISill, ijiSOO ; March 1(>, !ii!(id;»; .Inly I, .-Vidt ; Novemher 1."). .••;{:id. I'"eriell invests .Inniiary 1, .SlHdO, and draws out March I, l?.'ldd. If total L'ii:is well' s'.\M). wiiat would he each partner's sli'Me'r ('riine hy Conniounil .Suhtrac- tion.) ( laiiia ilividel accoiiling to average investments, Answku— iMcDomiUl §4(il.'_'0 ; Ftrrell !!>\ a month '^aa been paid for six months, the paymrnts bring invari- ably at the begi nin;.' of each month If the profits are .S'J!l,'>.7'i, what is the highest even rate per c 'Mt. of dividend that can be I'leiiiled 7 What would be the ('ividend r n a share in the first series? What in the >.;oei ml series 7 How much prol'itg would remain tinnniiortioned 7 AhsWEU — 10 per coiit. dividend ; d.") cts. on 1st series; 17^ cts. on "Jnd series ; .^siS.O? imapportioned profits, — 3'9 1.'^. Mr. MorriMoii RtartH Mr. I.iiiiiciiit in a liniin'l furiiiNli oapilitl, LiiiiDiil loilii wmU ^linx hikI Io.ini'h 4*'.','IIHI; CiiHhdii liiiiiil ><'M> ; I'l'rHoiial .XociiiiiitH Ken is Ktiiit of miiro ii 111 III' ."7- pi'i yiNir. 'I'lii! liUHiiicHH slwrii. Tlu'V nil' til lir |i.lltln IM Morritiill In lo III' iliNiilcil ri|trilly. Mrnliitiiili'ii III Htii('l< . ...Iilc (I'.Miil : liJIlN Ki'i'cix.ililc -lllu iKiiliitiililli'H, Hi till! I'liil of line vi'iir nKiiwit iiit'i'^'liiuiiliin liiiiit Mdlil ."^.'l.'itHt ; iiicruliiiiiili'iii on Imin I .-•.'.■)( Ml ; ri'iHuiial .\' I'limilh |!( itimiIiIc .-^Iso ; Noti'H iliiii liir linn ii'-'lHI ; IVl Annul .MrnlinlM I'ayiilili' .'•'•IMO ; jllllx I'a^alilo .SI7<) : IMil tnr Ki'lll 8.*)ll : for Kxpi'iim^N >>l III : I'. O. iilary J*'!'! ; rri^i'ivril tnr ntlnf hci vit'i'H ■'.'Hi ; r« ci'ImiI fir inuiixt •"I'-l ; ....:.! t i: .» ^-' . I .!■:.!..) ..1. wIiim .... i \l w-i nul wnrtli of i n; i worlh, Morriiidii ijt'jtill ; iln. >l i. Laninni .^1 I iliilii.'W I'aMJi slD!) ^iii.l \l II I isn't s;itii Kiinl [lai liici'H. .\nnnsku CaNli liulaiiuu >^'J70 ill I tM.Hli liiilaiii'i', I lia nul gam ^N'.'H ; |iruaunt imi' Slinrt (if Htnri' JM SIIIKI; Cixji an fiilliiH-H : my 111 liii'r ■II Mil .-^liL'n, .'I, iicrivi'd ilcruNt .Sll. (I) C-'l CO (•) Kiliil tlic CuhIi I! ilaiirr. II M net ){ain nf lii in II Mr. SliiirtH |ircH('iil wnrlli M Mr. .^ielit'dil'H prtHunl win tli I :i! 1. 1 II I inil.llll I.V.M.rMI (i."i!l.,'il) 17. A K*»tlL'^i>> A, ami a tuaiiHlcr, IS, (iiilcr iiitn iiarliicrHliii) in ilic wnnd liii>iiii'.sM. A liiiy.s wiiiiil, .^.S4'J.0'J, anil IS ^ivuH liiH notu tn .\ fnr liull' tlni aiiiniinl Inr a lialf iiitcii'.st. I! rnlli'i'iH tiii! nuy and (louH the liiiHiiiL'HH. During the tiiHt jcar tlicy n(iII Wdml fnr ^ll^ll .'^ell nf. l-'or thi! next ye.it A ha.s lim.glit wiili \m nwn funds and iiiM's'ed wnml >rf.'t'_', iind II lias liiiiij,'lit with liitt own funds aid in vetted wmxl .'<.'tlif K(l. .'SI Id nl llic fuml.s of lu.st yi'ir's wnml are al-n iineftiid in the new supply of wimd. The fanner di livers the .Sli.lin of wmtd due iiy Iniii. 'I'liey wisii to liiiow how nnieli eiisli It slimild have on hiiiid. and how it. s-limild lie ilividid litlwteii A and II .'in as tn set tie all |)irtiier. eu'Oi a liiilf inteiesi in the wood mi liiiiid, and in the wood sold on credit, Answkk - Cash on hand •''•_'41l. A draws out .'•_'!(•. "JO, leaving each worth •'i<(i."),'t.4.">. 18, A R and C enter into a pirtnershin .liiniiary I, ISOI. They ii),'ree thai (' i;i to nmna^je the litisiliest, and to receive a salary of .'iMillO hesides his share in the prnlils ; inis saliry In lie p lyahle semi- annually, in two payments of .'s'lllll each, .Inly I, ISill and .(iinuiiy I, l.Sirj, I'lleie.-t at, li pi'i- eeiit. to bf? cinnputed oil all invesllii;'iits and wit nlr iwals, and tlie ,i,'iiiis to lnMlivided e |liiilly, (uniiiil ni di- (lary interest fnr time ohtaiiied by ('ompoDiid .Siiliiiiielinii. ) .\ invest.- .I.iniiarj Isl .'«:iliMi:i ; ,\ii^.. |(i^ .<^.SIK)I) ; November I, ,'?l.'>llll ; he withdraws .Inly l,.-:llMH). I! inviUs .l.iiiuaiy I, s.'.IIDH ; ' .Maieli I, §401(1), C invests .January l,.'r*,SOI)0: July I, the s.ihiry due him ; .linniaiy I, ISd'J, the .salary due him ; withdraws .\p-il I, •'"lllllll) Their >,'iins diirinj; the year are as follows : .MereliandiM- .'^ll.'.'ilK), interest .*.'S(M> ; Real I'^state iJIIIO!). Their losses aiv : Kxp 'Iim' .':!-_'lll!l), (li>eniii:t .'^lillll, (inleKstaml discount do not iiieln le inti"'(!st on pvrtni'rV nee'iunls. ) llnw di the partiwis' aceouiits appear after tuljujtment January I, lS!t2 V Answkk— A .TJil'^.V.'? ; H .':?lv.'l M.-^iO ; C .s|(»0."i,s.,-|ii. ,1!). A and IS are partners. A puts in .- 1 1 101 1, average dale Mareh 10, I.S'sO, and draws nut > IliOO, average date September Ittli. IS invests s.")li,"iO, avtrn^je dale N!iiy .■(0. and drav^s (.iit .t.')!' ' , average dale October I.'hIi. The naiiis are tn he .livided ei| lallv a'ter III |i r eeir. int 'rest i.-, iillii«ed on capital in the business, and eli'irueil en all withdrawn. The net naiii is '?'J,'i,"(l. What is eaeli pait- nors' net worth lanuary I, ISllir; — ordinary interest for tiiiie (ibtaiiied hy eniiiiting Hcliial days AnsweH" A !?4'_>01'.42 ; IS *;S7!I7,.'>S, 20, V and (^ are partners, .sharing gains and losses iiooo .(ling to average iiive.sLiiieiit. I' invests .Tantiary 1, bSSO, ;?70ll ; April 10, .«!'.)0,l ; August I. ">,.•? I'M) : .Sepliinlu"- 'JO, .--.'l'O : unl dew nut .Inly 1, .•JS.'iO; i)eoeinb(^r 10, .'?:S2I). l> invests .lanuary 1 , .•?'.MI 10 ; M.iy I."), .-;|'_'ii;i ; .liily I, slid); ( letoher 'joi $400; and drew out .Juno I."), .'SIOIH) ; Noveinljer 10, .'SJOO, (Time by Coinpmiii.! ,Salilraelinn. ) The g'lin is $;S2(M). Find each partner's giiii and worth lannary 1, 1S!.(). A.sswiiii I's gain ."^ilMI 7(i • q'a gain *221 0,24. 1"8 worth $20.50,76 ; Q'a worth !Sr>'01!).24, 21, K commences busine.ss January .S, 1,S!1I ; afterwards N is aiiiuilteil asapaihier, investing 1 i times a'j much as K. Tticy ai.;ree that losses an I gains are to lie .-li.ued aecnnliiig to avera','e in- vestment. If on January 1, l«!)2 the g.iina are divided eiiually, tiiid the dale of partnu/'-hii) Answer— May 4, 18'J1. ' — 320 — ir h§ M- ('it "i^ i Eiii I I 22 X and Z are piirtners, their accounts standing as follows ; — Dr. X Vv. Dr. Cr. 1888 1 1888 I8S8 1888 Marcii IT) $1500 Jan. 1 ^nooo October 10 $2000 Jiiniiary 1 }I3000 August 1 TrtR) July 1.-) 1(100 March 1 2r)00 Nov. '2 2000 August 15 2000 Each is to receive a salary of .?.")00 ; interest at per cent, is to he allowed on all investments and charged on all withdrawals ; remaining profits or losses divided equally. If the gains before salaries and interest are deducted amounts to ?!42M), find the present worth of each, January 1, 1889. (Time by Compound Subtraction. Mi) days to the year.) Answer— X .*!81 10.01 ; Z lf7C70. •_';l. K and N are partners. K puts in laniiary 1, .^JOOO ; May 1, ^IfiOO October 1, $1000 ; he draws out April 1. .•ftlSOl) ; September 1, *7(K). N puts in January 1, .*I(I(K) ; Apiil 1, $2000 ; July 1, $.S(HM); October I, 841100; he draws out June 1 , -SlTiOO ; NovemlKi I, .'jlTiOO. Total gain for the year is $401M), Find each num's share of it and his net worth. Answkk — (iain— K$120.S.0l; N !?2797. V. w.— 1': ,?:{2o;i ; N !?!)797. 24. U V and W are partners. U puts into the business .*.'!0(I0, but draws out one half of it at the end of six months ; V puts in ¥>20tM( and adds $.')()0 to it at tlie end of two months ; VV puts in $2.">00 for the wliole year. The net gain for the year being .i?1700, what part belongs to each ? Answeu- iSA-lO ; .^nOO ; !?02 ; each to receive $400 per year salary ; X invests $1800, avurage dale Marcli 1.2 ; Y, .>?22.")(), average date May 7 ; Z, $12(K), average date April 10. At the end of the year the assets and liabilities of the linn are as follows : Mercliandise $25()0, Bills Hucpivable .*S0O, i'ersonal Accounts Receivable .'?12(K), Cash on hand $2;iO, Cash in IJank $1280, due on I'ersonal Accounts Payable $220, on Bills I'ayable $420. X has drawn $220 of his salary ; Y, $.'100, and Z $400. Gains and losses are to be divided according to capital inirested, the time being considered and counted by actual count. How will the gains be divided ? Answer— $38.60 ; $38.- 44 ; $20.85. Potrie and Norman arc partners investing as follows : Petrie, January 1, 188.S, .$800 ; April 18, $200 ; June 2C, .$500 ; September 30, $;10(), and witiidraws May 27, $400 ; November 10, $300. Nor man, January 1, $S0(( ; July 11, $S()0, and withdraws .March Ui, .$300. If the gain of $1000 is to be divided first by giving each a salary of .$."i(K), and the rest by average investment, What is the net worth of each, January I, 1884. (Time by actual count ; 305 days to the year. ) Answer — Petrie $lill4.()l ; Norman $2085.30. Settlements. FolK)wing this are a series of problems akin to partnerships. They are solved accor- ding to tlie same rules and principles that govern the solution of the partnerships in the foregoing section, viz. : the principles and rules for making Balance Sheets. The Cash may present a little difficulty. First open a Cash Account and place in it nil receipts and payments of cash specifically given, then in order to find the receipts on account of the siles of goods work according to the following principles. (i) If the business began without personal accounts or promissory notes. (a) Sales of goods = Cash received for goods, if all goods were paid for. (b) Sales of goods- Personal .\ccounts and Bills Receivable = Cash received for the goods. (2) If at the beginning of the anancial year there are either Bills Receivable or Accounts Receivable or both of them, then (a) Accounts and Bills Receivable at beginning + Sales of goods = Cash received for goods, &;c. during the period. If there are no Accounts or Bills Receivable at the time of settlement. (b) Accounts and Bills Receivable at beginning-!- Sales of goods - Bills and Accounts Receivable at end of term of business = Cash received for goods for the period. The very same method is applied to find the amount of Cash paid out on account of goods, etc. MB — 321 — Problems in Settlements. 1. A certain town pliiccd in the liands of a commissioner, Ii()uor valued at $140,1X1, anil ciisli, $8.00. He IB to receive $30.00 for services during llic year. He purclinses li"|i!(ir to the amount of $320.00, sells ^400.00 worth and has, at iho end ui the year, liquor on hiiiid that cost •'?1 10.00. (1). Did the town make any protit ? {'2). What was the baMnce of cash, after taking out salary ? Answek — Cash on hand, jJftS.OO ; gain, l?^H).(.K). 2. A <'o-operativo Association employed a dru j'.vst at a salary of §;'2.")0 per annum. He was furnished with drugs invoiced at *S40. 14 aiul cash ^T/.-lO. During the year lie paid for drugs bought for the Association $74!).'2i), and rcijuived from salos :?l()!i0.1i.'). At llio end of the year lie turned over to the Association the drugs remaining on hand, invoiced at SO.'iO.OO (I) Did ne owe the As- sociation or did the Association owe him, aiil71.8U. 3. I engage a clerk at a salary of .?(!00 per annum, and start him in hupineis with goods amounting to .*>3r>00 ; cash $So, and I'erfonal Accounts Htceivalilc .^-LSu. He haves at the end of ono year and eight months, at which time his books show merchandise liought ^IH(M), merchandise sold |I6325, meruhuidise on hand .'?222(), expenses !?lti0, Tursonal Accouita due us .'*SIO. If the clerk takes all the cash on hand, do we owe the clerk, or dots he owe us, and how much? What is our gain or loss ? Answek — We owe the clerk .^22') ; loss •'?!(lu. 4. Notter sends Guttin to take charge of a liusi;iess for him. There is a atcck .-if goods in the store of $1350 ; cash on hand iSSO ; debts duo liom cu.stoiiieis on ttie books S'2iiO, and notes en hand iJHO ; and there are .$000 of Bills I'ayable outstanding. Gultiu is to get ??.'i(» per month. Rent is to be $5 per month. At the close of 18 months Notter dismisses him, when he finds goods on hand ijilliOO ; merchandise bought .?3700 ; merchandise sold ;?48(I0 ; liills Receivable iis'itiO ; Pergonal Accounts Re- ceivable $5!K) ; Bills Payable !Sti.'^5 ; Personal Accounts Payable ?:l(ir); paid to Notler in cash S>200. There was received lor various services during tie time .'?S4, a id paid to liuttin his salary in full ; on account of rent .$80, and for other expenses .?1.S0. There is .'■>10.2") cash in the till, Is it correct ? What is the gain or loss for the f iine ': 5. M'. M. starts Mr. K. in a branch store, with goods to the amount of #I,()50.00 ; cash, ^.SO.OO. The rent for the store is $120. (M) per year, Mr. IC.'s sulary, !?.'{(iO.(10. At tlie end of 10 months M. looks after the business, and liiids th;it K. has purchased goods to the amount of ."^J.-lCO.liO, sales of goods amotint to $3,224.50, expenses piid, $7'>."iO, remitted to .M. from tiii'e to titnu, c ish $4.")0.(X) ; the personal accouii's in his favor am lunt to !?41 1 ; personal accounts against liim, !f.")7.">.(M) ; Mdse., as per Inventory, .?i,i)40.(M) ; rent and salary are not paid. (1). Has the business made a profit or a losi? (2). Does K. owe M. and, if si, how much if K takes the cash balance? Answek — (1) Profit of J249 ; (2) Cash !S!2!)3, leaving S7.(K) still due him. 6. Mr. McConnel starts Mr. Mair in a branch store with the following : Mdse. .'f2,ri(!0. Cash KW. Rent of store is to 1 J .$72 per year ; Mr. Mair's salary $120 per year. At the end of fifteen months Mr. McConnel looks over the business and finds Rent paid to tht? anicunt of i.Ht; Kxpeiisca .$120; Sal-Jiry $4!K) ; Bot Mdse. to the amount ( f .$.>,(;20 : Si>l(i Mdse. .$7,210 ; Mdse. asjur Inventory, .$2,100; $1,800; Outstamliiig Acouhts (1) What is the Cash IJalaiice liie .'?2,0(:0. I'aid the (2) is there a gain or Mdse. bot. and not p-iid for pur a, cs. Pay proprietor during the fifteen months, -^dtio. loss? Answer— (1) *I01 ; (2) (iuiu, *18."), 7. Mr. Farney starts :* .• Cih ; in a branch store with goods anu untiiig to $2,1(10 : Cash, .$iiO ; Notes ( Bills llec), .$'i'{0 • and P «1 riads giiods in stuck $1,800 ; goods bought, ;34 ."lOO : goiils l-oUI, $(),3(K) ; expenses paid, ^72 • . ., p.dd, $."i() ; snUiy paiil, $2.J0 ; notes in sate, > '♦•O ; Bills Payable, outstand- ing, .$7.'>0 ; Person.i 1 Aji-u. ts Kec-jivable, .'i^840 ; Personal Accounts I iynb'e, .YPiO. Received for interest, .$31) ; forinnniiga nost olhce', $180 ; for other seivic «, $2^ Paid the pr( prietor cash $300. (1) Find Net (vai,le, :.■!!•', Hills Payable, $10 ). How does Mclntyre staiiil in regard to the busl I'-as, and v.as there H.:y piotii in the business? AN,sWKit — (I) Cash balance .$340, on hand, .$50, ^iavi.ig $'2 A, dri\>'u '^ Mclntyre, which was $iO less than salary earueel by him ; (2) Net Gain, !$7!J5. •^ 322 — p#t 0. Mr. McDonagh starts Mr. Bowie in business in a branch store, with goodH on hand wortli $3,250 ; Cash, $(jO; uucounts in the books due him, f^tiO; NottM payable to him, $!il). He owes to the wholesale houses Accounts Payable, !>.S00, and Hills Payable, »il7.">. Mr. Howie is to receive a salary of 1.300 per year ; store and rent is ^4 per year. After 18 months McDonagh goes down to examine into the stata of the business, which he finds is as follows : Rent ))aid, !^\i){); .salary paid, !$4(l() ; expenses paid, 1175 ; Mdse. bought, ?4, 200 ; Mdse. sold, .■?.">, fiOO ; Mdae. on band, .•?;), (lOO. Paid at different times to the proprietor, ?800. Personal Accounts Receivable, >}:iW : liills Receivable, f 160 ; Personal Accounts Payable, |200 ; Bills Payable, i?450. Received for post-olHce salary, ?>ir)0 ; for interest, f20 ; for office work (conveyancing, &c.), .98."). Cash in safe, 8.S10. How docs the business stand ? Has the clerk been ombezzling, or is there sufiieient money to meet all demands? Answer — Present Worth, $.3,639 ; Net Gain, $1,2.~>4 ; $5.00 too mucli Cash on hand. 10. Mr. Peffer sends Mr. Harris into the country to take charge of a biancli store, giving him Mdse. $1,300, and Cash $40 to start with. The rent is to be ^(iO per year, Mr. Harris' salar_ $300. When the business has been running for 15 months, Mr. I'cfl'er goes to the store and, finding Mr. Harris absent, he starts to examine the business. He finds Mdse. ui stock .'^l.ts.'il) ; amount of Mdse. purchased during the 15 months, $3,850; Mdse. sales, .'J4,()(MJ. For several services Mr. Harris has received Cash $72, and for P. 0. salary .$50, and .'?12.t'>0 still due. Kxi>ense has been paid, $110. There is to pay on account of .Mdse. bought, 8200 ; accounts due foi- .Mdse. sold, i*,m(). Rent and salary paid to date. (1) What is the gain ? (2) What is the balance of t"a«h on band ? Answk:^ —(1) $874.60 Gain ; (2) $2 Cash on hand. 11. Mr. Peffer starts Mr. Macintosh in a branch store in Chatswortli, furnishing him with goods $2,000, and cash $120. Salary is to be $450 per year and rent .•? 1 20. At the end of the year the business stcnds as follows : Mdse. purchased during the year, :i!5,200 ; Mdse. sales, .^(i.OOO ; Mds' . Invent* "y, $2,500 ; expenses paid, $I3:£ ; Personal Accounts due the firm, •'?1,1(H); notes in f;, 325 worth of Mdse. purchased ; there was $7,000 worth sold and $1,500 worth in stock at the end of the year. Kamnge's salai-y liad been raised to $3.50, and he has drawn on account of salary $375. There was paid for rent jl lit ; for other expenses, $141 ; and the proprietor withdrew .fl,OIM) in casii. Tluie his been reci'ived for services rendered, $120. At the end of the year, there are Personal Accounts Receivi'ble, .S.S, 100; Bills Receivable, $625 ; Personal Accounts Payable, ^675 ; Bills Payable, .'?4(H» Wh'it waj the balance of Cash on hand, and the Proprietor's net gain and worth in tlie business? Answi r- -Cash on hand, $111. Net Gain, $1,545. Present Worth, .f 4,236. 14. At the end of the next year ho finds that he has purchatcd .■?!), 200 worth of .M(ise. and sold $8, .300, with $2,8.50 still on hand. Ramage's sal ,ry duMng the year was to be .S4()0. Received during the year $80, being country P. 0. salary, and .?214 for services rendered. Paid salary, .*!30() ; rent, $77 ; expenses, $253. There are Personal Accounts Receival)le !? .S,7()(t, •S.'^.'iO having already been written off as bad debts ; Bills Receivable, amounting to .'?5li5 ; Bills Payable, .Sii'il) ; Personal Accounts Payable, $930. Tho Proprietor has withdrawn SS^OOO. Find the balance of Cash on hand; also the gain, and the Proprietor's Present Wo' i'l. Answkk — Net Gain, ?j!2,(i57. Present Worth, $5,89.3. CasH "n hand, $400. 15. Robinson places Ferrell in a store, where the following is the state of business : - Merchandise $1,560 Bills Payable $400 Cash on hand 80 Personal Accounts Payable 2.50 Bills Receivable 230 Personal Accounts Receivable 630 Ferrell is to receive a salary of $360 per year ; rent of store to lie S!S4 ]ier year. At the end of a year they find merchandise on hand $1800; merchandise sold ;5!4.")(HI ; niercbandise bought .'?.'i7.")0 ; received for services as Post Mister $1.50 ; other services .^75 ; paid on account of rent S70 ; on lie- count of salary to Ferrell $.3(M) ; for running expenses #40; returned to Mr. llobinBon cash S.'tdO ; Personal Accounts Receivable $!K10 ; Bills Receivable on hand ?!4l(0 ; Personal Accounts Payable $470 ; Kills Payable, outstanding, $280. Find the balance of cash on hand. Was thfre p gain .•'r loss, and how much ? What was Robinson's Present Worth ? A.nswer— Cash on hand iJ.'iOO , not gain ^7.)' ; Robinson's present worth $2281. I — 323 — sold ;eived Si Compound Interest. Definition. The ordinary definition given for Interest is " money paid for the use of money." This definition of interest, though common, is not strictly correct. The money paid for the use of money is Cash — not Interest. We would not think of call- ing the '■'■ le^al tender" that we pay for a horse by the title '•'■live stock" — we would call it cash. We pay cash for merchandise, for real estate, for live stock, for interest — therefore interest must be something different from the cash paid for it— it is the tise of money When money is loaned for a specified time, and a certain sum is to be paid for the loan for the use of it — if that sum due for the use of the capital, and the capital itself, are not returned, and the use of not only the principal, but the amount due for interest charged for — then we have Compound Interest. If a five year loan of a thousand dollars were made at 6 per cent., simple interest, it would be repayable at the end of five years in the sum of $i,ioo — the whole principal and the whole interest together at the end of the term. If the principal is payable at the end of, say five years, and the interest annually, half yearly, or quarterly, then we have Com- pound Interest, because the interest being repaid to the lender, gives him the use of the money paid tor interest, and allows him to re-invest it and accumulate it. It matters not who pays for the interest on the interest. This view of Compound Interest is necessary in order to a thorough understanding of investments of various kinds. There is so much slip shod work done on the calcula- tions for Sinking Funds and payments on Debentures in Municipal work, and so many blunders made in making investments because the calculations are made by a kind of simple interest method, without regard to the principles involved, that it is time to call a halt in such unbusiness-like methods, and apply Compound Interest principles, so that all such work may be equitably done. We presume that the reader understands the simplest methods of working Com- f ound Interest. We propose to give an illustration of it, then deduce from our work a Compound Interest Table, and from that an Investment Table. Find how much $500 would amount to in three years at 6 per cent. $500 30 Operations. Principal Interest for first year (2) (3) $500 $1.06 1.06 1.06 530 Amount at end of I St year to begin the second year on 530 31.80 Interest on $5.30 one year 1.06 561.80 Amount at end of 2nd year to begin third year on 561.80 33.71 1.06 $595-51 Amount at the end of the third year $595-51 6.36 106 1. 1236 1.06 67416 11236 f!b> 191016 500 $595-508000 I: [ I ■ 1 — 324 — If the interest only is required, subtract the principal from the amount and the interest remains. In the first operation the additions only are made — in the second and third the niulliphcaiions are made, and it will be noticed that these two methods are the same, e ;cept in arrangement— there is $1 + the interest on it for i year, or .06 used three times in multiplication as there are years, and $500 multiplied into their product (o get the amount — $1.06 x 1.06 x 1.06 x $500, or $i.o6'' x $5oo = the amount. We may lay d( wn a general rule, $1 plus the rate of interest raised to the power equal to the number of limes interest is compounded, and that gives the amount of $1 for the time, multiply by the sum invested, and we have the amount. By comparison of th iiird opeiation with th*" 6 per cent, column in the table fol- lowing, it will be noticed tl ' '•,• table is made by simply raising $1 + the rate of interest to the 45th power a^ eu- .ate per cent., and noting each year the amount of $1 at the rate that is being worked. Compound Interest Table. Showing the amount of-$l invested at nine rates of interest for any num- her of years not exceeding forty-five. Trs. 8Z. ««• 6X. nx. i'l. IMOO <♦•/.. 6'/._ i.neoo 67.. ! r/. Yri 1 1.U2U0 1.0250 1.0300 1.0350 1,04S0 1.0600 ; 1.(1700 8 1.0404 i.osoe 1.0609 1.0718 1.0616 1.0920 1.1025 M23C 1.1449 8 J. 0612 10769 1.0927 1.1087 1.1249 114U2 11576 1.1910 l.'JSSO t 1U824 1.1038 1.1266 1.1476 1.1699 1.1925 1.2155 1.2626 131(16 t 1.1041 1.1814 1.1593 1.1877 1.2167 liiOf. 1.2763 1.3S«2 ' 1.4(.I26 e 1.1262 1.1597 1.1941 1.2293 1.2653 1J023 1.3401 1.4186. 1.6007 6 t 1.14»7 1.18S7 1.2299 1.2723 LSLM) 1.36U9 1.4071 1.6(Q6 1 1.6058 7 8 1.1717 1.2184 1.2668 1.3168 1.3686 1.4221 1.4775 1.5938 1.7182 8 B i.m6(» 1.2489 1.3048 1.3629 1.4233 1.4861 1.6618 1;6895 i 1 f3S6 9 10 i.nw 1.2801 1.3439 1.4106 1.4802 1.5530 l.CJ^ 1.7908 i 1.9678 10 11 1.2434 1.3121 1.3842 1.4600 1.6395 1.6229 1.7103 1.8963 ; 2.1049 U 12 i.aoMJ 1.3449 1.4258 1.6111 1,6010 1.69.59 1.79.56 2.0122 ! 2.2522 12 13 1 am 1.3785 1,4686 l.,'J640 1.6651 17722 1.8866 2.1329 ! 2.4098 13 14 1.3195 14130 1..5126 1.6187 l.,J17 1.8,';i9 1.9799 2.2609 2.6785 14 IS 1.3469 1.4483 1.5580 l,67'-^3 1.8009 1.B353 20789 2.3966 1 2.7590 { U 18 1.3728 1.4845 1.6047 1.7340 1.8730 2.P224 2.1829 2.6404 1 2.9622 ! 18 17 1.4002 1.5216 1.6628 1.7947 1.9479 2.1134 : 2 2<'2() 2.0928 ; 3 1.588 1 17 18 1.4282 1.6597 1.7024 1.8575 2.0258 i.2085 i 2.4066 1 2K><3 i 8 3799 ■ 18 19 1.4568 1.5987 1.7535 1.'.225 2.1068 2.3079 ' 2.527C . 3 02.56 , 3.0165 ; IB SO 1.4b69 1.G386 1.8061 1.9896 2.1911 2.4117 2.6533 , 3.2071 , S.8697 ■ 80 21 l.BLW 1.6796 1.8603 2.0694 2.27S8 2.5202 : 2.7860 ! 3.3986 . 4.1400 1 21 S2 1,6400 1.7218 i.9;«i 2.1315 23099 z.Kai ; 2.n2.\3 : 36('35 ' 4.4304 1 22 03 1.6769 1.7646 1.9736 2.2(161 2.4647 2.7.522 3.(1715 i 3.8197 ■ 4 7 3. 1670 3.82.54 4.6l(-p| 5..5C.->!I 1 i!.7m8 9 7iK IM.'.CIS 39 40 . 2.2080 2.1:851 3.2620 3.i'59H 4.KU10 6 KlG' 7.0100 111 1'.; 67 li lik5 iO ii ! 2.2.'-.22 2.7522 3,3599 4.0978 4.9?31 0.0781 '^fon in.ro29 10 0027 41 42 1 2.2972 2.8210 3.4607 4.21 i;i 51i'28 6.3516 7.7ti>: 11. .557" 17.1443 48 43 2.3432 2,8915 3..5(>45 4.3W7 5.4('05 0.('..'i74 8.1 M i-l'ljKi 1.S3444 43 44 2.;i!K)l 2.9r38 3 6713 4..'h;).1 5.61f;5 (■•.9361 8 5.572 I'J.lS.'-.'i 1".(;2W 44 J « 2,4379 3.(':)79 3.7811! 4.7(ei 5.8412 V2IW 8rK5ii ]:i7iiji; .Vi.i«".!5 1 46 32! To use the foregoinf; table in compound interest work, find the rate of interest re- quired, run down that column until you come to the number of years recjuircd and you find the amount of $ I for the time recjuircd at the rate reciuired. It is evident if the inlerest on one dollar is found, that the interest on any sum, say $500, would be five hundred times as great as the amount of one dollar. For half yearly interest take half the rate and twice the number of terms — the amount of $800 at compound interest for 12 years at 6 per cent, half yearly would be 3 percent, for a half year and 24 half yea's, or 103'"' x $800, or $2.0328x800. For quarlei'ly interest take four times the number of years and one-fourth the rate per cent. The following table, usually called an Investment Table, presupposes the addition of the same sum each year to ca[)ital. This table is based on the investment of $1 each year. Fit'ty dollars invested each year would be just fifty umes as much as $1 invested annually for the given term. This table is formed by simply adding the foregoing table for the number of years required. Investment Table Showiny the amount of $1 invested annuolty for any number of years not exceeding fifty, at eight different rates. Yrs. 1 3"/.. 1.0300 3J7.. 1.03.50 47,. 1.0400 57. C7.. 7%. ny.. 10%. YrH. 1 1.0.500 1.0600 1.0700 1.0800 l.lOtH) <2 2.090!) 2.1(H)2 2.1216 2.1.525 2.1Kt5 2.2M9 2.241)1 2.3100 2 3 3.1H36 3.2149 3.2465 3.3101 3.3746 3.4:)99 3.r)061 3.6-110 3 4 4.,1()91 4.3625 4.4163 4. .5256 4.6371 4.7m 4.86()() ,5.1051 4 5 5.46»4 5.->502 5.6330 5.8019 5.9753 6.1-)33 6.3359 6.7156 5 H 6.(i«25 6.7791 6.89Ki 7.1420 7.3938 7.6510 7.9228 8.4872 6 7 7.H!^2;^ 8.0517 8.2142 8.5191 8.8il75 9.2.598 9.6:t66 1(1.4359 7 8 9.1591 9,3685 9.5828 10.0266 10.4913 10.9780 11.4876 12.,5795 8 9 10.41)39 10.7314 11.0061 11.5779 12.1808 12.8164 13.1866 11.9:174 9 10 ll.tOTH 12.1420 12,4864 13.2(168 13.9716 14.7836 15.64,5,5 17.5312 10 U 13.1920 13,6020 14.02.58 14.9171 15.8699 16.88K5 17.9771 20.:)8I3 11 li 14.6178 15.1130 15.6268 16.7130 17.8821 19.1 1(H) 20.49.52 •2:!..5227 12 ii i6.08ta l(i.t)770 17.2919 18.,5986 20.0151 21.5.505 2:1.2149 26.9750 13 14 17..59N9 18.2'l.57 19.0236 2(l.,5786 22.27ti0 24,12',)0 26.1521 :i0.7725 14 15 19.1569 19.9710 20.8245 22.6575 24.6705 2ti.8881 29.3243 34.9497 15 16 20.7616 21.7'^'J 22.6975 24.8104 27.2129 29.8102 32.7.502 39.5147 16 17 22.4144 ■iiAVM 24.1)4.54 27.1321 29.90.57 :12.9990 :il).4.5(l2 44.5992 17 IS 21.1 169 25,3.573 26.6712 29..53'.H) 32.76'W 3().37iK) 4(l.44(a .50,1,591 18 10 25..S704 27.2797 28.7781 32.lKi60 35.78)6 39.99.55 41.762(1 iM.'SlM 19 2U 27.676") 29.2695 30.9692 34.7193 38.9927 43.8652 49.4229 63.0025 2U 21 29..'i36S 31.32i)0 33.2180 37.,50.52 42..392;j 48.0058 ,54.4.568 70.4027 21 '22 31.4.V29 3:il(i04 35.6179 40.4305 45.9958 .52.4::61 .59.89t;;) 78.54:)0 22 ffl M.4265 35,6665 38.0820 43..)02:) 49.8151! .57.1767 ():5.7648 87.497:) 23 24 35.4.5:t3 37.9499 40.6459 46.7271 .5:1.8615 62.2 IIH) 72.10.59 97.3471 24 25 37.5530 40.3131 43.3117 50.1i:i5 58.1.564 67.676^5 78.9.5i4 108.1818 25 26 39.70',I6 42.7591 46.0842 .5;J.6961 62.7(«3 73.4.8,38 86.3.508 vMima 26 27 41.93(W 45,290(1 48.9676 57.1(12(1 67.5281 79.6977 94.3388 1:0.21199 27 28 44.2188 47.91(W 51.961);) 61.3227 72.():198 ,8().3 11)5 102.96.59 147,6:109 28 29 46..57.>4 .50.6227 .55.0819 65.43Si 78.0582 93.4608 112.2332 IK), 4910 29 30 49.0027 53,4295 58.3283 69,7608 83.8017 1C1.0730 122.3459 18J9434 30 31 ,51..-yi28 .5<).:«45 61.7015 74.29,S.8 89.8898 109.2182 i:«.21,)5 2'.n.l378 31 32 54.0778 ,59.3412 t)5.2(KI5 79.116:W 96.3i:)2 117.9;i3l 144.9.506 221.2515 32 33 .')6.73il2 62.4->32 68.8579 84.(1670 lo:i.i8;)8 127.2588 1.57.62()7 241.4767 :« 34 .59.4621 65,6740 72.6.522 89.3203 110.4348 l:!7 2:)69 171.3168 270.0214 ;m 35 62.2719 69.0076 76.5983 94.8363 1181209 147.9135 186.1021 298.1268 35 36 65.171:! 72.4.579 80.7022 100.6281 12.j.2a81 1.59.:«71 202.0703 :i29.0:)95 36 37 68.1.594 76.0289 8l.970:i 106.70— Government's side of account =$600 for 20 years at 4 % = $r)oo x 2. 19 11 =$1314.6600. Borrower pays back say $1 per year at the end of each year. 19 payments of $1 at 4 % = $28.7781, add $1 for last payment = $29.7781 by investing one dollar. Therefore $1314.66 divided by $:;9.778i =$44.15. Short Solutio7i of Question No. ,10— $\ each year for eight years at 6 %-$io.. 4913, add $1 =$11.4913 X 225 = $258s. 5425, or total value at the end of nine years. Divide this by the amount of $1 invested at 6 % for nine years, or $1.6895 = $1530.36. Compound Interest Problems. 1. How much must A invest for his son 15 years old at ('>;{„ intDrost compoundoclannually that when he is of age he may receive $3000.00. Ans. 82114.'.)1. 2. Find the amount atcoin[)''und interest of 8200.00for 1^ years at 8 per cant, compounded quar- terly and show from j o vork t he following statement : ($200 x 1.02.t),) when worked out would give the correct answer, .inh. i25.'2i. ■ 3. At compound interest, (com po;m-.lad somi-annuilly) at 8% p'3r annum a certain sum amounts to $723.1!) in 2J years. J'ind tlie jjrincipal. Ans. $5i(4.3!). 4. Find the amount necessary to ba placed at compound mterest at 8% when a boy is 14 years of age, BO that he may have $4500.00 when he is 21 years of age. Ans. $2(125.74. 5. Money being worth (!^"„ how much will it take to produce $320.00 in 2 yrs. C mos., interest compounded unually ? Ans. §273. 25. C. What amount would you deposit in a bank at the boginnin« of each year at 5% int., com- pounded annually, so tliat at tliu end of years you mlfiht have $1800.00? Ans. $252.04. 7. How much must 1 invest at tlie boginniii^ of each year at six per cent, per annum so that at the end of () years I may have $2500? Ans. $338.12. 8. A 20 year Endovmant policy in the Confederation Life Assurance Co. for $1000.00, costs annually $47.(18, which would be the moie profitable and how much, to invest in the policy, or to invest the amount of the premium annually at 4';;,, compound interest ? ($1.00 invested at the beginning of each year for 20 years at 4"b— $H0.ii(l!t2.) Ans. To invest in other ways the better by $47(1.(11. !). VVhicii is the batter investment a life insurance policy for $4000.00, costing $114 annually for 20 years, or $114.00 invested every year at 5 per ceHt, compound interest for the same time ? Ans. Insurance policy $42.0f . 10. The Township ji Collingwood issues 10 debantures of $500 each, payable in 20 years. Money is worth 4%. What sinking fund will have to be put away each year to meet the debentures when they become dne ? Ans. $1(17.91. 11. The Town of Owen Sound issues 50 debentures of $1000.00 each, payable in 20 years. Money being worth 5%, what sinking fund will they have to invest each year to pay off the deben- tures when they are due? Anh. $1512.13. 12. I have a mortgage on my farm of $1000.00 payable in 10 years at 7%. Interest payable annually, (a) How mich must I put in the Savings Bank each year at 5% in order to pay off the principal of the mortgage when it is due. (b) How much must I put away half yearly at (I'X, per annum, interest compounded semi-annually ? Ass. (a) $711.50; (b) $37.22. 13. What sinking fund invested at the end of each year is rjquirod to pay a $1000.00 debenture in 20 years? Interest on sinking fund compounded annually at .5%. Ans. $30.24. 14. A town issues 50 debentures of $100.00 each, payable in 20 years. When monoy is worth 6% what amount of sinking fund will have to be invested at the end each year to pay them off when they are due? Ans. $151.21. 15. How much will be required to b3 pat away at the end of each year for 20 years, inter- est compounded semi-annualv at 4';f,, so that at the end of that time there will be an accumulation of $15,000.00? IIow much if tlie rate is d";,? How much at 5'^, ? Ans. $.501.(14 ; $403.84. 1(1. How much will bo required to bj put away at tha end of each year for 20 years, compound- ed annually, at 5"{n so that at the end of that time there will be enough to meet a debt of $20000.00? How much at 4'X, ? Ans. $(104.85; $(171.(10. 17. I have to pay $1(100 due in ten years from date. How much must I put away in the Sav ings Bank at the end of each year at 0%,.compo'inded semi-annually, so as to be able to pay the debt at maturity. Ans. $120.88. — 327 — 18. The T0V.-2 o! Owen Sound purposes raisin.':; 975,000.00 by ipsninfi TTt dcbcntnrca of »1000.00 Cftch, payable in 20 years, for the purpose of bnilaiag .1 railway extension to Allenford. (u) What anioii'it of sinking finid must the 'I'cwn place at i>"'„ int'ircst at the end of eacli year so as to bo able to pay thvs;- debentures at maturity ? (h) If the assessi-d valuy of tlie town is 82,.50(l,000.00, what would be the rate of taxation for the annual sinkin;; fund? Ans. (a) (f'i'itW.l!) ; (b) '.(/lO mills. 19. I lend Brown ^750.00 on his farm at 10 ','. to ba paid haok, principal and interest, in 5 yearly equal instalments. Find the amount of the annual instalment. Ans. $li)7.85. 20. i borrow 81)00.00 from the Ontario CioveruBient at 4",, for drainaf^o purposes. How much will I have to pay back each year in ordjr to pay off principal and interest in 20 equal annual pay- ments? Ans. 44.15. 21. 8400.01) arj b:nrow ; I f.),- drainin;^ piirposjs at 3 ';,, to bj piid bauk in 20 equal annual in- stalments. Find tb'3 amount of the instalments. Ans. ftiVi.lO. 22. What is tha annual pay nent required to rupay 81300.00 at ().4"i'>, allowing the same intoreat on amount repaid, that it may b ; paid in 10 yyars? Ans. 81S0.00, nearly. 23. I borrow 81300.00 at (5 ,, to ba rapaid in 10 equal annual instalments of principal and in- terest. How much must I pay a: the end of each year ? Ans. 817().(>2. 24. I borrow 81000.00 now at (i%. I am to pay principal and interest back in 1.5 equal annual instalments? What will be the amount of each instalment ? Ans. 8102.'.l(j. 25. What would ba the annual payment on 82000.00 borrowed for a term of 12 years.^interest and principal are payable in 12 ejual anuu.il inst. 30. Mr. i>IcRae owns a mortgaga of 81000 against Mr. Miller, which is not duo until the end of 5 years — interest at 8% payable annually. If money has decreased in value 2% and isnow worth only 0%. What does Mr. Mcliae gain or lose if ha accepts 81050.00 in payment of the mortgage now ? Ans. Loss 834.27. 40. How much can I pay for a mortgage of 81000.00, payable in 10 years, with interest thereon at 7% par annum, payabla half yearly, so that I miy raaliza 5;,', par annum payable yearly, on my investment ? 41. Mr. Howes holds a mortgaga of 8800.00 against Mr. White's farm. The mortgage is pay- able in 7 years and bears interest at 8% per ammumpavabla semi-annually. If money is worth 0%, compounded semi-amiually, now. How much would Mr. Howes gain or losa if ho accepted 8'JOO in cash now as payment for the mortgage ? Ans. 80.04, gain. 42. The Township of Keppel desires to borrow on debentures 81107.74 re-payable as follows : For the first 4 years the interest only ot 5% is to ba paid ; for each of the following 10 years a 8100 debc itnre and interest on unpaid principal ; and the last year one debenture of 81')7.74 and inter- est on unpaid principal. How much will they have to raise each year, providing they inrest the tvmount over at 5%, so that tlicw debentures may be paid in 15 years. Ans. 112.50, IL 328 — Auditing. ■ >i^ The Auditor iihou\d be a man of reliable character, having good judgment, and plenty of what is usually called "back-bone." He should understand financial matters generally, and be a good accountant. An accountant is likely to be a good book-keeper, but a book-keeper may only be able to do routine work such as posting, etc., and he may not understand the principles of book-keeping, nor the bearing of one account on another, and the relations betwoen capital, revenue, etc. If such is the case he is not an account- ant. He works mechanically, and not from principle. Such a man is no use as an auditor. Reliability of character, etc., are quite necessary, but they will not take the place of competency. Both honesty and ability are retjuired in the first degree. The idea of appointing honest men as Auditors is thoroughly understood the country over, and we presume that all the auditors appointed by towns, townships, villages, counties, cities, etc., are honest. They are appointed generally on the sole ciualification c" uprightness, and the idea of real abilily to do the work properly is rarely in the minds of those making the appointment. Not only is this true of non-trading corporations, but of Joint Stock Companies as well. The Auditor s Qnalifications. Aside from the honesty qualification the Auditor should understand (i) Double and Single Entry Book-keeping, (2) the laws of the coun- try that exist regulating the business, (3) The charter or letters patent of incorporation, (4)the rules and by-laws governing the corporation. He should be able to pronounce authoritatively upon the four kinds of errcis he is likely to meet with and sugjjest corrections for them. They are (i) Errors of Omission, the leaving out of business transactions that should be recorded. (2) Errors of Commission, that is, the entering of transactions that did not take place or entering them incorrectly, or entering them a second time. (3) Errors in mechanical work, such as mistakes in arithmetical calculations, such as making bills out incorrectly, mistakes in posting, etc. (4) Errors in principle, that is, such errors as are (a) contrary to the principles of book-keeping and finance, such as the capitalizing of expenses, and (b) contrary to the laws of the land, or by-laws of the company. The majority of Auditors are content to perform all their work in looking for the third class of errors, and this is the kind they are least likely to find, as nine-tenths of the crookcdr.ess in books is perpetrated under the other three kinds of errors. Regarding the duties, responsibilities, ^:c., of the municipal auditor the ^^ Municipal World" has the following to say, to which we may add that the number of defalcations, &c., of Township, County and Town Treasurers, CollectO'-s, Ike, has increased to an alarming extent during the past few years, that we l)elieve the suggestion of the Municipal Com- mission to the Ontario government, to appoint government auditors to inspect municipal books cannot be put into effect any too soon. "Auditors should be men capable of checking the work of the clerk, collector, treasurer and all others who handle the public money. They should receive salaries suf- ficient to pay them for doing the work in a thorough manner. Checking over the vouchers fiqd making a copy of the treasurer's books is not an audit, although it has been accepted 329 as such in many municipalities whose acroiintr, more especially those relating to debent- ures, are now in such a condition that only an experienced municipal man and an accountant with plenty of lime at his disposal, ( ould open them up properly. If audits were thorough the treasurer would be more particular and would not be tempted to use the public money for his own purposes. With an average audit every treasurer can, if so inclined, arrange matters in a way that the auditors never suspect anything wrong. The auditors should refer all irregularities they find to the council. One mailer that recjuires their f.pecial attention is the balance on hand. The Municipal Commission Report refers to numerous defalcations which were covered up by a little manipulation on the part of the treasurer at the end of ihe year. To overcome this auditors should in all cases con- tinue their examination of ihe accounts from the 31st of December up to the date on which they complete the aud't." "Unless councils are more particular in their appointment of compelent men, who will attend to their duties as auditors, the appointment of these officers may bo justly taken out of their hands." The Financial Stalement — So much has been said in reference to the Financial Statement in former pages that it is quite unnecessary to say much about them here. We would recommend the careful reading of the following parts : page 105, I'iant account ; pagei 105-108 inclusive ; pages 118-9 on Wet and Dry Stock ; pages 139 40, Trip State- ments ; pages 149 to 219 inclusive, in which there are many hints in reference to the Financial Statement. Pages 239 and 240 in reference to sta emcnts of mutual Insurance Companies ; pages 266-8 inclusive re statements of T.uilding and Loan Societies ; pages 275-7 relative to Manufacturing; pages 292-S in reference to Municipal accounts, and page 306 relative to the statements of Churches. The section on I'arlnerships and the settlement of partners' accounts should receive careful altention as well as the problems given in connection with them (see pages 226-9). The department of Settlements with branch houses, agencies etc. should not be overlooked (see pages 321-2), and the part refer- ring to Investments should have the serious attention of every person who has auditing to do for eiiher municipal or financial institutif)ns. There are two classes of books in use generally, and the auditor should thoroughly understand their use, they are : — (1) Books of Account or Financial Boohs and to this class belong Day Books, Journals, Ledgers, Cash Eooks. Invoice Books, Sales Ilocks, &c. (3) Books of i2e7tsfr»/. for records or statistics, etc. To this class belong Stock Book, Share Register, Transfer Book, Index Book, and thousands of other books, devised for all kinds of special purposes. Occasionally a bonk belongs 10 both classes, for exani])le, the Insurance Regibiers on 232, 233, 237, 238. These not only are registers of particu- lars of policies but thvy likewise are used to sum uj) the transactions month by month for other financial books. Tlie same is true of work register on pages 272, 273 and nipny other examples in ih's book. The Auditor should understand these registers, as well as the ordinary financial books, that he ma;'' know their vela ion lo the finani books and be able to check by calculation many results in the books of account, lie should be able to judge what of such books he may leiive out in making an audi;, and what ones are necessary. It is not ofien that an auditor finds il necessary to investigate every detail in such books of ,ccord at each audit he should not however wholly neglect them, but should check some of them in detail every audit and generally lake a slightly different course at each audit, so that the book-keeper is kept constantly in expectation of any and all parts of his work. If — 330 — '.I n I * ! ill 1^ I': ' ji ■' fcu, nn auditor always follows the same routine in making his audit, a treasurer can if he is dishonest, avoid the beaten traclc of the auditor in any crookedness he niay undertake in his work. Appointment of Auditors. The auditor or auditors of a company are gener- ally appointed by the shareholders at their annual meeting and if this is not done the directors will make the appointment. The auditor should represent the shareholders and look after business done by the officers on behalf of the shareholders. 'I'he business is done mostly by the directors, and the auditor holds the c/icc/k rein on them for the shareholders. It is not proper for the directors to make the appointment. In some companies where the business is largely entrusted to a manager the auditor frequently holds the check rein over the manager on behalf of the directors and shareholders as well. Auditors Duties. The auditor has two distinct lines of duty ahead of him in making an audit, (i) to see that all the books and accounts are correctly and properly kept, and (2) to see that the property of the company is in its possession, to represent the accounts Under the first heading we will give a number of points for the auditor in making examinations of books. Our list is not exhaustive, it however covers most of the ground. (i) Examine the Cash Book on the Dr. side as to the receipts and compare with it such orders, accounts, memoranda of sales, and other papers of original entry, &c., as are available, to see that the receipts of cash are correctly entered both as to the amount and the account to which it is credited. (2) Examine the Cr. side of the Cash Book and compare with it all vouchers for payments. These would consist of an endorsed cheque, drawn to the order ot the person having a claim against the company, a receipted account, or a receipt. (3). With the above receipts there should be compared the account, or bill, or invoice rendered, showing what the payment was for ; and right hero might arise the question as to whether the expenditure was a legal one and in accordance with the by- aws of the company. (4) Besides the voucher and account for each payment mentioned in nos. 2 and 3, the payments should be authorized by the directors. This should be done by resolution recorded in the minute book and by initials of directors placed on the account or bill. See minute book pages 76-80. (5) He will compare journal entries with accounts, ori jinal entries, and with vouchers, i\:c., and the authorization ot the board of directors where he deems necessary. (6) He will check over all auxilliary books with entries, and Cash Books, Journals, Sales Books, &c., with the Ledger,&c., so as to satisfy himself of the mechanical correctness of the work. In this checking process colored ink or pencil otherwise than black should be used, and a ckeck mark placed at each entry so as to determine (i)that all entries in Journal, Cash Book, <"\:c.,are correctly posted, and, (2) to see that no entries have been made in the Ledger, without there being first an entry for it in Journal, Cash Book, &c. Such check mark may be made y/ or V or some letter may be used in its place and if checking has to be djne a second time make a line across the check mark or letter. (7) See that profits, lo^ses, ex| enses, &c., are correctly entered and estimated and that no payment that should be applied to current expenses is allowed to be capitalized that is treated as a valuable asset of the company. (8) He should be careful to ascertair. that there are no outstanding liabilities left out of the books and that all assets are represented in the books and that such assets and liabilities are correctly represented in the statement. (9) He should check over sufficient of the cal- culations for journal entries, &c., and of Interests, Discounts, X:c., to assure himself of the general correctness of them, and of calculations of interests, &c., in inventoiies, Stock Sheets, iSrc. (10) He should see that the books are properly closed, and place his initials r — 3.V — on the principal working accounts.it such c'osing. ( 1 1) He should place initials or check marks large and plain on all vouchers, receipts, ^c, and especially on notes, drafts, hills of exchange, dehentures, coupons, iVc, to jjreveiit their heing used a sc^iond time and it is a good plan to place the year on the voucher as well as the initials. (12) He should carefully ascertain that all the transacti>ns have been duly recorded in the hooks, and that no transactioii has been entered more than once. (13) He should not be called upon to make out balance sheet statements, Ike, for the company. He should verify thtir correctness and sign them. These statements should be in as plain a language as possible. They are intended to explain and not to cover up or mystify transactions. He should have a keen appreciation of the special showing of each statement and prepare or have prepared additional statements if he think it desirable in the best interests of the shareholders. For example, the Profit and Is of any ^i/L• inaik llicir goods both as to cost and selling price. Sciuu' men h.uits mark li nh cost and selling price in private marks, so that a <;ust()iner caniiol deled either priee. 'i'lie most common way of marking cost is to employ letters to represent liie figures, i'or an aid to the memory a key-word is chosen containing ten letters, all different, and a figure is assigned to each letter. li 1 a (■ k s t on e. n o \v he ([ u i c k. I 2 .^ 4 5 r. 7 S Q o. 1234567890. Marking is usually done in a fractional form, the selling price below and the cost ai)ove : thus if the cost was marked on '"Hlackstone" and the selling price on "Now be ([uick," goods tliat cost $,5.75 and sold for $4.35 would be marked by letters thus t $3-75 a. t k. $4.35 b. w e. To make the mark a little more difficult lo fuid out another letter is sometimes added to prevent the repetition of letters where the same figure is repeated— this letter is called a repeater. Suppose we choose \ ns a repeater and we were going to write $2.25 on the key-word "Hlackstone," instead of writing il " 1.1k" we would write "l..\k," the x de- noting the same figure is the one that was 'n fore it. 'I'here are many key-words and sentencis to he found. Among those in co inon use we give the following; Hagers. towh \V. Gladstone, Baul)/ir .11, St. /iini/ace, Milvtrton, Ridgeti r, Gospel Hymn, eas/i projit, come a id buy. .\r!)itrary characters may be made to rej ". the figures. One of the easiest and most usrful is foinied by arranging the figurcb .. j spaces formed by two imes being thrown aero.ss other two lines. The characters are formed from the part of the cro.ss lines containing the figure in the key : 1 ^.±U- -J. J. 7, /J, a./7.L. C.r, • A , X- It will be noticed that by a change of position of the figures in the squares a com- plete change of the character representation can be produced, and these changes can be made an imlefmite number of times. The following is o.ne change : 4^ The foUowin;,' two sets of arliitrary characteis will also be found useful for marking : Arbitrary Characters. 333 Index to Forms of Books and Papers. AKKiDAViTaatoliiisinessoftlicprciiioscdcoiiipany II proving sigimlurts lo petition for let- ters palont .... .... .... 11 verifying signatures to stock book . . . " II a copy of the slock book . . II initialing 213 II insurance coinpuniea 220-231 " municipal worli 2J)4 M oi'gani/..itiuu account and capital, im- pairment of 150 II plant 88 II profit and loss 267 II rest 1">7 II stock 140 II special for building societies 253-255 II suspense 215 Act, Dominion Companies 7 II Ontario Joint Stock 27-55 II respecting the limited liability of iucor porated companies II respecting liability of directors Adiuatinent of losses Attidavits Annual investment table M II problems iu Assessment schedule 43 44-4(i 225 (it), 67, 1 1 1 325 32(i-7 236 Assetsand liabililies 107, 168, 173, 178,240,2(J7,3()t) II II II for municipalities 20S II examination of 331 Assignment of policy 223 Assouiati >ns, building society loan 241 II corporation 268 II safety mutual fire insurance 228 Attorney, signature by 60-70 Auditing 328 II books of accounts or financial books 320 II books of registry 320 Auditor, the 328 II qualifications of 328 II appointment of 330 II duties of examination of books 330-331 II II II assets 331 Auxiliary books 210 Balance sheet, preliminary 80 Banks, book-keeping for 284 11 bills receivable 285 I, bills for collection 285 II deposit account 285 II II receipts 285 II discount and exchange 285 ,1 MiMchants l>ank 285 II posting fi'itni casii journal 2S6 Banking 278 Bank note cii dilation 282 Bonds ISO, 265 II entries for tlu; i.ssuo of 100 II 1. for investors 10l> Bondholders w. sharelioldfi-s 101 Books of accounts, auduing 329 Book, teller's balance 20(1 Bjok-keeping for churciies 200 II II of insurance 228 II II joint stock <,oinpany 40 n of registry, auditing 320 II examination of, auditing 330 331 II changing from singlo, to double entry 21 1 II of original entry 200 II principal and auxiliary 210 II suudry points relative to manufacturing 275 II suitable for business where large num- bers of men are employed 120, 134 II suitable for manufacturing and jobbing work 270-274 II taken over out of balance 214 Business of banks 283 By-laws 81-82 Cancellation register Calls on stock Capital authorized II paid up II stock II subscribed Cash book " " for church purser s teller's 237 6, 14, 70, 71, 80, 180-0 6 6 11 () 05 to 00, 126, 234, 260. 261 200-3(K) 143 Checking otl' property S'jjf Changiag books from single to double entry 207 Charier, application for 51, 64 Church accounts, description of 290-307 " book-keeping , 200 " cash book 209-300 " ch ingiiig to double entry SO" " contribution Circulation, bank note Companiej i^' Companies, amalgamation of i ' \^^ " the books of 'm " closed and open 146 " dissolution of corporate 175 " formation of a joint stock insurance 226 " " " mutual insurance 227 " loan and building societies 241 " mutual, insure on the cash plan 226 " the powers of 11 Compound interest 323 " " problems in 326-327 tables 324 Collecting taxes on instalment plan 898 Co-operative associations m Contract book, details of m Corporations, djfinition 1 •' division 6 " eleemosynary " private 5 " public B " quasi 5 Cream book 85-86 DEHENTt'KES 180,265 " entries for the issue of 100 " " " investors of m Delivery order 308 Definition, joint stock company 51 Difference, lietwcen sides of trial balance, look- ing for amount of 199 — 335 — 330 331 ' 211 209 210 J75 237 !), 180-9 tt 6 11 U 200. 201 2!m-3(H) 143 28S 2l3 ^ 297 51, 04 299-307 299 299-300 307 3(M) 2S2 220 172 14 145 175 ce 220 227 241 226 11 323 1320-327 324 298 2(i8 134 5 5 5 5 5 5 85-86 |89,2()5 1!M) ISM) 30S 51 3k- 199 Deposit ledger 264 " receipts 264 " " register 265 " receiving of money on 279 Description of accounts ^^ church 305 '* of churcii capital account 305 " of debt fund account 300 " of evangelistic fund account 305 " of foreign mission fund 30() " of working account 305 " of otiier accounts 306 Directors 1 1 " for prestige 192 liability of 17 " liability account 44-46 " powers of 13 Directions to the student for beginning joint stock company book-iieeping 113 Dividends 6 Dividend book 105, 147 " proper and improper 153 " stock • 152 " wet and dry stock 1 18 " improper niethads of getting profits 154 " estimating for a ^ 154 " unclaimed 156 Division of profits 268 Docket, the 271 Domicile, service of process 18 Do not make rash changes 214 Dues and fines register 256 Kntky, changing books from single to double 211,297,307 Errors in trial balances 199-205 " in addition 'M) JOstiniate of revenue and expenditure 'i9 1 Expense, as a resource 155 Exi)iry register - 238 Extra risks, fire insurance 223 Fees Figure posting Financial books, auditing " statements Fire insurance Formation of joint stock insurance company mutual " " 50 210 223 164, 2(!6 221 240 226 227 (lOVEBNMENT report " of the society (irain warehousing 111,227 252 307-308 Impairment of capital 101, 1S4, 185, 171179 Incorporation of a buihling society L'51 " insurance company 220 " joint stock company 49-84 Initialing books, accounts, &c. 213 Instalment list 70 " plan of collecting taxes 298 " receipt 71 Interpretation of Dominion Act 7 " Ontario Act 27 Insurance 220-240 " control of 220 fire 221 " renewal of 223 " two or more policies on same property 224 Insurance, re-insuranre of 224 " companies 226 " book-keeping of 228 " special accounts in book-keeping 229 Inventorio- 60 " liability 103 " resources 163 " book 163 Investment of money with loan and savings societies 2(i3 JoliKNAL, the 87, 89-95 Journalizing, taking short cuts 2iHi Leixier, the 100-104 " deposit 264 " physicians' 310 " private 219 " s^metiiing posted tu wrong side 199 stock 108-110, 145, 146, 148 " various styles of 217-219 Letters patent 7, 27-42 " Act, Ontario JointStockCompanie843,55 " supplementary 7 Liability, double 145 " inventories lti3 " of shareholders 16 Liabilities exceed assets i 292 " two classes of - 293 Liquidation, points regarding 176 " winding up a cv,.npany forced by creditors into 177 " voluntary 179 Losses by fire, adjustment of 225 Loans, record book 262 Loaning money 280 Memoranda of trinsactions 57, 113, 121, 135 2S6 Minute book 76-80 " " various styles of recording 76 Miscellaneous information . 144 Money Ioj.iiing 280 Municipal boak-keepiug 29| " " the accounts of 294 Mutual companies insure on the casii plan 22(j XK(!l.I(iENCE 224 N"otes re companits 1 17 Notice for publication in "Gazette" 64 Office time and pay book 132, 133 Officers elected annually 291 " appointed by the council 291 Ordinary books •< 252 Onler, delivery 308 Organization 62 " account, impairment of 161, 184, 185 171 179 " various conditions of company 180-9 Othes busiuesi of banks 283 311 50, 311-316 311 311 311 311 311 311 PaRTNF.KSIIU'S " versus slock companies " definition " community of profit " who may be a partner " a general partner " silent " " " limited " — 336 — « II II II (I (I Partnershipe, a nominal partner " how foraied partner by implication " " oral contract " " written " registration of agreonieut contribution of capital division ot profits salary based on profits ownership of invested capital powers oi partners acts a partner must not do liabilities in case of insolvency dissolution by expiration of time " on completion of work " by mutual consent " by sale of partners interest " death or incapacity of partners " bankruptcy of a partner " decree of the court division of assets liabilities of retiring partner " advertising dissolution " registration of notice of dissolution ' ' powers of partners after dissolution „ settlements ,, problems in Pay fheet Petition for incorporation . Physician's daily record " annual ledger Plant 88, Policy assignment of " cancellation " " register Posting separately the month's business Powers of the company " of directors Premium note or undertaking " and interest register President, voting powers of Private marking of goods Problems in compound interest " " annual investments " " partnerships •' " settlements Profit and loss, account " " division of Property checking ofl' " who may insure Propositions, various re resources and liabilities " from creditors' standpoints " sundry " for formation of' stock co. No. 1 3i*2 312 S12 S12 312 ni o »> ! o .31:) 3i:i 314 314 314 314 314 314 315 315 315 315 315 315 316 3)0 310 310 310 310 317 131 56 309 310 277 2-_'3 224 231 2U0 11 13 228 258 84 332 327 327 ■320 322 267 268 213 225 171 172 172 ISI 2, 3 182 4,5 183 184 7,8,9 185 10 ISO " " " " " " " 11 187 Ct 11 ti (< tt tl (t 1*2 i^u Prospectus of spnngvale creamery company 03 Provisions of act as to existing companies 19 " " " general 19, 20, 21,22 Public notice of intention to apply for incorpor'i'u 55 326 .•;26 317 321, 6, 6S, 69, li ,:.' " closing '2 ■' of Canada stone c(>. 6 " (i( s,ie,iiiil,i.)at set 10 " cluH'kiiig ()\er 151 I " oi banking 1!>2; Transfer book lOS, 145, 146, I'Si '• of sloc'.i ')(), 100, 151 I " from one pliici' lo aii'jiliei iriOJ Time bouk f )r fincrni ;i . , 6j " " and pay l]i TriinsloeatioM of nuMiliers | •>.>•> i ' -'.h' '• \VakkiioIsk receipt r.,'; ; I ^ " delivery order ",.., ' Warehousing i f i;rain ~\~ Wf.rking of a sociely I! -J .'63 57, 113 60 121 I.*I5 •.Ml.i :.'.S(i 7!, 75 HC, I! 12 L'L'4 i;;o 13L'-3 274 I. -to, 1-iO 2.S8 •jdl -'01 L'()2 MM, l