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 JAN 2 7 1928 
 
THE BUSINESS MAN'S 
 ENCYCLOPEDIA 
 
 A Hip-Pocket Business Counsellor — A Pigeon-Hole Legal 
 
 Adviser — An Office Hard- Nut Cracker — A Commercial 
 
 Britannica — A Business Man's Guide Book, 
 
 Combined Into Two Volumes — As full 
 
 of facts and useful information as 
 
 a plum pudding is of plums 
 
 COMPILED BY 27 EXPERTS 
 
 Who have worried about as you have worried about — worked 
 
 over as you have worked over — solved as you want 
 
 to solve — the vexatious business questions 
 
 and legal points these two little 
 
 volumes so readily answer 
 
 ^ 
 
 >^^ 
 
 THE SYSTEM COMPANY 
 CHICAGO 
 

 ^/^^ dl^uJ^ 7^- ^-^ 
 
 COPYRIGHT 1905, BY 
 THE SYSTEM COMPANY 
 
CONTENTS 
 
 VOLUME I 
 
 BOOK I — BUSINESS LAW— 1-97 
 
 Contracts i 
 
 Sale of Personal Property 5 
 
 Torts 7 
 
 Commercial Paper 9 
 
 Partnership 14 
 
 Banks and Banking r6 
 
 Agency 20 
 
 Corporations 23 
 
 Insurance 34 
 
 Landlord and Tenant ... 39 
 
 Carriers 41 
 
 Exemption Laws 44 
 
 Chattel Mortgages 50 
 
 Acknowledgement of 
 
 Deeds 60 
 
 Wills 62 
 
 Bankruptcy Law 63 
 
 Department of Commerce 
 
 and Labor 64 
 
 Patent Office Procedure. 66 
 
 Copyright Law 71 
 
 Legal Holidays 75 
 
 Labor Legislation 78 
 
 Eight Hour Law 79 
 
 Passport Regulations 83 
 
 Naturalization Laws 86 
 
 Postal Laws 89 
 
 BOOK II — BUSINESS METHODS — 98-156 
 
 Correspondence 98 
 
 Collections 105 
 
 Bookkeeping 107 
 
 Price Marks 1 1 1 
 
 Investments 1 1 1 
 
 Shorthand 114 
 
 Mail Order Business 116 
 
 Fire Insurance Adjust- 
 ments 118 
 
 Costs 126 
 
 Window Dressing 131 
 
 Signs 134 
 
 Advertising 136 
 
 Short Cuts 150 
 
 S5C0i9 
 
Digitized by the Internet Archive 
 
 in 2007 with funding from 
 
 IVIicrosoft Corporation 
 
 http://www.archive.org/details/businessmansencyOOchicrich 
 
Xne Susmess Man a Encyclopedia 
 BOOK I 
 
 BUSINESS LAW 
 
 An eminent lawyer has said that it is astonishing 
 within how small a space all the principles of commer- 
 cial law can be compacted. These laws are generally 
 clear and non-technical, being the actual practice of the 
 business community, expressed in rules and maxims, 
 and invested with the authority of law. 
 
 CONTRACTS 
 
 The most important subject embraced in the di- 
 vision, "Commercial Law," is that of Contracts, nearly 
 every act common to business being some form or 
 modification of a contract. 
 
 A contract is a deliberate agreement between com- 
 petent persons upon a legal consideration, to do or ab- 
 stain from doing a particular thing. 
 
 Competency and Incompetency. — The common rule 
 is that any person of legal age and of a sane mind may 
 enter into a binding contract if he does so voluntarily 
 and freely. Common law and most statute laws fix a 
 person's age at 21, but in a few of the states a female 
 becomes of age at 18 or when married. Of the many 
 conditions of incompetency or disability rendering per- 
 sons incapable of makirg binding contracts, the fol- 
 lowing are the ones generally accepted: (1) Minority; 
 (2) insanity; (3) idiocy; (4) alien belligerency; (5) 
 duress; (6) drunkenness to an extent that the ordinary 
 faculties are not in operation. 
 
2 yBUSWESS MAN' 8 ENCYCLOPEDIA. 
 
 The contracts of minors are not absolutely void, but 
 voidable, if they choose, although an infant may bind 
 an adult to a contract. The party making a contract 
 with a minor is bound, if he himself is competent, and 
 cannot rescind it without the minor's consent. It is 
 optional with the infant, only, or his representatives, 
 to avoid the contract. For example, a minor may affirm 
 or rescind a contract made before his majority, within 
 a reasonable time after becoming of age. Even when 
 a contract has been executed, an infant may disaffirm 
 it, as in the case of a sale of an article, he may re- 
 claim it by tendering the purchase price. However, if 
 minors are without parents or guardian, they may be 
 held for all contracts for necessities of life, and some 
 authorities contend that they may be held for all con- 
 tracts. Necessities of life are generally construed to 
 mean clothing, food, shelter, medical services and an 
 ordinary education as determined by the minor's actual 
 condition. 
 
 Proposition and Acceptance. — A proposition is a 
 mere offer made to one person by another, and may be 
 either oral or written. An acceptance is an assent to 
 the offer made and completes the bargain. There can 
 be no agreement without a proposition and an accept- 
 ance, this being legally known as "a meeting of the 
 minds," an essential to every contract. When a propo- 
 sition is made orally, in order to be binding the ac- 
 ceptance must be immediate or within such a time as 
 the parties had in contemplation, unless a definite 
 period of time in which to accept or reject is stipulated, 
 but such proposition may be withdrawn before the ex- 
 piration of the stipulated period if not accepted before- 
 hand. If the acceptance is to be written the proposi- 
 tion is accepted as soon as the letter is placed in the 
 mail or telegram is left with the telegraph company. 
 
 Necessary Elements. — Every contract must contain 
 the five following essential elements in order to be 
 binding: (1) Parties thereto must be competent to con- 
 tract; (2) there must be consideration expressed or im- 
 plied; (3) a certain thing to be done or not to be done 
 ^aust constitute the subject matter; (4) mutual assent 
 
BUSINESS LAW. 3 
 
 must be present; (5) there must exist an agreed period 
 for the performance of the contract. 
 
 Classification and Kinds of Contracts. — The majority 
 of contracts are included in the class parol contractSf 
 or those not made under seal, as opposed to specialties, 
 or those contracts, as mortgages, bonds, leases, etc., 
 made under seal. A contract under seal is one that has 
 a seal in connection with the signature, which seal may 
 be a small wafer or scroll, or an imitation thereof, 
 printed or made with the pen. A specialty contract 
 needs no consideration either expressed or implied, as 
 neither party can deny the facts concerning the con- 
 tract. However, the seal is gradually going out of use, 
 the law not now attaching the same degree of im- 
 portance to its use as formerly. 
 
 There are eight kinds of simple contracts, given and 
 defined as following: Expressed contracts are those 
 positively stating the terms of agreement. Implied 
 contracts are those the terms and conditions of which 
 are not all either oral or written, and which in case of 
 dispute, the law will interpret, basing its decision upon 
 the probable intention of the parties. When the con- 
 sideration is implied, the law grants what is just and 
 reasonable. Executed contracts are those the stipula- 
 tions of which have already been complied with. 
 Executory contracts are those which are to be per- 
 formed at some future date. Oral contracts are those 
 made by means of spoken words in contradistinction to 
 contracts in writing. Written contracts are those the 
 conditions, terms, and other essentials of which are in 
 writing. Joint contracts are those in which all the 
 parties are jointly bound to support the terms and con- 
 ditions stipulated. Several contracts are those binding 
 each party to the performance of the whole obligation. 
 
 Statute of Frauds. — This statute, enacted in England 
 In 1677 and re-enacted in part or in whole with various 
 modifications in all the United States, states that all 
 contracts must be in writing when , having any of the 
 following conditions: (1) For the sale of any interest 
 in lands; (2) leases of land, except in certain cases, for 
 one year or more; (3) if not by their own terms to be 
 performed within one year; (4) if made upon consid- 
 
4 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 eration of marriage, except mutual promises to marry; 
 (5) to answer for the debt, default or miscarriage of 
 another; (6) for the sale of goods, chattels or things 
 In action for the sum of $50 or more (amount differs 
 in different states), unless the purchaser receives a part 
 of the thing or pays part of the purchase price, or the 
 sale be by auction. 
 
 Besides lawful contracts^ or those made in goo(? 
 faith by competent parties which the law will enforce, 
 there are various other contracts not lawful and hence 
 not to be enforced. Unlawful contracts are those in 
 violation of the law where made and are void every- 
 where. Illegal contracts are those contrary to the acts 
 of government. A contract to obstruct a lawful busi- 
 ness would come in this class. Fraudulent contracts 
 are those operating as an injury to or a fraud on a 
 third person. Transfer of property before making an 
 assignment to creditors comes under this head. Im- 
 moral contracts embrace those opposed to the moral 
 welfare of a community, as a contract to commit adul- 
 tery, or desecrate the Sabbath, etc. The law will not 
 rescind nor enforce an executory contract of this na- 
 ture. 
 
 Interpretation and Construction. — In construing con- 
 tracts, the intention of the parties must govern; words 
 are to be taken in their natural and obvious sense; 
 when the intention is doubtful the context may be re- 
 sorted to to explain ambiguous terms; the whole of 
 the instrument is to be viewed and compared in all its 
 parts, so that every part of it may be made consistent 
 and effectual. Where the language of an agreement is 
 plain and unequivocal, there is no room for construc- 
 tion, and it must be carried into effect according to its 
 plain meaning. Ambiguities in deeds or other instru- 
 ments are generally interpreted against the grantor, or 
 contractor. 
 
 Performance. — A person who undertakes to perform 
 a piece of work by special contract, must perform his 
 contract before he is entitled to his pay. If a person is 
 hired for six months, or other definite time, and leaves 
 before the end of it, without reasonable cause, he loses 
 his right to wages for the period he has served. But 
 
BUSINESS LAW. 5 
 
 if he is dismissed without cause he can recover for the 
 whole term — at its expiration. It is no sufficient cause 
 for abandoning one's contract, that he was put upon 
 work not contemplated at the time the contract was 
 made, but if he is prevented by sickness from laboring 
 during the stipulated period, he may recover for Jiis 
 services as much as his services were worth, for the 
 time he labored. 
 
 Specific Performance. — The law side of the court 
 cannot enforce the specific performance of a contract. 
 It can only allow damages for the failure to perform, 
 or for breach. On the equity side of the court, certain 
 contracts may be enforced specifically. They most com- 
 monly relate to the sale of real property. 
 
 Rescinding. — In general, a contract cannot be re- 
 scinded, unless by consent of both parties, except in 
 case of fraud. A party having a right to rescind a con- 
 tract, must exercise the right within a reasonable time. 
 
 Where parties agree to rescind a sale once made and 
 perfected without fraud, the same formalities of de- 
 livery, etc., are necessary to revest the property in the 
 original vendor, which were necessary to pass it from 
 him to the vendee. A contract required by law to be 
 in writing cannot be dissolved by verbal agreement. 
 
 Damages. — Each party to a contract is legally bound 
 to perform his part or pay damages to the extent of 
 loss sustained. While it is not possible in exceptional 
 cases for the law to compel a specific ^performance of 
 a contract, it does require a money payment to the 
 extent of injury incurred, in lieu of non-performance. 
 
 SALE OF PERSONAL PROPERTY 
 
 Contracts of Sale. — This is governed by the same 
 principles of law as other contracts. 
 
 Sale. — A sale is the transfer of the title in the thing 
 sold from the vendor to the vendee in consideration of 
 a certain money price. It assumes absolute immediate 
 transfer. The elements that are essential to a valid 
 sale are: (1) The thing or subject matter of the sale; 
 (2) the price; (3) the mutual consent of the parties 
 who have the ability to contract. 
 
6 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 Subject Matter. — That which is to be sold must have 
 either an actual or potential existence and must be ca- 
 pable of delivery, though it may not come into existence 
 until after the date of sale. The subject of a sale must 
 be legal to be valid. 
 
 Price. — Price is the consideration given by the pur- 
 chaser in exchange for his property inducing the seller 
 to part with the ownership. To constitute a sale the 
 price in money, or its equivalent, must be a definite and 
 certain sum or be capable of determination, as the 
 "market price." The general rule is that the parties 
 can agree upon any price they choose. 
 
 Consent of the Parties. — ^Without a mutual consent 
 of both parties to the terms of the contract there can 
 be no sale. A mistake in regard to price, identity of 
 goods, or the like, will destroy the sale. 
 
 iVIode of Making Contract. — At common law no 
 formality is necessary to the making of a sale. The 
 seller and the buyer agree upon the price, which the 
 buyer pays, the seller thereupon delivering the goods, 
 thus completing the sale. A binding contract to sell for, 
 and to pay, a certain price, however large, was good at 
 common law, and remains good now, in all cases where 
 the price is not large enough to bring the contract 
 within the statute of frauds. See Statute of Frauds, 
 (6) under Contracts, 
 
 Transit of Goods. — ^When the purchaser lives remote 
 from the seller the goods should be sent as the buyer 
 directs. No directions for shipment being given, seller 
 ships by the customary route. Ordinary care protects 
 the buyer from loss sustained in the transit. 
 
 Stoppage Goods on the Way to Purchaser. — The 
 seller of goods, under certain conditions, has a right 
 to stop goods that are in a carrier's hands and on the 
 way to the buyer at some distant point. This is termed 
 stoppage in transit. 
 
 Defects. — Should there be any defects in the prop- 
 erty or animals, which can be seen, that does not re- 
 lieve the buyer from meeting his obligations, though 
 he claims not to have seen the defects. But if the 
 defects can not be seen and the seller recommends the 
 
BU8INE8S LAW, 7 
 
 property as good or sound, the buyer is relieved from 
 filling his part of the contract. 
 
 Warranty. — If the seller of goods makes any asser- 
 tion respecting the kind, quality, or condition of the 
 article upon which he intends the purchaser should rely 
 as a fact, and upon which he does rely, that is a war- 
 ranty. Where goods are sold by sample there is an im- 
 plied warranty that the goods correspond with the 
 sample. 
 
 It is a general rule that the employer will be bound 
 by the warranty of his clerk or shopman, if acting with- 
 in the scope of his authority. 
 
 Warranty must be at the time of sale; if it be made 
 after, it is void for want of consideration. 
 
 Fraud on Part of the Buyer. — If the buyer has been 
 guilty of such fraud as entitles the seller to rescind the 
 sale; or if the buyer is actually insolvent; or if he has 
 misrepresented his condition or made false pretenses 
 in buying; or if he be so embarrassed that in reason- 
 able probability he cannot pay for the goods, the seller 
 has a right to stop them in transit. 
 
 If the goods were sent to pay a debt of the seller's 
 they cannot be stopped. 
 
 Sales at Auction. — A public sale of property to the 
 highest bidder is an auction sale and must be so con- 
 ducted that free and fair competition may be had. By- 
 bidding and combination bidding is unlawful and ren- 
 ders the sale voidable at the option of an honest buyer. 
 
 Sale of "Good-Will." — By good-will is meant a man's 
 business or the business of a firm as distinguished from 
 the stock in trade or capital. It is the reputation which 
 a firm acquires by their business methods. A pur- 
 chaser of a business including the good-will should in- 
 sist upon a contract specifying the amount he shall re- 
 ceive as damages should the seller become interested 
 in a competing business. 
 
 TORTS 
 
 The word tort is used to describe that branch of the 
 law which treats of the redress of injuries, which are 
 neither crimes nor arise from the breach of contracts. 
 
8 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 This branch of the law is of growing interest to the 
 business man because of the frequent institution of 
 suits by employes for damages incurred in service. 
 
 Doctrines of Ordinary Prudence. — Ordinary prudence 
 is generally that course of conduct which prudent per- 
 sons take for the safety and protection of their own 
 persons from an injury which is liable to occur to them 
 in the place and under the circumstances which sur- 
 round them. This is opposed to negligence which must 
 be shown by the plaintiff in an action for damages. 
 
 Liability of Employer. — A master owes to his serv- 
 ant certain inalienable non-assignable duties peculiar 
 to that relationship, based in general upon the duty not 
 to expose him to unnecessary or unreasonable risks. 
 The servant has a right to assume that his employer 
 has performed these duties. They consist in the exer- 
 cise of reasonable care with reference to (1) providing 
 and maintaining suitable appliances, machinery, and 
 places to work; (2) providing proper fellow servants in 
 sufficient number; (3) making and promulgating rules 
 for the regulation of servants and giving warning and 
 instruction especially to youthful and inexperienced 
 employes with reference to danger; (4) inspecting ap- 
 pliances, machinery, and places to work, supervising 
 fellow servants, and securing the observance of rules. 
 However, a master is liable only for failure to exercise 
 reasonable care in the performance of his duties to his 
 servant. He is not an insurer. 
 
 Ordinary and Extraordinary Risks. — The law as- 
 sumes that a servant possesses ordinary knowledge of 
 and will exercise ordinary prudence in the occupation 
 which he undertakes and, excluding the negligence of 
 fellow servants, assumes the ordinary risks of his em- 
 ployment. If the risks of an employment are extraor- 
 dinary and are knowingly assumed by the servant, he 
 cannot recover from his employer. 
 
 Strikes and Boycotts. — Webster's Imperial Diction- 
 ary defines a strike as, "The act of workers in any 
 branch of industry discontinuing work with the object 
 of inducing their employer to concede certain demands 
 made by them; sometimes marked by violence on the 
 part of those striking or their sympathizers, or by active 
 
BU8INE8S LAW, 9 
 
 attempts to injure the business of the employer, as "by 
 boycott, intimidation, and the picketing of the employ- 
 er's place of business to prevent the employment ot 
 other help, and to dissuade those employed from re- 
 maining at work.'* In order to come within the law of 
 torts and be actionable as such, strikes and boycotts 
 must have as essential elements (1) A combination of 
 persons to do harm to another; (2) malicious intent; 
 (3) damage to complainant. The common-law right of 
 laborers to combine and use peaceful means to advance 
 their interests, and, more specifically, the price of labor, 
 has been generally broadened by statute. When such 
 a statute extends the common-law rights as to combina- 
 tions of labor, the courts recognize corresponding 
 changes in the rights of employers to combine to resist 
 employes. Employers' unions, formed in opposition to 
 employes' unions are lawful, not being made to lower 
 the price of labor. As regards the act of strikers leav- 
 ing in a body, such is held to be a combination in itself 
 wrongful and illegal. The intent to injure another with- 
 out lawful provocation must, however, be clearly shov/n. 
 Legal authorities are not in accord as to what con- 
 stitutes a (legal) voluntary association and an (illegal) 
 boycott. The rule having most ample support, is that 
 while a trader may lawfully engage in the sharpest 
 competition with those in a like business by holding out 
 extraordinary inducements, by representing his own 
 wares to be better and cheaper than those of others, 
 yet when he oversteps that line, and commits an act 
 with the malicious intent of inflicting injury upon his 
 rival's business, his conduct is illegal, and if damage 
 results from it, the injured party is liable to redress. 
 
 COMMERCIAL PAPER 
 
 Negotiable Instruments. — Practically every written 
 contract or agreement involving the payment of money 
 is negotiable in the sense that the owner can sell it to 
 another and that the purchaser can enforce it to the 
 same extent that the original owner could if he had not 
 assigned it. Bonds and mortgages, contracts for sales, 
 leases, etc., would be negotiable, but in the strictest 
 
10 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 sense there are but three forms of negotiable commer- 
 cial paper in common use — checks, promissory notes, 
 and bills of exchange or drafts. 
 
 Form. — While there is no regular prescribed form 
 for these instruments, there are certain orderly forms 
 which are usually followed and there are certain pre- 
 requisites without which they are non-negotiable in- 
 struments: (1) They must be in writing (ink, pencil, 
 or type impressions), and signed by the maker or 
 drawer; (2) they usually state the place and date of 
 making; (3) they must be payable on demand, at a 
 fixed time, a determinable future time or at a time cer- 
 tain to occur; (4) the promise to pay must be uncon- 
 ditional and "to order" or "to bearer," and in money; 
 (5) a place of payment is usual, if not stated, the place 
 or business or residence of the maker or the acceptor 
 or drawee is assumed; (6) they must not show any 
 alterations — erasures or additions — on their face; (7) 
 they must not carry on their face any information that 
 would lead a prudent man to inquire further as to their 
 validity; (8) the time of payment expressed in the in- 
 strument must not have passed. 
 
 Consideration. — It is not positively necessary to ex- 
 press consideration in negotiable papers, but it is best 
 to do so. In the hands of an innocent holder the law 
 assumes that there was a valuable consideration. 
 
 Promissory Notes. — A promissory note is a written 
 promise to pay a certain sum of money at a specified 
 time. There are three kinds, individual promissory 
 noteSf or those made by one party to pay another a 
 certain sum of money at a specified time; joint promis- 
 sory notes, the same as the foregoing, only signed by 
 two or more parties, in which case all are liable jointly 
 but not severally; joint and several promissory notes, 
 in which two or more parties severally and separately 
 agree to pay a certain sum at a specified time. Each 
 signer of such note is responsible for the whole pay- 
 ment. 
 
 Negotiability. — A paper is made negotiable by the 
 words "or bearer," or "or order." In the former case 
 endorsement is not necessary or customary except in 
 
BUSINESS LAW. 11 
 
 the case of forwarding banks; in the latter case it is 
 negotiable only by the endorsement of the payee. 
 
 Holder for Value. — Negotiable paper passing into the 
 hands of an innocent holder for fair and full considera- 
 tion and in good faith carries with it a good title, pro- 
 viding (1) The instrument is negotiable; (2) was ob- 
 tained in good faith and for a valuable consideration 
 before maturity; (3) the purchaser must not be aware 
 of any legal or equitable defense. 
 
 Parties tq Negotiable Instruments. — The rule gov- 
 erning the capacity of a party to incur liability on com- 
 mercial paper is the same as that holding good regard- 
 ing contracts. 
 
 Protests. — A protest of a note is a formal statement 
 by a notary that the paper was presented for payment 
 and payment refused. When a note is not duly paid on 
 presentation, it is said to be "dishonored" and is taken 
 to a notary puhUCr who again presents it, and, if not 
 paid, he notes its non-payment, and afterwards draws 
 up a formal protest, that legal proceedings may be 
 taken for recovering the amount due. Should there be 
 indorsers and no protest is made, the indorsers in some 
 states are released. 
 
 The holder of a note may give notice of protest 
 either to all the previous indorsers or only to one of 
 them; in the latter case he must select the last in- 
 dorser, and the last must give notice to the la^t before 
 him, and so on. 
 
 Where notice of protest is duly addressed and de- 
 posited in the postoffice, the sender is deemed to have 
 given due notice, notwithstanding any miscarriage in 
 the mails. 
 
 Where days of grace are allowed by statute on notes, 
 they are not considered due until the expiration of the 
 days of grace. If a note is presented and payment de- 
 manded on the last day of grace, and payment refused, 
 the maker is in default, and notice of dishonor may 
 forthwith be given to the indorser. For days of grace 
 allowed by the statutes of different states, see Interest 
 Laws and Statutes of Limitation. 
 
 A note made payable at a bank and held there for 
 payment until the usual hour for closing, need not be 
 
12 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 presented to the maker in person to bind the indorser. 
 It may be protested, as in the case of drafts, imme- 
 diately on the close of bank hours. Payment must be 
 immediately demanded of the indorser if he resides in 
 the same place; if he is a non-resident he must be noti- 
 fied at once by letter. 
 
 Presentment Not Necessary to Render Maker Liable. 
 — Presentment for payment is not required in order 
 to charge the maker of a note. 
 
 Suitdays and Holidays. — When the day of maturity 
 falls upon Sunday or a legal holiday the note is payable 
 on the next succeeding business day. 
 
 By Whom Demand May Be Made. — The holder of a 
 note or any one acting for him may make the demand 
 for payment and send notice of dishonor to the in- 
 dorsers. Usually the holder or his agent notifies all 
 the parties on the note. This is the most business-like, 
 as well as the most prudent way, as it renders all par- 
 ties responsible to him, and each responsible to each 
 other in their order. Extending time of payment by 
 the holder releases the indorsers of the note, unless 
 consent to such extension has been given by the in- 
 dorsers. 
 
 The finder of a note, as of all other property, must 
 make reasonable efforts to find the owner, before he is 
 entitled to appropriate it for his own purposes. If the 
 finder conceal it, he is liable to the charge of larcency 
 or theft. 
 
 Interest. — A note which does not state on its face 
 that it bears interest, will bear interest only from ma- 
 turity. If the words "with interest" are included in a 
 note it draws the legal rate of interest from the date of 
 making, but if the note is to draw a rate of interest 
 higher than the legal, but not higher than the statute 
 of the state allows, the rate of interest must be speci- 
 fied. 
 
 Death of a Holder.— After the death of a holder of 
 a negotiable note, his executor or administrator may 
 transfer it by his indorsement. 
 
 When Right of Action Expires.— The statute of limi- 
 tations begins to run from the day the right of action 
 accrues. See Interest Laws and Statutes of Limitation, 
 
BUSINESS LAW, 13 
 
 Checks. — A written order on a bank directing a cer- 
 tain amount of money to be paid to a person named, 
 or to his order, or to him "or bearer," or simply to 
 "bearer," is called a check. This is the simplest form 
 of negotiable paper and requires no set form of word- 
 ing; any intelligibly written demand, dated, made by a 
 depositor, correctly signed, is a check and will draw the 
 money. 
 
 Forged Checks. — A bank pays every check at its own 
 risk, and in case of the payment of a forged check, must 
 stand the loss. 
 
 Certified Check. — A check is said to be "certified" 
 when it bears the signature of the cashier or other 
 competent oflacer, together with the word "certified," 
 thus signifying that the bank guarantees the check. 
 The amount for which it is drawn is immediately de- 
 ducted from the drawer's account. 
 
 "With Exchange." — Checks drawn with the words 
 "with exchange" after the amount in writing are usually 
 cashed without extra charge by the bank at which pre- 
 sented, the cost of collection being paid by the drawer. 
 Banks usually discourage the use of these checks. 
 
 Kinds of Indorsement. — Following are the various 
 kinds of indorsement: An indorseTnent in hlanlc names 
 no indorser, and is payable to bearer. A special irir 
 dorseinent specifies the party whose indorsement is es- 
 sential to the negotiability of the instrument A re- 
 strictive indorsement is one designating one party and 
 no other to whom the paper shall be paid, or one use 
 to which it shall be put, as "Pay A only," or "For de- 
 posit only in the Citizens' National Bank." A qualified 
 indorsement is one including the words "without re- 
 course," or its equivalent, so limiting the usual liability 
 of the indorser. A conditional indorsement is one di- 
 recting payment contingent upon a certain occurrence. 
 
 Kinds of Drafts. — A sight draft is one drawn by one 
 person on another and payable when presented or at 
 sight. Time drafts are similar to sight drafts, but are 
 drawn payable a certain number of days after presenta- 
 tion and require acceptance by the party against whom 
 they are drawn. Such draft must be accepted by the 
 drawee who signs his name across the face, accom- 
 
14 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 panled by the word "accepted," thus making it the same 
 to all intents and purposes as a promissory note. It 
 matures so many days after acceptance, not after the 
 date on which it is drawn. A bank draft is the order of 
 one bank to pay a certain person a given sum, and is 
 the most convenient method of transferring money. 
 
 PARTNERSHIP 
 
 Nature and Formation. — A partnership Is the con- 
 tract relation subsisting between persons who have 
 combined their property, labor or skill in a lawful en- 
 terprise or business for their common profit. The part- 
 ners make up the firm which is commonly held to be 
 an entity the same as a corporation, though the law 
 generally regards the partners as joint owners of the 
 firm property. 
 
 Kinds of Partnership. — A general partnership is one 
 in which the parties thereto agree to enter into a spe- 
 cified business, no limitations or conditions being fixed. 
 A special or limited partnership is one in which there 
 may be general partners with unlimited liability and 
 special partners whose liability is limited upon the 
 compliance with certain requirements. 
 
 Kinds of Partners. — An ostensible partner is one who 
 Is known to the world as such. A secret partner is one 
 who is not openly or generally so declared. He is not 
 liable for debts contracted after his retirement, al- 
 though he has given no notice of the same. A dormant 
 or silent partner is one who takes no part in the trans- 
 action or control of the business, but shares in the 
 profits and losses according to certain agreements. A 
 nominal partner is held out to the world as such with- 
 out actually participating in the profits and losses of 
 the business. 
 
 Formation of Partnersliips. — All persons who are 
 legally competent to do business for themselves may 
 enter into partnership which may be formed by a mere 
 verbal agreement and stand in law, but a written agree- 
 ment is the one to be preferred. The parties may agree 
 as they please as to sharing profits or losses, but in 
 the absence of writing to prove the contrary the law 
 
BUSINESS LAW. 15 
 
 will assume that partners share profits and losses equal- 
 ly. The articles of agreement should be drawn up with 
 special care in writing the details of conditions, liabili- 
 ties and proportionate share of profits or loss fully 
 stated. 
 
 How Soon a Partnership is in Force. — It is presumed 
 that a partnership commenced at the time the articles 
 of copartnership are drawn unless otherwise stated. 
 
 Use of Name in PartnersFiip. — ^When a partner with- 
 draws from a firm, but allows his name to be used as 
 before, or if one lends his name to a firm, in either case 
 he is held responsible to third persons as a partner. 
 
 Suing Partners. — It is generally supposed that one 
 partner cannot sue another. This is not wholly true. 
 A partner can sue for a balance due him after settle- 
 ment of general accounts or for a balance dite him on 
 some specific account. It is, however, best to appeal to 
 a court of equity, for that court can do for partnership 
 what the law cannot do. 
 
 DISSOLUTrON OF PARTNERSHIP- 
 
 A partnership may be dissolved by mutual consent, 
 by expiration of predetermined time, by death of one 
 of the partners, by insanity, by the bankruptcy of either 
 partner, or by the court for any good cause, such as dis- 
 honesty of one partner against the rest, or incapacity 
 caused by habitual drunkenness or conviction of any 
 crime. A partner may withdraw at any time if no time 
 for the continuation of the partnership is mentioned in 
 the articles of agreement, but he must give due notice 
 of his intention to the other partners. If the time for 
 the continuance of the partnership is mentioned, a part- 
 ner can nevertheless withdraw at any time, but he is 
 responsible to the firm for damages caused by the 
 breach of his promise. If a partner dies the surviving 
 partners alone have the right to settle up the business. 
 To his heirs and legal representatives they need only 
 to render an account of the business. 
 
 Notice to be Given. — Upon the dissolution of a part- 
 nership by mutual consent it should be indorsed on the 
 articles of copartnership and a notice given in some 
 
16 BUSINESS MAN'S ENCYCLOPEDIA, 
 
 prominent newspaper. Special notice should also be 
 sent to each one of the creditors of the firm. 
 
 Authority of Partners. — As a general rule the whole 
 firm and each member of it is bound by the acts and 
 contracts of one partner, because in law the act or 
 contract of one is regarded as the act of all. Each is 
 regarded as the agent of all without any express au- 
 thority being given. Thus, loans, purchases, sales, as- 
 signments, pledges, or mortgages effected by one part- 
 ner on the partnership account, and with good faith 
 in the third party, are binding on all the firm. So is 
 also release by one a release; notice to one is notice 
 to all; demand of one is demand of all. In matters, 
 however, not connected with the partnership, but in- 
 tended for his own personal interests, the firm is not 
 bound. 
 
 Liability of the Several Partners. — For the payment 
 of partnership debts the property of the firm, both real 
 and personal, as also that of each individual partner, 
 is held responsible for amount of the unpaid partner- 
 ship debt. 
 
 Individual Debts of Partners. — A partner having in- 
 dividual debts makes the firm liable for such debts for 
 his interest in the firm after the firm debts are de- 
 ducted, the firm liabilities always having precedence. 
 
 Liabilities of a New Partner. — A new partner enter- 
 ing a firm cannot be held for firm debts contracted prev- 
 ious to his admission. 
 
 Sale of Partner's Interest. — An assignment of inter- 
 est by one partner must be assented to by the other 
 partner or partners. 
 
 BANKS AND BANKING 
 
 A bank is an institution organized for the purpose 
 of receiving deposits of money, making loans, discount- 
 ing paper, making collections, and effecting the trans- 
 mission of money from one place to another. 
 
 Different Classes of Banks. — Banks are divided gen- 
 erally to five classes: Banks of deposit, of discount, of 
 circulation, of exchange, and savings banks. Banks of 
 deposit receive money to keep for the depositor until 
 
BUSINESS LAW. 17 
 
 he draws it out, by checks payable to himself or to 
 others. Banks of discount are occupied in discounting 
 promissory notes and bills of exchange, or in lending 
 money on security. Banks of circulation issue bills or 
 notes of their own, intended to be the circulating cur- 
 rency or medium of exchange, instead of gold and 
 silver. The notes or bills of national banks are guar- 
 anteed by the government, which holds as security 
 bonds belonging to the bank to a still larger amount 
 than their issue of bills, or, as commonly termed, their 
 ^'circulation." The government also retains a five per 
 cent fund for immediate redemption. Banks of ex- 
 change receive money on deposit, and, instead of pay- 
 ing it back to the depositors, make payments by drafts 
 on other banks. They keep money on deposit at the 
 principal trade centers; thus money can be sent to 
 different points at small expense and without risk. 
 They charge one who desires to remit, a small amount 
 for their services, and sell him their draft on the place 
 to which the remittance is to be sent. Savings hanks 
 make a specialty of receiving for deposit relatively 
 small sums of money, paying a small rate of interest 
 thereon. 
 
 A bank may combine two or more functions of banks 
 described above, being at the same time a bank of de- 
 posit and discount, etc. Savings banks are usually a 
 department of a bank of circulation or exchange. 
 
 PRIVATE BANKS. 
 
 Organization. — Private banks are organized in the 
 same manner as ordinary partnerships. They may be- 
 long to an individual or a firm. 
 
 Functions. — The business of private banks varies in 
 different localities. In many cases they possess the 
 principal functions of national banks; in other cases 
 their attention is directed only to special features of 
 banking such as the buying and selling of foreign ex- 
 change, stocks and bonds, etc. 
 
 Protection to Creditors. — In a few states private 
 banks are restricted in their operations by statute, in 
 which case they are subject to the inspection of state 
 
18 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 oflacials, but usually their operations are regulated and 
 restricted only by the common laws of business. 
 
 STATE BANKS. 
 
 How Organized. — State banks are organized under 
 the laws of the state in which they are located, the 
 preliminary steps being much the same as those in 
 organizing national banks. 
 
 Circulating Notes. — Prior to July 1, 1866, state banks 
 issued notes which circulated as money, but on that 
 date the government imposed a tax of 10 per cent on 
 the circulation of all state banks, which had the effect 
 of withdrawing the circulation, as the rate was to high 
 to allow any profit to the banks. 
 
 Difference Between State and National Banks. — Na- 
 tional banks are organized under the National Bank 
 Act, are under the supervision of the general govern- 
 ment and alone issue circulating notes, while state 
 banks are organized under the laws of the various 
 states, are subject to the state statutes, and do not 
 issue circulating notes. The advantages claimed by 
 state over national banks is that they are not re- 
 stricted so closely in their business methods as na- 
 tional banks. 
 
 NATIONAL BANKS. 
 
 A national bank is a bank organized under an act 
 passed by Congress, entitled "The National Bank Act," 
 and in addition to doing a general banking business, it 
 has authority to issue circulating notes against bonds 
 deposited with the Treasurer of the United States. The 
 government does not own nor control the bank, but 
 only authorizes its creation and prescribes the mode 
 of doing business. Every banking association doing 
 business under this act is governed by the same prin- 
 ciples, is subject to the same inspection, uses the same 
 forms in making reports to the comptroller at Wash- 
 ington, and is liable to the same penalties for the vio- 
 lation of any requirement of the national banking law. 
 
 Powers. — National banks have power to adopt and 
 use a corporate seal; to have succession for a period 
 of twenty years; to make contracts; to sue and be 
 
BUSINESS LAW. 19 
 
 sued; to elect directors, and by its board of directors 
 to elect officers; to make all needful by-laws not in con- 
 sistent with the national bank act; to discount and ne- 
 gotiate notes, drafts, bills of exchange, etc.; to receive 
 deposits, buy and sell exchange, coin and bullion; to 
 loan money on personal security; and to issue and cir- 
 culate its own notes. 
 
 Stockhalder's Liability. — The liability of each stock- 
 holder of a national bank is to the par value of stock 
 owned, in addition to the amount invested in such 
 stock. 
 
 Real Estate. — ^National banks are prohibited from 
 holding real estate other than the buildings in which 
 they do business and land mortgaged to secure a loan 
 which was made in good faith upon personal security. 
 
 Reserve. — National banks are required to keep on 
 hand at all times a lawful money reserve equaling 25 
 per cent of the deposits if in a large city, and 15 per 
 cent of the deposits, if located in a small city. 
 
 Overcertifying Checks. — National banks are pro- 
 hibited under severe penalty from certifying a check in 
 excess of a depositor's account. 
 
 Surplus.— Each national bank shall accumulate a sur- 
 plus by setting apart one-tenth of its net profits before 
 declaring any dividend, until the surplus equals 20 per 
 cent of the capital stock. 
 
 Reports to Comptroller. — Banks must make at least 
 five reports to the comptroller during the year. 
 
 LOAN AND TRUST COMPANIES. 
 
 How Organized. — Loan and trust companies are or- 
 ganized by a number of persons, usually ten or more, 
 under the laws of the various states. 
 
 Kinds of Business Transacted. — These companies 
 usually receive deposits and make loans, but as a rule 
 they do not undertake the collection of commercial 
 paper. They act as agents for corporations in trans- 
 ferring stocks and bonds, make investments, collect in- 
 terest, act as trustees, receivers, executors, administra- 
 tors, etc. Many companies have boxes in fire and burg- 
 lar proof safes which they rent to customers desiring 
 
20 BUSINESS MAWS ENCYCLOPEDIA, 
 
 a safe place for tlie keeping of valuable papers, etc.; 
 others make a business of examining and insuring titles 
 to real estate. 
 
 Clearing Houses. — A clearing house is the place 
 where the representatives of certain banks, associated 
 for the purpose, meet, and, under the supervision of a 
 committee or officers selected by the members, settle 
 their accounts with one another and make and receive 
 payment of balances. 
 
 Each bank in its daily dealings receives many bills 
 of other banks, and checks drawn on them, so that at 
 the close of the day's business every bank has in its 
 drawers various sums due to it by other banks. It is, 
 in like manner, the debtor of other banks which have 
 received its bills and checks. These sums due by and 
 to the banks among themselves are at the clearing 
 house set off against each other and the balances paid 
 or received. 
 
 AGENCY 
 
 Agency is the relation existing between two or more 
 persons, arising out of a contract giving authority to 
 one to represent the other in business transactions. A 
 person who so represents another is called an "agent;" 
 the one whom he represents is known as the "prin- 
 cipal." 
 
 How Created. — The contract which creates the 
 agency may be a formal writing under seal, as a power 
 of attorney, or it may be a written agreement, or a 
 letter of instructions, or a verbal agreement or ap- 
 pointment, or it may be implied from facts and cir- 
 cumstances. 
 
 Who IVIay Act as Principal or Agent. — Any one who 
 is competent to do business for himself may act as 
 principal, and appoint an agent to transact it for him. 
 Persons who cannot do business for themselves may, 
 however, be appointed to act as agents. Therefore 
 minors and married women may act as agents. 
 
 Extent of Authority. — The employing of an agent 
 is the act which gives him his authority. An agent 
 
BUSINESS LAW. 21 
 
 has authority to do whatever is necessary or generally 
 done in connection with the purposes for which he is 
 employed. 
 
 Kinds of Agency. — There are several kinds of agency, 
 the first division of which is into special and general; 
 second, limited and unlimited; third, factor and broker. 
 A special agency is an agency to do a single act. A 
 general agency is one in which the agent is delegated 
 authority to do anything about a particular business.^ 
 Limited agency is one in which the agent is bound by 
 particular instructions, and applies to a general agent, 
 restricting his authority. Unlimited agency is the power 
 of a special agent, giving him authority to use any means 
 he may find necessary to accomplish the thing to be 
 done. A factor is one who has the property of his prin- 
 cipal ill his own possession for sale, and is commonly 
 termed a commission merchant. A broker is one em- 
 ployed to negotiate sales between the buyer and the 
 seller. He does not have possession of the goods or 
 property which he negotiates, nor has he any authority 
 to sell in his own name. 
 
 Liability of Principal. — The principal is responsible 
 for the acts of his agent committed in the execution of 
 the agency and which are within the real or apparent 
 scope of the principal's business. A distinction is here 
 made between a special and a general agent. If a 
 special agent exceeds or disobeys his instructions the 
 principal is not liable; but if a general agent exceeds 
 his authority the principal will be bound, if the act is 
 within the apparent scope of an agent's authority, when 
 it is such an act as is natural and usual in transacting 
 business of that kind. By appointing him to do that 
 business, the principal is considered as saying to the 
 world that his agent has all the authority necessary to 
 transact it in the usual way. For any criminal act, how- 
 ever, of the agent, the principal is not responsible un- 
 less he directly commands him to commit it. 
 
 Wrongful Acts of Agents. — In case of wrongs and 
 injuries (torts), the general rule is that the principal is 
 liable to third persons for the wrongful acts of the 
 agent when acting within the scope of his agency. But 
 
22 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 this does not relieve the agent of personal liability him- 
 self. 
 
 The Agent's Liability. — (1) To Ms Prinoipah An 
 agent is bound in transacting the affairs of his princi- 
 pal to exercise all the care which a reasonable man 
 Would exercise in his own, and to the utmost good 
 faith. For any loss to the principal through neglect or 
 unfaithfulness, the agent is liable to him. (2) To the 
 Third Party, If an agent conceals his character as an 
 agent, or transcends his authority, or otherwise so 
 conducts himself as to make his principal responsible, 
 or if he expressly binds himself in any way, he is him- 
 self liable to the third party. 
 
 Accounting. — The principal may call his agent to an 
 account at any time, and may recover full indemnity 
 for all injuries sustained by reason of the positive mis- 
 conduct or negligence of the agent, or by his transcend- 
 ing his authority. An agent is not liable to his prin- 
 cipal for not accounting until demand, which demand 
 should be made at his residence, and sufficient oppor- 
 tunity given him for payment. 
 
 Compensation. — As against the principal, an agent 
 is entitled to compensation for his services, and reim- 
 bursement for the expenses of his agency, and for per- 
 sonal loss or damage in properly transacting the busi- 
 ness thereof. 
 
 Sub-Agents. — An agent may himself appoint another 
 agent and act through him. Such a person is called a 
 sub-agent, and is responsible to him who has appointed 
 him, as his principal. In most commercial transactions 
 sub-agents may be employed. 
 
 IVIixing Property. — If an agent mixes his own prop- 
 erty with that of his principal, so that it cannot be 
 identified, it will all belong to the principal. 
 
 Responsibility to Third Party. — Ordinarily a person 
 can only be responsible for his own acts, but an agent's 
 act is really considered as that of his principal. There- 
 fore the rule is that the principal is responsible for the 
 acts of his agent. The principal is bound even though 
 he was unknown at the time the act was done, because 
 he is supposed to derive the benefit of the same. 
 
BUSINESS LAW. 23 
 
 Notice to Agent. — A notice to an agent is generally- 
 considered notice to the principal, but to have that ef- 
 fect, it must have relation to the agency business, and 
 come within its scope. It must also be at the time he 
 is acting as agent in relation to the very thing about 
 which the notice is given. 
 
 Dissolution of Agency. — There are three ways in 
 which an agency may be dissolved: (1) By a revoca- 
 tion of the power of the agent by the principal; 
 (2) by a renunciation of power by the agent; (3) by 
 operation of law. 
 
 Revocation. — This may take place at any time the 
 principal's authority has not been executed in any part; 
 at such time as desired by the principal if there is an 
 express agreement that it shall be revocable; or at 
 such time as such revocation will not work a hardship 
 upon the agent. 
 
 Renunciation. — The 'agent can renounce the author- 
 ity of the principal at any time, but not without mak- 
 ing himself liable to the principal for all the damages 
 and losses he sustains in consequence of the renuncia- 
 tion, except where it is a gratuitous and purely volun- 
 tary agency. 
 
 Operation of Law. — An agency may be terminated by 
 operation of law: (1) By lapse of time, as where it was 
 created for a year and the year expires; (2) by change 
 in the condition of either party producing incapacity 
 to act. 
 
 CORPORATIONS 
 
 A corporation is an association of individuals au- 
 thorized by law to act under a corporate name as a 
 legal being. It is by far the most convenient and effect- 
 ive form of combination where a number of persons 
 wish to unite their efforts, their resources, or any part 
 of either for some common purpose. Hence there are 
 corporations of many kinds, business, municipal, re- 
 ligious, charitable, educational and others, each with 
 features neculiar to itself. The business corporation 
 and the usages relating to it are of recent growth and 
 were called into being to avoid the many and serious 
 disadvantages of the common partnershipo 
 
24 BUSINESS MAWS ENCYCLOPEDIA. 
 
 Incorporation and Copartnership. — There are prac- 
 tically only two ways in which persons can associate 
 themselves for business purposes, incorporation and co- 
 partnership. The great advantages of incorporation 
 are: (1) The limited liability of stockholders in case 
 of the insolvency of the corporation; (2) the ease and 
 simplicity with which an interest in the business is 
 acquired or disposed of by the purchase or sale of 
 stock certificates; its permanency, notwithstanding the 
 change, death or insolvency of its members. 
 
 Tine Business Corporation. — A business corporation 
 is one formed to carry on some manufacturing, mining, 
 or mercantile enterprise. In New York, transportation, 
 banking, and insurance companies are excluded from 
 this classification and have laws and usages of their 
 own. In most of the other states the same distinction 
 exists, although not so sharply outlined. The restricted 
 application of the term "business corporation," makes 
 the laws relating to it comparatively well defined and 
 easily understood. While details may vary in the dif- 
 ferent states, the general system is the same in all. 
 The general characteristics of the business corpora- 
 tion or company are as follows: (1) It is created by 
 a charter granted by the state and cannot come into 
 existence by mere agreement among its members. Its 
 peculiar advantages can be had only through a charter, 
 and this charter is secured by following the forms 
 prescribed by the state laws. (2) It has a stock capi- 
 talization divided into shares — usually of a like amount 
 — and evidenced by transferable certificates of stock. 
 These are issued to its members — termed stockholders. 
 (3) The liability of the stockholders is limited to the 
 amount of their subscriptions to its stock, and after 
 this has been once paid, no further claim can be made 
 upon either of them by the corporation or its creditors 
 — though there are minor exceptions to this general 
 rule. 
 
 The Charter. — A charter, or certificate of incorpora- 
 tion (the terms are equivalent), authorized by the 
 state, is necessary to create a corporation. It is an in- 
 strument granting to certain specified persons and their 
 successors the right of acting as a corporate being or 
 
BUSINESS LAW, 25 
 
 corporation. Under general laws all applicants com- 
 plying with the prescribed forms and requirements may 
 become incorporated for any of the usual business pur- 
 poses. An individual or firm may do anything not for- 
 bidden by the law but a corporation has no such legal 
 right. If it were incorporated to manufacture bicycles, 
 it could not lawfully without amendment of charter, un- 
 dertake the manufacture of automobiles. Any contract 
 made by a corporation in excess of its charter powers 
 cannot be enforced in the courts and the execution of 
 the same might be prevented by injunction at the suit 
 of any of its stockholders. As a matter of fact and 
 ordinary practice corporations do go beyond their pow- 
 ers very frequently, and unless some stockholder or 
 creditor of the company objects, the state alone has the 
 right to interfere. Also, of late years, particularly with- 
 in the states of New York, New Jersey, Delaware and 
 West Virginia, so much latitude is allowed in specify- 
 ing charter powers that almost any possible contract 
 would be within the charter bounds. 
 
 Charter Powers. — A modern business corporation 
 under a liberal charter will have all the following pow- 
 ers: (1) To have continuity of existence under its cor- 
 porate name for the term stated in its charter; (2) to 
 litigate, to sue and be sued, in all respects as an in- 
 dividual; (S) to use a corporate seal; (4) to buy, sell 
 and hold property, real and personal, as may be neces- 
 sary or convenient in its business; (5) to appoint di- 
 rectors, officers, and agents to manage and conduct its 
 affairs; (6) to make by-laws for the management of 
 its affairs and the conduct of its business; (7) to have 
 a capital stock, divided into transferable shares — usually 
 of equal amount; (8) to dissolve itself; (9) to carry 
 on its special business. 
 
 Application for Charter. — The first step in organiz- 
 ing a business corporation is to prepare the formal ap- 
 plication for incorporation. While the details of this 
 vary in each state, the essential features are the same. 
 The parties applying must be able to contract. They 
 must be natural persons^ hence a corporation, being an 
 artificial person, could not join in an application to 
 charter another corporation. Some states impose re 
 
26 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 strictions as to citizenship. In some states but three 
 persons need join; in others five or more are required. 
 The essential features of the application are as follows: 
 (1) The name of the corporation; (2) the location of 
 the principal oflSce or place of business; (3) the object 
 or objects of the corporation; (4) the amount of the 
 capital stock; (5) the names and addresses of sub- 
 scribers and amounts subscribed by each; (6) the 
 duration of the charter; (7) any special provisions. 
 
 Liability. — Corporations are liable for contracts made 
 by their duly authorized agent within the scope of his 
 authority, as well as for trespasses or torts committed 
 by such agent under authority of such corporations. 
 
 Directors of a corporation are liable to the stock- 
 holders whenever there has been gross negligence or 
 fraud, but not for unintentional errors. 
 
 The stockholders are individually liable to the cor- 
 poration's creditors to extent fixed by statute under 
 which the company is incorporated. Usually they are 
 not made liable beyond the amount of stock held by 
 them. 
 
 CAPITAL STOCK. 
 
 The capital stock of a company is the amount, as 
 estimated by the incorporators, required for the pur- 
 poses of the business. Authorized and fixed by the 
 charter, it can be changed only by amendment of that 
 instrument. It is divided into shares, the face value 
 of which is usually one hundred dollars, though the 
 matter is discretional with the incorporators and other 
 amounts are often chosen. Generally the state laws 
 require that a certain minimum amount of the capital 
 stock be subscribed and in some states paid in, before 
 the corporation may begin business; thereafter addi- 
 tional stock may be issued as required, up to the charter 
 limit 
 
 Unissued Stock.— This is in itself a nullity, it Is 
 merely the right to issue stock if subscribers can be 
 found, and until so issued represents nothing. 
 
 Issued and Outstanding Stock. — This is stock actu- 
 ally subscribed for and the subscriptions accepted by 
 
BUSINESS LAW, 27 
 
 the company, and, usually, for which stock certificates 
 have been duly made out and delivered to the sub- 
 scribers. It is a liability of the company and the sub- 
 scriptions or the cash and property received should be 
 an equivalent asset. 
 
 Full Paid Stock. — Stock which has been subscribed, 
 issued, and fully paid is termed full paid stock, and 
 the words **Full-paid and Non-assessable" should always 
 appear plainly printed upon the face of its certificates. 
 
 Treasury Stock. — This term is commonly but er- 
 roneously applied to unissued stock, or even to stock 
 subscribed but unpaid. Strictly speaking, it is such 
 stock which has been issued, paid for — usually in full — 
 and then by gift or purchase has come back into pos- 
 session of the company. It may be taken in the name 
 of the treasurer, or of a trustee, or may be held in the 
 name of the corporation itself. In either case it is 
 accounted an asset of the company and may be held 
 or sold at the discretion of the board of directors. 
 When sold below par the purchaser incurs no liability, 
 for the stock if once full paid, remains so. So long as 
 held by the company, it can neither vote nor participate 
 in dividends, but remains lifeless and without rights or 
 powers. It is issued stock, but, being in the treasury, is 
 not outstanding stock. This distinction does not, how- 
 ever, exempt such stock from the franchise taxes im- 
 posed under the laws of certain states, as New Jersey 
 and Delaware. 
 
 Common Stock. — Stock issued without special privi- 
 leges or restrictions — general or ordinary stock — is em- 
 braced in the term common stock. Unless special stock 
 of some kind is issued by the company, all its stock is 
 common stock. The owner of common stock has the 
 right to attend and vote at all meetings of stockholders, 
 to share in the profits of the business, and on the dis- 
 solution of the company, to have his due proportion of 
 the final assets. 
 
 Preferred Stock. — This is a stock issued under an 
 agreement that it is to receive a stated dividend from 
 the profits before anything is allotted to the common 
 stock. It is sometimes called guaranteed stock, though 
 
28 BUSINESS MAWS ENCYCLOPEDIA, 
 
 this term is more properly applied to stock issued by 
 one company with a certain dividend guaranteed by an- 
 other company. 
 
 Preferred stock, unlike a bond, does not in any way 
 represent a debt or liability of the corporation. It is 
 merely an investment; its owners are but stockholders; 
 its dividends, while payable before anything is given 
 the common stock, may be paid only out of profits, and 
 the failure of dividends gives no ground of action 
 against the corporation. For these reasons preferred 
 stock, if it can be sold, is much preferable to bonds as 
 a means of raising money. Should the corporation be- 
 come insolvent, usage as to preferred stock is not uni- 
 form. Under the laws of New Jersey and certain other 
 states, should the assets be sufficient, it is redeemed at 
 its face value, after the debts are paid, and before the 
 common stock receives anything. 
 
 Watered Stock. — That which purports to represent, 
 but does not represent in good faith, money paid into 
 the treasury of the company, or money's worth actually 
 contributed to the working capital of the corporation, 
 is watered stock. For instance, if a certain stock is 
 paying annual dividends of 10 per cent, as much more 
 stock may be issued, giving each stockholder twice as 
 many shares of stock bearing 5 per cent. Companies 
 having municipal franchises for lighting, water supply, 
 street railways, transportation and other semi-public 
 functions, always, as a matter of policy, issue sufficient 
 "fictitious" stock to keep their dividends down to an 
 apparently low figure. In many cases, corporations 
 judiciously "water" their stock to prevent rivals, or pos- 
 sible competitors, from knowing the real profits of the 
 business. 
 
 Generally there is no legal prohibition against the 
 "watering" of stocks, provided no one is defrauded 
 thereby. In many states, however, all such issues of 
 "fictitiously paid-up" stock are prohibited. These stat- 
 utes, however, are frequently evaded. 
 
 Certificates of Stock. — The stock certificate is docu- 
 mentary evidence of ownership of stock in the corpora- 
 tion issuing such certificate, by certifying that the per- 
 son named therein is the owner of record of a certain 
 
BUSINESS LAW. 29 
 
 number of shares of the company's stock. The owner- 
 ship of the stock goes with the certificate and its signed 
 indorsement, but the ownership of record remains with 
 the original holder till the transfer is made upon the 
 books of the company. In the meantime the original 
 holder has power to exercise all the rights of a stock- 
 holder. For this reason transfers should be made with- 
 out delay. 
 
 Subscriptions to Stock. — A subscription to the stock 
 of a corporation is an agreement on the part of the 
 subscriber to take a specified number of its shares and 
 if unqualified, is held to mean at par and for cash. 
 Stock subscriptions may be paid in property, and in 
 most of the states, in labor or services when it has 
 been so agreed. Stock may be issued in this way for 
 mines, factories, patent rights, the good will and other 
 assets of a business, and for any other kind of property 
 that might be purchased for cash. The privilege of 
 safely issuing stock for property is often of the greatest 
 importance in the exploitation of mines, inventions and 
 other speculative enterprises. It is so often abused 
 that in some states it is most rigorously hedged about, 
 and any over-valuation is made dangerous for both the 
 officials of the company and the holders of its stock. 
 
 STOCKHOLDERS. 
 
 The subscribers to the capital stock of a corporation 
 are accounted stockholders even before the permanent 
 organization of the company and the delivery of their 
 stock, and have the right to participate in stockholders* 
 meetings. 
 
 Rights of Stockholders. — The individual rights of 
 holders of common stock are, briefly: (1) To partici- 
 pate in stockholders' meetings, in person or by proxy, 
 and to cast one vote for each share of stock held; (2) 
 to participate, according to the amount of stock owned, 
 in dividends; (3) in the event of the dissolution of the 
 corporation, to participate, in due proportion, in any 
 assets that may remain after paying the corporate 
 debts. The individual rights of holders of preferred 
 stock are governed by the conditions of issue which 
 should be inscribed in full on the face of preferred 
 
30 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 stock certificates. In the absence of conditions, pre- 
 ferred stock carries all the rights of common stock, 
 including participation in stockholders' meetings and in 
 general dividends after the common stock has received 
 a dividend equal to the preferred dividend. 
 
 A stockholder, as such, has absolutely no voice in the 
 management of the company beyond his individual stock 
 vote on matters brought before the stockholders' meet- 
 ings. The subjects upon which action can be taken at 
 these meetings may be summed up as follows: (1) 
 Adoption or amendment of by-laws, and the passage of 
 resolutions; (2) election of directors; (3) amendment 
 of the charter; (4) dissolution of the company; (5) sale 
 of the entire assets; (6) any vital or radical action; 
 (7) exercise of any statutory or specially conferred char- 
 ter powers. 
 
 BY-LAWS. 
 
 By-laws are the permanent rules of corporate action 
 as distinguished from resolutions, which are but tem- 
 porary in their effect and apply only to the particular 
 occasions for which they are passed. 
 
 Sources of Authority. — The general management of 
 a corporation must, as a matter of course, conform to: 
 (1) The constitution and laws of the state of incorpora- 
 tion; (2) the provisions of its charter; (3) the provi- 
 sions of the common or general corporation law; (4) 
 the regulations of its by-laws; (5) the rules of parlia- 
 mentary law so far as applicable. In the by-laws it Is 
 desirable to collate and repeat the provisions from these 
 several sources that bear most directly on the manage- 
 ment and procedure of the corporation. 
 
 irregularities. — Any stockholder or creditor of a cor- 
 poration has the right to demand the regular and lawful 
 conduct of its business, and hence any irregularities of 
 procedure may lead to legal interference. Many irregu- 
 larities in corporation organization and procedure are 
 passed over or legalized by the acquiescence or assent 
 of all the parties concerned, as in the waiving of the 
 legal formalities of the first meeting or, as is often the 
 case in small corporations, the formal regulations are 
 quite commonly waived at convenience. 
 
BUSINESS LAW. 31 
 
 Classification. — By-laws are usually grouped under 
 the following heads: (1) Stock; (2) Stockholders; (3) 
 Directors; (4) Officers; (5) Dividends and Finances; 
 (6) Sundry Provisions; (7) Amendments. 
 
 GOVERNMENT SUPERVISION OF CORPORATIONS. 
 
 The bureau of corporations as a part of the depart- 
 ment of commerce and labor has, as its main purpose, 
 authority "to gather, compile, publish, and supply useful 
 information concerning corporations doing business 
 within the limits of the United States that shall engage 
 in interstate commerce or commerce between the United 
 States and any foreign country, including corporations 
 engaged in insurance." The bureau of corporations has 
 nothing whatever to do with common carriers. It can- 
 not investigate the Standard Oil company's rebate sys- 
 tem on railroads nor the operations of tank cars and 
 ships. It cannot touch private car lines nor any sub- 
 sidiary corporations on railroads by means of which the 
 beef trust, steel trust, and almost every other trust man- 
 ages to do business to the exclusion of smaller rivals. 
 All that belongs to the interstate commerce commission, 
 and the bureau of corporations is by law forbidden to 
 investigate common carriers. 
 
 Trusts. — The modern industrial trust is merely a 
 large corporation composed of a number of smaller cor- 
 porations, enterprises previously separate, and, usually, 
 under independent management. 
 
 Cumulative Voting. — Certain states permit the option 
 of "bunching'* or distributing votes, at the will of the 
 voter. This is permissible in New York, West Virginia, 
 and Pennsylvania, the constitution of the New York 
 law reading, "That at all elections of directors of such 
 corporation each stockholder shall be entitled to as 
 many votes as shall equal the number of his shares of 
 stock, multiplied by the number of directors to be 
 elected, and that he may cast all of such votes for a 
 single director or may distribute them among the num- 
 ber to be voted for, or any two or more of them, as he 
 sees fit, which right when exercised shall be termed 
 cumulative voting,'* 
 
32 BUSINESS MAN'S ENCYCLOPEDIA, 
 
 CORPORATION ACCOUNTING. 
 
 Besides the books of a corporation necessary to re- 
 cord the issues and transfers of shares, there must of 
 course be kept books to record the business transactions 
 of the company. These books, so far as the general 
 business is concerned, are kept the same as for firms 
 not corporations, but differ from them as to the making 
 of the entries affecting capital stock. 
 
 When a corporation is formed it falls into one of the 
 following three general classes, so far as the opening 
 of the books is concerned: 
 
 1. Shares issued for money only. 
 
 2. Shares issued for property or for property and 
 money. 
 
 3. Shares issued for property alone, but where work- 
 ing capital is to be provided by the sale of stock do- 
 nated to the company. 
 
 Entries for Class 1. — Capital stock $15,000, sub- 
 scribed for in equal amounts by Chester Hall, Martin 
 Hanson, and Albert Mann, subscriptions to be paid in 
 full in one amount. 
 
 The journal entry is as follows: 
 
 Subscription, 15000 00 
 
 Capital Stock, 15000 00 
 
 For shares of stock subscribed as follows: 
 Chester Hall, 50 shares 
 Martin Hanson, 50 shares 
 Albert Mann, 50 shares 
 
 As per subscription list dated , 190. .. 
 
 If all the stock is not subscribed for, the capital 
 stock is credited for only the amount &ubscribed for. 
 
 The subscribers having paid in the amounts of their 
 subscriptions, the following entries should be made on 
 the debit side of the cash book: 
 
 Subscriptions, 15000 00 
 
 Amount paid in by subscribers for stock as follows: 
 Chester Hall, $5,000 
 Martin Hanson, 5,000 
 Albert Mann, 5,000 
 
 It is not necessary to open accounts with the in^J- 
 vidual stockholders. 
 
BUSINESS LAW. 33 
 
 In case the subscriptions are not paid in full, but by 
 assessments, as called for, the journal entry debiting 
 Subscriptions and crediting Capital Stock would be as 
 before, and as each assessment, say of 10 per cent., is 
 called for, a journal entry would be made as follows: 
 Assessment No. 1, 1500 00 
 
 Subscriptions, 1500 00 
 
 Being assessment of 10 per cent, on the shares of 
 the company subscribed as follows: 
 
 Chester Hall, $500 
 
 Martin Hanson, 500 
 Albert Mann, 500 
 
 As per resolution of directors adopted , 
 
 190. .. (See Minute Book, page — .) 
 
 When the assessment has been paid to the treasurer, 
 the following entry is made on the debit side of the cash 
 book: 
 
 Assessment No. 1, 1500 00 
 
 Amount paid in by subscribers for stocK as follows: 
 Chester Hall, $500 
 
 Martin Hanson, 500 
 Albert Mann, 500 
 
 This will close the account Assessment No. 1 in the 
 ledger. 
 
 Entries for Class 2. — When stock is issued at par for 
 property, as the assets of a going business, and other 
 stock sold for cash, the various items are debited, the 
 liability items credited, and Capital Stock credited for 
 the net value of the investment. The stock subscribed 
 for to be paid for in cash is treated as in Class 1. 
 
 Entries for Class 3. — When stock is issued for prop- 
 erty, say a mine, and part of such stock is donated to 
 the company to be sold at par to provide working capi- 
 tal, the entries are as follows: 
 
 Mine, 20000 00 
 
 Capital Stock, 20000 00 
 
 Full explanation of issue. 
 Treasury Stock, 10000 00 
 
 Working Capital, 10000 00 
 
 Full explanation of donation. 
 When this is sold, make a journal entry crediting 
 Treasury Stock for the par value of the amount sub- 
 
34 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 scribed for and debiting Subscription to Treasury Stock 
 for the amount of the subscriptions at the price to be 
 paid, and debit Working Capital for the difference be- 
 tween the price paid and the par value of the stock. 
 
 As the subscriptions are paid, debit Cash and credit 
 Subscriptions to Treasury Stock. 
 
 If other stock of the company is sold at par, treat 
 it as in Class 1. 
 
 If stock is sold at a premium, debit Subscriptions 
 for the amount subscribed for at the price sold at, and 
 credit Capital Stock for the shares at par and Working 
 Capital for the amount of premium. 
 
 Every entry should be followed by a full explanation 
 of the transaction. 
 
 INSURANCE 
 
 Insurance is a contract whereby for a stipulated con- 
 sideration one party undertakes to compensate the other 
 for loss on a particular subject for a specified peril. 
 The party agreeing to make the compensation is called 
 the insurer, or the underwriter, the other party to the 
 contract being the insured. The written contract is 
 called the policy, and the event insured against, the 
 risk. 
 
 FIRE INSURANCE. 
 
 Fire insurance is a contract by the insurer to in- 
 demnify the owner or person having an interest in the 
 property insured for loss or damage by fire during a 
 specified period. A policy of fire insurance may be 
 open or valued. By the former, the amount of liability 
 is left to be determined according to the actual loss; 
 by the latter, a certain valuation is fixed above which 
 the insurer is not liable for loss. In the absence of 
 statute or charter provision, the policy may be in any 
 form; but to avoid looseness and ambiguity statutes 
 in some jurisdictions have prescribed the use of a 
 standard policy. 
 
 Insurable Interest. — An interest of such a nature that 
 the fire insured against would directly injure him, is 
 termed insurable interest. If the person had no in- 
 terest in the property upon which he obtained insur- 
 
BUSINESS LAW. 35 
 
 ance, the only object would be a mere speculation, and 
 the contract would not be upheld in law. 
 
 Cancellation. — The standard form of policy contains 
 a stipulation that the policy may be canceled at any 
 time by the company, or at the request of the insured 
 upon giving five days' notice of such cancellation. In 
 case of such cancellation the unearned premiums paid 
 shall be returned to the insured. 
 
 Form of Contract. — The contract of insurance is usu- 
 ally in writing, although it may be oral, unless expressly 
 required by the statute to be written. 
 
 Oral Contract. — The contract is binding and in force 
 as soon as the agreement is completed, although the 
 written policy may not have been actually delivered, 
 nor in fact ever have been issued. 
 
 Notice of Loss. — After a loss it is the duty of the 
 insured to give immediate notice to the company. Un- 
 der the standard form of policy this notice must be in 
 writing. The damaged goods must be inventoried, and 
 a proof of loss duly sworn to must be filed within 
 sixty days. Unless the notice is given as stated and 
 the proof of loss filed within the specified time, no 
 recovery can be had on the policy. 
 
 Effect of Fraud. — A contract of insurance is one re- 
 quiring good faith between the parties, and the party 
 seeking insurance is bound to disclose any circum- 
 stance that will affect the risk. Any fraudulent dealing 
 is fatal to the rights of the party responsible for it. 
 Any concealment of a material fact inquired into by the 
 insurer will, if made intentionally by the insured, avoid 
 the policy. 
 
 LIFE INSURANCE. 
 
 A life insurance contract is, in its simplest form, an 
 agreement upon the part of the insurer to pay a specific 
 sum of money upon the death of a certain person, called 
 the insured, to a specific person called the beneficiary. 
 The consideration paid by the insured is called the pre- 
 mium, and is generally a certain amount payable an- 
 nually or monthly. The agreement may take the form 
 of what is termed an endowment insurance, whereby 
 the insured, after paying the premium for a given num- 
 
36 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 ber of years, will receive a certain sum of money, or 
 if he dies before the expiration of the period, the 
 amount of the policy will go to the beneficiary. The 
 beneficiary, instead of being a specific person, may be 
 the estate of the insured. 
 
 Premiums. — The premiums on life insurance are 
 graded according to the age of the risk. The person 
 insured must undergo a physical examination, as only 
 healthy persons are insured. The amounts of the pre- 
 miums are determined by average results computed 
 upon the length of life of a large number of persons 
 carefully arranged and tabulated. These results so ar- 
 ranged are called "mortuary tables." 
 
 Effect of Concealment. — The contract of life insur- 
 ance, like that of fire insurance, requires the exercise 
 of good faith between the parties, but to avoid the pol- 
 icy the concealment of a material fact not made the 
 subject of an express inquiry must be intentional. A 
 material misrepresentation avoids a policy. 
 
 Form of Policies. — There is no standard form of life 
 insurance policy, and the forms of the different compa- 
 nies vary materially. It is customary to have the policy 
 provide that the application be made a part of the con- 
 tract, thereby making the statements in the application 
 express warranties. So a denial that one is affected 
 with a disease avoids the policy if untrue. The applica- 
 tion often inquires as to what other insurance is car- 
 ried, and a deceptive statement on this point is fatal 
 to the policy. So also a statement as to age is material 
 a,nd the answer must be correct. 
 
 Payment. — The conditions of the policy as to pay- 
 ment of premiums must be strictly complied with or the 
 policy fails, sickness or other inability to pay being no 
 valid excuse. 
 
 Suicide. — If the policy contains no express stipulation 
 to the contrary, the insurance company is liable on a 
 policy if the party insured commits suicide, in case a 
 third party is the beneficiary. If the insured is the 
 beneficiary, the rule will be otherwise. The policy fre- 
 quently contains a clause exempting the company from 
 liability if the insured commits suicide. 
 
BUSINESS LAW. 37 
 
 Notice of Death. — In life insurance the company gen- 
 erally requires immediate notice of death and due proof 
 that the person insured is dead. 
 
 MARINE INSURANCE. 
 
 Marine insurance is a contract by which the insurer 
 agrees to indemnify the insured against certain perils 
 or risks to which his ships, cargo, and profits may be 
 exposed during a certain trip or during a specified time. 
 
 Effect of Fraud. — The requirement of good faith be- 
 tween the parties is even greater in marine insurance 
 than in any other branch of insurance. The reason for 
 this is that the insured has every opportunity to know 
 all of the facts and the insurer but limited opportunity 
 to determine them. A concealment or misrepresenta- 
 tion of a material fact either innocently or fraudulently 
 avoids the contract. 
 
 Warranty. — A warranty, as in fire insurance, must 
 be strictly performed. In marine insurance there are 
 three implied warranties which are understood in every 
 contract. They are in respect to seaworthiness, devia- 
 tion, and legality. Seaworthiness is the condition of a 
 ship when reasonably fit to perform the services and 
 encounter the ordinary perils incident to the voyage. 
 The second implied warranty is that there shall be no 
 voluntary deviation or departure from the course fixed 
 by mercantile usage, for the voyage contemplated by 
 the policy; and also that there shall be no unreason- 
 able delay in commencing or making the voyage. The 
 third implied warranty is that the voyage shall be legal, 
 both in its nature and in the manner in which it is prose- 
 cuted. Smuggling voyages and trading trips to an 
 enemy's port are cases of illegal voyage. 
 • Losses. — The loss may be total, in which case the 
 whole insurance is ordinarily recoverable; or it may 
 be partial, and then only a pro rata part can be recov- 
 ered. 
 
 CASUALTY INSURANCE. 
 
 Casualty insurance is an indemnity against loss re- 
 sulting from bodily injury or the destruction of certain 
 kinds of property. It may be accident insurance, which 
 
38 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 is an indemnity against personal injury by accident, or 
 it may be one of the numerous classes of insurance 
 that have sprung up within the past few years, granting 
 indemnity against almost every conceivable form of 
 catastrophe. Among these special forms of casualty 
 insurance may be mentioned plate glass, boiler, tornado, 
 employer's liability, fidelity, credit, and title insurance. 
 
 Accident Insurance. — Accident insurance is a branch 
 of life insurance, the latter insuring against death by 
 any cause, while the former insures against death or 
 injury caused by accident. This class of insurance 
 usually provides a certain payment in case of accidental 
 death, a weekly indemnity for either permanent or total 
 disability by reason of accident, and a fixed sum for 
 such permanent injury as the loss of one or both of 
 the hands, feet, or eyes. An accident in this sense is 
 an unforeseen event which results in injury to one's 
 person. 
 
 Fidelity Insurance. — Fidelity or guaranty insurance 
 is a contract by which an employer is insured against 
 loss by the fraud or dishonesty of his employees, being 
 a guarantee of the honesty of an employee. Fidelity in- 
 surance companies also issue bonds guaranteeing the 
 faithful performance of contracts, as those executed by 
 persons holding places of trust. 
 
 Credit Insurance. — Credit insurance protects mer- 
 chants and tradesmen from loss through the insolvency 
 or dishonesty of their customers. For a certain pre- 
 mium the insurance company guarantees the merchant 
 against bad debts. The merchants must usually bear 
 a certain small per cent, and all losses over that amount 
 are paid by the insurance company. 
 
 Title Insurance. — Title insurance is a guaranty to 
 the owner of real property that his title is clear. It is 
 an insurance against defects in the title to the property 
 insured, and in case of loss by reason of liens or incum- 
 brances prior to the interest of the insured, the com- 
 pany indemnifies him. 
 
 Plate Glass Insurance. — Plate glass insurance Is an- 
 other branch of casualty insurance frequently employed, 
 the premium being based upon the cost price of the 
 windows. 
 
BUSINESS LAW. 39 
 
 Elevator Insurance. — Elevator insurance consists of 
 a contract which covers the risk incidental to the use 
 of elevators, including both the damage to the elevators 
 themselves and to persons or property that may be in- 
 jured by the use of, or by accident occurring to, such 
 elevators. 
 
 Steam Boiler Insurance. — This insurance covers in- 
 jury to property or persons by reason of the explosioD. 
 of steam boilers. 
 
 LANDLORD AND TENANT 
 
 Leases. — By the statute of frauds in most states the 
 lease must be in writing, if for a longer time than one 
 year. Generally, if for one year or less it may be made 
 orally, and this is true even though the term is to com- 
 mence at a date in the future. In a few states leases 
 can be made for only a limited number of years, while 
 in others a lease for more than a certain number of 
 years must be recorded. 
 
 Covenants. — Aside from the above provision;^ any 
 further agreement between the parties may be incor- 
 porated in the writing. A lease is but a contract, and 
 the full agreement of the parties should be set forth. 
 Frequently the following covenant is inserted: "The 
 party of the second part hereby covenants not to sublet 
 said premises, or any portion thereof, without the writ- 
 ten consent of said party of the first part." 
 
 Term. — The term of the lease is the time for which 
 it is to run. If the tenant has been in possession under 
 a lease for one or more years, and he retains possession 
 without executing a new lease, he is presumed, in the 
 absence of some agreement, to be a tenant from year 
 to year, which means that his term after the expiration 
 of the lease is one year, and if he remains in possession 
 after the next year he is a tenant for another year. 
 
 Express and Implied Covenants. — The covenants con- 
 tained in a lease are either expressed or implied. The 
 Implied covenants exist whether they are mentioned or 
 not; the express covenants must be included in the ex- 
 press conditions of the lease, and may be many or few. 
 The implied covenants, on the part of the lessor, are 
 
40 BUSINESS MAN'S ENCYCLOPEDIA, 
 
 those regarding quiet enjoyment and the payment of 
 taxes. The usual words of grant in a lease are "demise 
 and lease," or "grant and demise," these words being 
 said to import a covenant of quiet enjoyment. This cov- 
 enant is broken when the tenant is evicted by some one 
 who has a paramount title. The landlord also impliedly 
 covenants that he will pay all taxes assessed against the 
 premises during the term. There is no implied cov- 
 enant on the part of the lessor, or landlord, that the 
 premises are in a tenantable condition. On the part of 
 the lessee, or tenant, there is an implied covenant that 
 he shall pay the rent stipulated for; and, although no 
 sum is specified in the lease, the tenant must pay a rea- 
 sonable rent, unless it appears that it was the intention 
 of the parties that none was to be paid. The lessee 
 also impliedly to keep the premises in ordinary repair. 
 
 Rights and Liabilities Under a Lease. — Aside from 
 the covenants in a lease there are certain rights and 
 liabilities which arise from the relation of landlord and 
 tenant. In the absence of an agreement to the con- 
 trary the tenant is entitled to the exclusive possession 
 of the premises. He is liable for waste and is estopped 
 from denying his landlord's title; that is, the tenant can- 
 not for any purpose claim that the premises do not 
 belong to his landlord. The landlord is under no obliga- 
 tion to repair unless the lease expressly binds him to 
 such duty. And he is entitled to the fixtures annexed 
 to and made a part of the realty. 
 
 Assigning or Subletting of Lease. — Unless the tenant 
 is restrained by an express covenant against subletting 
 or assigning, he may assign or sublet his lease without 
 the consent of the landlord. If the interest granted by 
 the lessee is for a shorter time or for rights inferior to 
 those granted in his own lease, it is a sublease. 
 
 Eviction. — At the expiration of the lease the landlord 
 is entitled to the possession of the premises, and if the 
 tenant does not surrender them, the landlord may in- 
 stitute proceedings to evict him. The statutes in the 
 different states provide the procedure by which the ten- 
 ant holding over after his lease has expired may be 
 evicted on short notice. This is termed "summary pro- 
 ceedings." This form of procedure is also provided by 
 
BUSINESS LAW. 41 
 
 statute for the eviction of the tenant when he does not 
 pay his rent. Where the tenancy is not for any fixed 
 period, but is a tenancy from year to year or month to 
 month, it cannot be terminated by either party except 
 by notice. Under the common law a tenancy from year 
 to year could be terminated by notice six months be- 
 fore the expiration of the period, and in the case of a. 
 tenancy for a shorter period, as from month to month,, 
 by a notice equal to the length of the period. Until 
 this notice has been given, the landlord cannot evict, 
 the tenant, and until the tenant has given a like notice 
 to the landlord, he is liable to be held for the rent un- 
 less the landlord accepts his surrender of the premises. 
 The statutes in the different states have in many in- 
 stances changed the common law rule and a shorter 
 notice is rendered sufficient. 
 
 CARRIERS 
 
 A carrier is a person or company that undertakes ta 
 carry, or makes a business of carrying, persons or goods 
 for hire. They may be either private, or public or com- 
 mon, carriers. A private carrier is one who carries only 
 occasionally and not as a public business or employ- 
 ment. Such a carrier is not bound to serve all wha 
 offer to employ him. He is liable for negligence in 
 transporting the goods, but is held only to the exercise 
 of ordinary diligence. Public or common carriers are 
 those whose regular business it is to carry goods from 
 place to place for all persons who choose to employ 
 and remunerate them, such as railroad, express, and 
 steamship companies. They may be carriers of passen- 
 gers or carriers of goods, but it is to the last-named 
 class that the term is usually applied. To constitute 
 one a common carrier, he must have held himself out to^ 
 the public as ready to carry, for hire, as a business,, 
 goods of the sort he professes to carry. 
 
 DUTIES OF COMMON CARRIERS. 
 
 Goods and Payment for Carriage. — Common carriers 
 are said to be carriers of "goods," and this term in- 
 cludes animals, money, and in fact any article of per- 
 
42 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 sonal property that is subject to transportation. By 
 the common law a common carrier is bound to receive 
 without respect to persons whatever may be offered 
 him for transportation, when the charges are paid or 
 offered to be paid. After the goods have been delivered 
 to the carrier the shipper cannot retake them without 
 paying the freight, and if they are intercepted before 
 reaching their destination, the full freight can be recov- 
 ered by the carrier. The consignor or shipper is the 
 party primarily liable for the freight and not the con- 
 signee or the person to whom the goods are shipped, 
 unless the consignee expressly agrees to pay it. 
 
 Regulation of Charges. — The charges that may be 
 made are in some instances regulated by statute, and 
 when not so regulated they must be reasonable and the 
 same as generally charged to others for the same 
 services. 
 
 Right to Refuse Goods. — The rule that a common 
 carrier is found by the common law to receive whatever 
 is offered to him to carry without respect to the persons 
 offering is subject to three qualifications — viz.: First, the 
 offer of the chattel must be for hire; second, the bail- 
 ment must be within the carrier's means of safe con, 
 veyance; third, such carriage should be in the line of 
 his vocation. 
 
 Interstate Commerce Law. — The carrier may pre- 
 scribe reasonable rules as to the time and manner of 
 receiving goods. He cannot be required to receive them 
 at an unreasonable hour or place, and he may insist 
 that the goods be packed in a reasonable way. But by 
 statutes passed in most of the states the carrier is pro* 
 hibited from discriminating in favor of one customer 
 over another either in rates or privileges of any kind. 
 The common carrier must not select his patrons arbi- 
 trarily, but must furnish equal facilities to all. To 
 further this object a statute was passed by the Congress 
 of the United States in 1887 which is known as the in- 
 terstate commerce law. This law was designed to reg- 
 ulate the commerce between the states and applies to 
 all common carriers, either by land or water, who do 
 business in two or more states or territories. It pro- 
 vides that no discrimination shall be made between 
 
BUSINESS LAW, 43 
 
 large or small, constant or occasional, shippers, and 
 that no charges shall be unjust or unreasonable. It 
 also provides that proportionate charges shall be made 
 for long and short distances. The law further requires 
 that the schedule of rates shall be published and filed 
 with commissioners who are appointed to oversee the 
 enforcement of the law and are known as the interstate 
 commerce commissioners. The act also makes it un- 
 lawful for any common carrier who comes under its pro- 
 visions to enter into any combination or agreement by 
 which the continuous carriage of freight from one point 
 to another shall be delayed or interrupted. All of the 
 large railroad and express companies do business in 
 more than one state, and therefore come within the pro- 
 visions of this act. 
 
 When Liability Begins. — The common carrier be- 
 comes responsible for the goods when they are delivered 
 to him for carriage and accepted by him in the capac- 
 ity of a carrier, except when the loss arises from any 
 of the following causes: (1) By an act of God, or by a 
 public enemy; (2) by the act of the shipper; (3) by the 
 act of the public authority; (4) from the nature of the 
 goods. 
 
 Limitation of Liability by Contract. — The carrier in 
 most of the states may limit his liability to a certain 
 extent by contract with the shipper as to release for 
 loss by fire, robbery, accidental delay, etc., but he can 
 not contract away his liability for the fraud, misconduct, 
 or negligence of himself, his agents, or servants. 
 
 Delivery by Carrier. — At the termination of the Jour- 
 ney the goods transported shall be delivered to the con- 
 signee or his authorized agent within a reasonable time, 
 the carrier being liable for delivery to the right party. 
 Goods must be delivered to the holder of the bill of 
 lading whether the holder be the consignee or a pur- 
 chaser. A delivery at a residence or place of business 
 is sufficient, other delivery being at the carrier's risk. 
 
 CARRIERS OF PASSENGERS. 
 
 Liability. — A common carrier of passengers Is bound 
 to receive and carry alike all persons applying and 
 willing to pay for their transportation. The fare re- 
 
44 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 quired of the passenger must be reasonable, and in 
 many states it is regulated by statute. The carrier is 
 bound to have means and appliances suitable to the 
 transportation, and to use all reasonable precautions 
 for the safety of passengers. He can prescribe rea- 
 sonable rules as to showing tickets, etc. The carrier 
 is not an insurer of the lives and safety of the passen- 
 gers, but he is held to a high degree of care, and 
 will be liable for even slight negligence. While the car- 
 rier does not warrant the safety of the passengers, he is 
 held to the highest degree of care practicable under 
 the circumstances. In most of the states the carrier 
 is not permitted to limit his liability for injury to the 
 passenger. It is considered contrary to public policy 
 to exempt the carrier from liability for even slight neg- 
 ligence when the lives and safety of human beings are 
 concerned. The passenger who pays his fare to the 
 carrier is entitled to have certain baggage taken with- 
 out charge, and for this baggage the carrier is liable 
 as for the carriage of freight. Baggage in this sense 
 includes such articles of personal necessity, conveni- 
 ence, and comfort as travelers under the circumstances 
 are wont to take on their journeys. It does not include 
 merchandise or a stock of goods used in the traveler's 
 business. 
 
 EXEMPTION LAWS 
 
 In most of the states there exists a homestead law 
 which exempts certain real property from liability of 
 attachment by the creditors of the owner. Certain per- 
 sonal property is also exempt, and in most cases wages 
 are exempt for a specified period. The following is 
 approximately the law in the several states and terri- 
 tories: — 
 
 Alabama. — Homestead to the value of $2000 or 160 
 acres of land not exceeding $2000 in value. Personal 
 property to the value of $1000 and $25 wages. 
 
 Alaslca. — No homestead law. Specified articles of 
 personal property worth from $750 to $1000, and wages 
 for thirty days preceding judgment. 
 
BUSINESS LAW, 45 
 
 Arizona. — Homestead to the value of $4000 if claim 
 is recorded. Personal property to the value of $1000. 
 Wages earned for thirty days preceding levy. 
 
 Arkansas. — Homestead of 160 acres in country or 
 one-quarter acre in town or village, not exceeding in 
 value $2500. Personal property including wages for 
 sixty days to the amount of $500 for the head of a 
 family and $200 for a single person. 
 
 California. — Homestead to the value of $5000. Cer- 
 tain specified articles of personal property not to ex- 
 ceed $1000. Wages for thirty days if necessary to sup- 
 port family, but one half of wages is liable for debts 
 contracted for necessaries. 
 
 Colorado. — Homestead to the value of $2000 if claim 
 is recorded. Certain specified articles of personal prop- 
 erty, including library and instruments of professional 
 men. Sixty per cent of any amount of wages due. 
 
 Connecticut. — Homestead to amount of $1,000 if claim 
 is recorded. Certain specified articles of personal prop- 
 erty and wages to the amount of $50. 
 
 Delaware. — No homestead exemption, and each coun- 
 ty has a special law as to exemption of personal proih 
 erty. 
 
 District of Golumhia. — Specified articles of personal 
 property not exceeding $1000. Wages for two months 
 not to exceed $200 and the salary of all government 
 employees. 
 
 Florida. — Homestead consisting of 160 acres in coun- 
 try or one half acre in town. Personal property to the 
 value of $1000 for the head of a family residing in the 
 state, and all wages. 
 
 Georgia. — Constitution of the state provides a home- 
 stead exemption of $1600, either real or personal prop- 
 erty, and the statutes allow fifty acres of land and five 
 acres additional for every child under sixteen years of 
 age. Certain specified articles of personal property 
 and all laborers* wages. 
 
 Idaho. — Homestead to the value of $5000 for a mar- 
 ried man and $1000 for a single man, but declaration of 
 homestead must be filed. Specified articles of personal 
 property to the value of $1000 and wages for thirty 
 days. 
 
46 BU8INE8S MAN'S ENCYCLOPEDIA. 
 
 Illinois. — Homestead to value of $1000. Personal 
 property, $400 for married persons, $100 for single per- 
 sons. Wages to the amount of $15 weekly for the head 
 of a family. 
 
 Indiana. — $600 worth of either real or personal prop- 
 erty is allowed as exemption to householders and mar- 
 ried women residents of the state. One month's wages 
 not to exceed $25. 
 
 Indian Territory. — Homestead worth $2500, but not 
 to exceed 160 acres if in the country. Personal prop- 
 erty and wages for sixty days, not to exceed $500 for 
 married persons and $200 for single persons. 
 
 Iowa. — Homestead one half acre in town or forty 
 acres in country. Specified articles of personal property 
 not to exceed $200 and wages for ninety days. 
 
 Kansas. — Homestead one acre in town and 160 acres 
 in country. Specified articles of personal property and 
 wages for three months preceding levy. 
 
 Kentucky. — Homestead to the value of $1000. Speci- 
 fied articles of personal property and wages to the 
 amount of $50. 
 
 Louisiana. — Homestead to the value of $2000. Speci- 
 fied articles of personal property and all laborers* 
 wages. 
 
 Maine. — Homestead to the value of $500 if recorded. 
 Specified articles of personal property. Wages to the 
 value of $20 except in suit for necessaries and then $10. 
 
 Maryland. — $100 worth of personal property and 
 wages to the amount of $100. 
 
 Massachusetts. — Homestead to the value of $800 if 
 recorded. Specified articles of personal property and 
 wages to the amount of $20 except in suit for neces- 
 saries, and then $10. 
 
 Michigan. — Homestead to the value of $1500. Speci- 
 fied articles of personal property and goods to the value 
 of $250. Eighty per cent of the wages of a household- 
 er not to exceed $30, others forty per cent up to $15. 
 
 Minnesota. — Homestead consisting of a city lot or 
 one half acre in a town or eighty acres in the country, 
 not allowed to a single man unless he resides on the 
 
BUSINESS LAW. 47 
 
 property. Specified articles of personal property 
 amounting to about $1500 and wages to the amount 
 of $25. 
 
 Mississippi. — Homestead to the value of $2000, but 
 not over 160 acres if in the country. Personal property 
 consisting of certain articles in the country, and to the 
 value of $250 in towns. Wages of $100 per month to 
 head of family, $20 to others. 
 
 Missouri. — Homestead to the value of $3000 in cities 
 and $1500 in country and towns. Personal property 
 consisting of certain specified articles not to exceed in 
 value $300, including ninety per cent of wages. 
 
 Montana. — Homestead to the value of $2500. Speci- 
 fied articles of personal property and wages for thirty 
 days. 
 
 Nebraska. — Homestead to the value of $2000. Per- 
 sonal property not exceeding $500, but not in addition 
 to homestead, and wages for sixty days. 
 
 Nevada. — Homestead to the value of $5000. Speci- 
 fied articles of personal property and wages not to ex- 
 ceed $50 earned in month process is issued. 
 
 New Hampshire. — Homestead to the value of $500. 
 Certain specified articles of personal property and 
 wages to the amount of $20 except as against debts for 
 necessaries. 
 
 New Jersey. — Homestead to the value of $1000 if ad- 
 vertised and recorded according to law. Personal prop- 
 erty to the amount of $200 and wearing apparel, also 
 all wages. 
 
 New Mexico. — Homestead to the value of $1000. Per- 
 sonal property consisting of certain specific articles and 
 $500 when party does not own homestead. Wages for 
 three months, except in certain specific cases. 
 
 New York. — Homestead to the value of $1000 if 
 notice is recorded. Certain specific articles to the head 
 of a family, and personal property in addition to the 
 value of $250, except for purchase price. Wages for 
 sixty days if necessary for the support of the family. 
 
 North Carolina. — Homestead to the value of $1000. 
 Personal property to the value of $500, and sixty days* 
 wages if necessary for the support of the family. 
 
48 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 North Dakota. — Homestead to the value of $5000. 
 Personal property to the value of $1000 to the head of 
 the family residing in the state. Wages not exempt. 
 
 Ohio. — Homestead to the value of $1000. Certain 
 specific articles of personal property. Wages for three 
 months if necessary for the support of the family. 
 
 OJclahoma. — Homestead consisting of 160 acres in 
 the country, or one acre in city or town. Personal 
 property consisting of certain specific articles. Wages 
 for ninety days to the head of a family. 
 
 Oregon. — Homestead to the value of $1500, not to be 
 less than twenty acres in the country or one lot in city 
 or town. Personal property consisting of certain spe- 
 cific articles, and wages for thirty days if necessary for 
 tne support of the family. 
 
 Pennsylvania. — Real or personal property to the 
 /alue of $300, and all wages. 
 
 Rhode Island. — Household furniture to the value of 
 $300, tools and books to the value of $300, and library 
 of professional men. Wages to the amount of $10, ex- 
 cept as against debts for necessaries. 
 
 South Carolina. — Homestead to the value of $1000. 
 Personal property to the value of $500. Wages for sixty 
 days if there is a family depending on them for 
 support. 
 
 South Dakota. — Homestead consisting of 160 acres 
 in the country or one acre in city or town, to the value 
 of $5000. Personal property to the value of $750, to the 
 head of a family, and $300 to a single person not the 
 head of a family. No exemptions against purchase 
 price. Wages for sixty days if necessary for support 
 of family. 
 
 Tennessee. — Homestead to the value of $1000. Cer- 
 tain specific articles of personal property. $30 in 
 wages. 
 
 Texas. — Homestead consisting of 200 acres in coun- 
 try, or city lot to the value of $5000. Certain specific 
 articles of personal property. Current wages for per- 
 sonal services. 
 
 Utah.— Uomestesid. to the value of $1500, and $500 
 additional for wife and $250 for each child. Certain 
 
BUSINESS LAW. 49 
 
 specific articles of personal property not exceeding 
 $1000, and one half of wages for thirty days, but not to 
 be less than $30. 
 
 Vermont. — Homestead to the value of $500. Certain 
 specific articles of personal property, and wages to the 
 amount of $10. 
 
 Virginia. — Homestead to the value of $2000. Certain 
 specific articles of personal property and one month's 
 wages, not to exceed $50. 
 
 Washington. — Homestead to the value of $2000 if 
 declaration is filed. Certain specific articles of personal 
 property, and in the case of a householder $1000 in 
 addition. Wages to the amount of $100 if family is 
 dependent thereon. 
 
 West Virginia. — Homestead to the value of $1000. 
 Personal property, including wages, to the amount of 
 $200. 
 
 Wisconsin. — ^Homestead consisting of one fourth acre 
 in town or forty acres in the country. Certain specific 
 articles of personal property, not to exceed $200 in 
 value. Wages for three months, not exceeding $60 a 
 month. 
 
 Wyoming. — Homestead to the value of $1500. Per- 
 sonal property to the value of $800 for a married man, 
 and $300 for a single man. Wages not to exceed $100. 
 
 STATUTE OF FRAUDS 
 
 In the following states the statute of frauds is not 
 in force: Alabama, Delaware, Illinois, Kentucky, North 
 Carolina, Ohio, Pennsylvania, Rhode Island, Tennessee, 
 Texas, Virginia, West Virginia. 
 
 The statute is not in force when contract is to be 
 performed within one year, in Kansas. 
 
 In the following states and territories, sale of goods, 
 wares and merchandise, to the value of $30, must be in 
 writing: Arkansas, Indian Territory, Maine, Missouri, 
 New Jersey. 
 
 State in which such amount is $33 : New Hampsnlre. 
 
 State in which such amount is $40 : Vermont. 
 
 States and territories in which such amount is $50: 
 Alaska, Colorado, Connecticut, District of Columbia, 
 Georgia, Indiana, Maryland, Massachusetts, Michigan, 
 
50 BUSINESS MAN'S ENCYCLOPEDIA, 
 
 Minnesota, Mississippi, Nebraska, Nevada, New York, 
 North Dakota, Oregon, South Carolina, South Dakota, 
 Washington, Wisconsin, Wyoming. 
 
 Over $50: Oklahoma. 
 
 Over $200: California, Idaho, Montana, Utah. 
 
 Over $500; must be proved by a witness and cor- 
 roborating testimony: Louisiana. 
 
 States and territories in which any value must be in 
 writing: Arizona, Florida, Iowa, New Mexico. 
 
 CHATTEL MORTGAGES 
 
 The following extracts show the statutory provisions 
 as to chattel mortgages in the different states and ter- 
 ritories: — 
 
 Alabama. — Must be recorded in the oflace of the pro- 
 bate judge where the mortgagor resides and also where 
 the property is located. Remains in force as long as 
 the debt. No renewal necessary. If the property is 
 moved to another county, the mortgage should be re- 
 corded there within three months. Is not valid as to 
 third parties on a stock of merchandise remaining in 
 the possession of the mortgagor. Is not valid as to 
 third parties on after acquired property. 
 
 Arizona. — Must be filed in the office of the recorder 
 where the mortgagor resides and where the property is 
 located. No renewal is necessary. Is not valid as to 
 third parties on stock of merchandise remaining in pos- 
 session of mortgagor nor on after acquired property. 
 
 Arkansas. — Must be filed or recorded in the office 
 of the recorder where the mortgagor resides. If record- 
 ed, is good for the life of the debt, but in case of exten- 
 sion by partial payment, these payments must be re- 
 corded. If it is filed, it is valid for one year and must 
 be renewed within thirty days preceding the expiration 
 of one year. Is valid as to third parties on stock of 
 merchandise remaining in possession of the mortgagor, 
 provided he acts as agent for the mortgagee when sales 
 are made. Is valid as to third parties on after acquired 
 property if the mortgage provides therefor. 
 
 California. — Must be recorded in the office of the re- 
 corder where the mortgagor resides and where the prop- 
 
BUSINESS LAW. 51 
 
 erty is located. Remains in force during the life of the 
 debt. No renewal is necessary. If the property is re- 
 moved to another county, the mortgage should be record- 
 ed there within thirty days. Is valid as to third parties 
 on stock of merchandise remaining in possession of the 
 mortgager, but not valid on after acquired property. 
 
 Colorado. — Under $300 it may be filed in office of re- 
 corder where the property is located. In other cases it 
 must be recorded in the office of the recorder. Remains 
 in force for two years on sums of $2,500 or under, for 
 five years on sums of $2,500 to $20,000, for ten years on 
 sums of $20,000 or over. Must be renewed by annual 
 statement showing unpaid amounts remaining due. 
 Mortgagee may take possession any time within thirty 
 days after maturity and mortgage remains valid during 
 that time. It is valid as to third parties on stock of 
 merchandise remaining in possession of the mortgagor 
 if the mortgage so states and the property is applied to 
 the mortgage debt. It is also valid on all after acquired 
 property except merchandise. 
 
 Connecticut. — Must be recorded in the town clerk's 
 office where property is located. Only specific articles 
 are subject to mortgage. Need not be renewed. Is not 
 valid as to third parties on stock of merchandise remain- 
 ing in possession of mortgagor, or on after acquired 
 property. 
 
 Delaware. — Must be recorded within ten days in the 
 office of the recorder where property is located. Is valid 
 for three years, at which time it must be renewed. Is 
 valid as to third parties on stock of merchandise remain- 
 ing in possession of the mortgagor, but is not valid on 
 after acquired property. 
 
 District of Columbia. — Must be recorded in the office 
 of the recorder where property is located. Need not be 
 renewed. Is not valid as to third parties on stock of 
 merchandise remaining in possession of the mortgagor, 
 or on after acquired property. 
 
 Florida. — Must be recorded in the office of the clerk 
 of the circuit court where the property is located. Need 
 not be renewed. Is not valid as to third parties on stock 
 of merchandise remaining in possession of mortgagor. 
 
 Georgia. — Must be recorded in the office of the clerk 
 
52 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 of the superior court where the mortgagor resides, if he 
 is a resident, and if he is not, then where the property 
 is located. No renewal is necessary. Is valid as to 
 third parties on stock of merchandise remaining in pos- 
 session of the mortgagor and on after acquired property. 
 
 Idaho. — Must be recorded in office of recorder where 
 the property is located. If the property is removed to 
 another county, mortgage must be recorded within ten 
 days. Is not valid as to third parties on stock of mer- 
 chandise remaining in possession of the mortgagor un- 
 less the proceeds of sale go to the mortgagee. Is not 
 valid on after acquired property. 
 
 Illinois. — Must be recorded in the office of the re- 
 corder where the mortgagor resides. If the mortgagor 
 does not reside in the state, must be recorded in the 
 county where the property is located. Is valid until 
 the debt matures or for three years if the debt has not 
 matured, and within thirty days of the maturity of the 
 debt or at the expiration of three years may be renewed 
 by filing an affidavit showing the amount due. If the 
 mortgagor resides in the state the mortgage must be 
 acknowledged by a justice of the peace, in township 
 where debtor resides. Is not valid as to third parties on 
 stock of merchandise remaining in possession of the 
 mortgagor or on after acquired property. 
 
 Indiana. — Must be recorded within ten days in the of- 
 :fice of the recorder where the mortgagor resides. Need 
 not be renewed. Is valid as to third parties on stock 
 of merchandise remaining in possession of mortgagor. 
 
 Indian Territory. — Must be filed or recorded with 
 the clerk of the recording district where the property 
 is located. If recorded, no renewal is necessary. If 
 :filed, it is not valid for more than one year unless with- 
 in thirty days before the expiration of the year there 
 has been filed an affidavit that the mortgage has not 
 been paid. It is valid as to third parties on stock of 
 m,erchandise remaining in the possession of the mort- 
 gagor if the mortgagor acts as agent for the mortgagee. 
 
 Iowa. — Must be recorded in the office of the recorder 
 where the mortgagor resides. On exempt property the 
 wife must join except for the purchase price of the prop- 
 erty. No renewal is necessary. It is valid as to third 
 
BUSINESS LAW. 53 
 
 parties on stock of merchandise remaining in the pos- 
 session of the mortgagor and on after acquired prop- 
 erty. 
 
 Kansas. — Must be filed with the register of deeds of 
 the county where the property is located, and where the 
 mortgagor resides if he resides within the state. It is 
 valid for two years from the date of filing. Must be 
 renewed within thirty days preceding expiration by affi- 
 davit showing the amount unpaid. Is valid as to third 
 parties on stock of merchandise remaining in the pos- 
 session of the mortgagor if the mortgagor acts as agent 
 for the mortgagee when sales are made. Also valid on 
 after acquired property if the mortgage provides 
 therefor. 
 
 Kentucky. — Must be recorded with the county clerk 
 where the property is located. It is valid for five years 
 after the maturity of the debt if no note has been given, 
 and for fifteen years where a note has been given. No 
 renewal is necessary. Is valid as to third parties on 
 stock of merchandise remaining in the possession of the 
 mortgagor if the goods can be identified, but is not valid 
 on after acquired property. 
 
 Louisiana. — Chattel mortgages are unknown in this 
 state. 
 
 Maine. — Must be recorded in the office of the town 
 clerk where the mortgagor resides, and if the mortgagor 
 does not reside in the state must be recorded in the 
 county where the property is situated. No renewal is 
 necessary. Is valid as to third parties on stock of mer- 
 chandise remaining in possession of the mortgagor, but 
 is not valid on after acquired property. 
 
 Maryland. — Must be recorded within twenty days in 
 the office of the clerk of the circuit court where the 
 mortgagor resides, or if he does not reside in the state 
 must be recorded in the county where the property is 
 located. No renewal is necessary. 
 
 Massachusetts. — Must be recorded within fifteen days 
 with the town clerk where the mortgagor resides. If 
 the mortgagor is a non-resident, the mortgage must be 
 recorded where the property is located. No renewal is 
 necessary. Is valid as to third parties on stock of mer- 
 
54 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 chandise remaining in possession of the mortgagor, but 
 is not valid on after acquired property. 
 
 Michigan. — Must be filed with the city or town clerk 
 where the mortgagor resides. Remains in force for one 
 year, and must be renewed within thirty days preceding 
 expiration by afladavit showing amount unpaid. Is 
 valid as to third parties on stock of merchandise re- 
 maining in possession of the mortgagor and on after 
 acquired property if the mortgage so provides. 
 
 Minnesota. — Must be filed with the city, town, or vil- 
 lage clerk where the mortgagor resides and where the 
 property is located. Remains in force for six years after 
 filing as against creditors or subsequent mortgagees or 
 purchasers. No renewal is necessary. Husband and 
 wife must join, and two witnesses and an acknowledg- 
 ment are necessary. Is not valid as to third parties on 
 a stock of merchandise remaining in the possession of 
 the mortgagor, but if the mortgage so recites it is valid 
 on after acquired property. 
 
 Mississippi. — Must be recorded with the chancery 
 clerk where the property is located. If property is re- 
 moved, it must be re-recorded within one year. No re- 
 newal is necessary. It is not valid as to third parties 
 on stock of merchandise remaining in possession of the 
 mortgagor, but is valid on after acquired property. 
 
 Missouri. — Must be filed or recorded with the re- 
 cord where the mortgagor resides. Is valid for five 
 years if filed, and during the life of the debt if recorded. 
 No renewal is necessary. Is not valid as to third parties 
 on a stock of merchandise remaining in possession of 
 the mortgagor unless the proceeds of sales go to the 
 mortgagee in reducing the mortgage debt. It is not 
 valid on after acquired property unless the mortgagee 
 takes possession before creditors secure a lien. 
 
 Montana. — Must be filed with the county clerk where 
 the mortgagor resides. If he does not reside in the state, 
 must be filed in the county where the property is lo- 
 cated. Is valid until sixty days after the debt matures, 
 not exceeding, however, one year and sixty days. Must 
 be renewed within sixty days after the debt becomes due 
 by filing an affidavit in the office where the mortgage 
 is filed, setting forth the amount due. Is valid as to 
 
BUSINESS LAW. 5U 
 
 third parties on stock of merchandise remaining ^ pos* 
 session of the mortgagor if made in good faitVi and 
 proceeds of the sale go to the mortgagee. 
 
 Nebraska. — Must be filed with the county clerk 
 where the mortgagor resides, and if he does not reside 
 in the state, must be filed in the county where the prop- 
 erty is situated. Is valid for five years against others 
 than the parties, but it is not valid as to third parties on 
 stock of merchandise in possession of the mortgagor,, 
 or on after acquired property. 
 
 Nevada. — Must be recorded in the office of the re- 
 corder where the mortgagor resides and where the. 
 property is located. Remains in force for six years 
 from maturity of the debt. No renewal is necessary. 
 If the mortgage is recorded, it is valid as to third par- 
 ties on stock of merchandise remaining in possession of 
 the mortgagor. 
 
 New Hampshire. — Must be recorded with the town 
 clerk where the mortgagor resides. If he does not re- 
 side in the state, must be recorded in the county where 
 the property is situated. No renewal is necessary. Is 
 not valid as to third parties on a stock of merchandise 
 remaining in the possession of the mortgagor unless 
 the proceeds of this sale go to the mortgagee in reduc- 
 tion of the mortgage debt. 
 
 New Jersey. — Must be recorded with the county clerk 
 or register of deeds where the mortgagor resides. If he 
 does not reside in the state, must be recorded in the 
 county where the property is situated. Need not be 
 renewed. If recorded, it is valid as to third parties on 
 a stock of merchandise remaining in possession of the 
 mortgagor. If the mortgage so provides it is valid on 
 after acquired property. 
 
 New Mexico. — Must be filed or recorded with the 
 probate clerk where the property is located. Remains 
 in force for one year. Must be renewed within thirty 
 days preceding its expiration by affidavit showing the 
 amount unpaid. Crops can not be mortgaged until they 
 have matured and are harvested. It is not valid as ta 
 third parties on a stock of merchandise remaining in. 
 possession of the mortgagor. 
 
S6 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 New York. — Must be filed with the register of New 
 York City or the county clerk if in a county seat, other- 
 -wise with the town clerk where the mortgagor resides. 
 If the mortgagor does not reside in the state, the mort- 
 gage must be filed in the county where the property is 
 situated. Remains valid for one year as against subse- 
 quent mortgagors and purchasers. Must be renewed 
 within thirty days preceding expiration by statement 
 showing the amount due. Is not valid as to. third par- 
 ties on a stock of merchandise remaining in possession 
 of the mortgagor unless tlie mortgagor is in possession 
 as agent for the mortgagee and the sale is for his bene- 
 fit. It is not valid on after acquired property. 
 
 North Carolina. — Must be recorded with the register 
 of deeds where the mortgagor resides. If he does not 
 reside in the state, must be recorded in the county 
 where the property is located. No renewal is necessary. 
 It is not valid as to third parties on stock of merchan- 
 dise remaining in possession of the mortgagor unless 
 the mortgagor has possession as the mortgagee's agent 
 and the proceeds go to the reduction of the mortgage 
 debt. It is not valid on after acquired property. 
 
 North Dakota. — Must be recorded with the register 
 of deeds where the property is located. Remains in 
 force for three years. Must be renewed within ninety 
 days preceding the expiration of three years by affidavit 
 showing the amount unpaid. Is valid as to third par- 
 ties on a stock of merchandise remaining in the pos- 
 session of the mortgagor if the mortgagor is required 
 to account to the mortgagee for the proceeds of the sale. 
 It is also valid on after acquired property. 
 
 Ohio. — Must be filed with the township clerk, or the 
 recorder, if in the county seat where the mortgagor re- 
 sides. If the mortgagor does not reside in the state, 
 must be filed in the county where the property is sit- 
 uated. Remains in force for one year. Must be re- 
 newed within thirty days after the expiration by an af- 
 ifidavit showing the amount unpaid. Is not valid as to 
 third parties on stock of merchandise remaining in pos- 
 session of the mortgagor unless the mortgagee takes 
 possession before the third party makes a levy or un- 
 less the mortgagor is by the terms of the mortgage 
 
BUSINESS LAW. 57 
 
 made agent for the mortgagee and required to account 
 to the mortgagee for all sales. Is not valid on after 
 acquired property unless the property is actually deliv- 
 ered to the mortgagee or the mortgagee takes posses- 
 sion before other rights intervene. 
 
 Oklahoma. — Must be filed with the register of deeds 
 where the mortgagor resides if a resident of the state; 
 if not, where the property is located. Remains in force 
 for three years. Must be renewed within thirty days, 
 preceding expiration by afiidavit showing the 'amount 
 unpaid. It is valid as to third parties on stock of mer- 
 chandise remaining in possession of the mortgagor, but 
 is not valid on after acquired property. 
 
 Oregon. — Must be filed or recorded with the county 
 clerk where the mortgagor resides. If he does not reside 
 in the state, must be filed or recorded in the county 
 where the property is located. Remains in force for 
 one year and must be renewed within thirty days pre- 
 ceding expiration by affidavit showing the amount un- 
 paid, unless it is executed and acknowledged as a real 
 estate mortgage and recorded, in which case no renewal 
 is required. Is not valid as to third parties on stock 
 of merchandise remaining in possession of the mortga- 
 gor or on after acquired property. 
 
 Pennsylvania. — Must be recorded with the county re- 
 corder or register where the mortgagor resides. If the 
 mortgagor does not reside in the state, must be recorded 
 in the county where the property is located. Only spe- 
 cific articles can be mortgaged. Must be renewed within 
 three months after maturity. Is not valid as to third 
 parties on stock of merchandise remaining in possession 
 of the mortgagor or on after acquired property. 
 
 Rhode Island.— rMvLSt be recorded with the town clerk 
 where the mortgagor resides. If he does not reside in 
 the state, must be recorded in the county where the 
 property is located. No renewal is necessary. If prop- 
 erly recorded, it is valid as to third parties on stock of 
 merchandise remaining in the possession of the mort- 
 gagor, but is not valid on after acquired property as 
 against creditors who secure a lien before the mort- 
 gagee takes possession. 
 
58 BUSINESS MAN'S ENCYCLOPEDIA, 
 
 South Carolina. — Must be recorded within forty days 
 with the register of conveyances where the mortgagor 
 resides. If he does not reside in the state, must be re- 
 corded in the county where the property is located. No 
 renewal is necessary. It is valid as to third parties on 
 stock of merchandise remaining in the possession of the 
 mortgagor and also on after acquired property. 
 
 South Dakota. — Must be filed with the register of 
 deeds where property is located. Remains in force for 
 three years. Must be renewed within thirty days pre- 
 ceding expiration by an affidavit showing the amount 
 unpaid. It is valid as to third parties on stock of mer- 
 chandise remaining in the possession of the mortgagor, 
 provided the mortgagor is required to account to the 
 mortgagee for the proceeds of sales. It is also valid on 
 after acquired property. 
 
 Tennessee. — Must be filed or recorded with the reg- 
 ister of deeds where the mortgagor resides. If he does 
 not reside in the state, must be filed or recorded in the 
 county where the property is located. Remains in force 
 for six years. Need not be renewed. Is not valid as to 
 third parties on a stock of merchandise remaining in 
 the possession of the mortgagor, nor on after acquired 
 property. 
 
 Texas. — Must be filed with the county clerk where 
 the mortgagor resides. If he does not reside in the 
 state, piust be filed in the county where the property is 
 located. Need not be renewed. Is not valid as to third 
 parties on stock of merchandise remaining in the pos- 
 session of the mortgagor. 
 
 Utah. — Must be recorded in the office of the recorder 
 where the mortgagor resides. If he does not reside in 
 the state, must be recorded in the county where the 
 property is located. Remains in force for one year. 
 Must be renewed within thirty days after one year from 
 filing by affidavit showing amount unpaid. It is not 
 valid after five years. Is not valid as to third parties 
 on stock of merchandise remaining in possession of the ' 
 mortgagor. 
 
 Vermont. — Must be recorded in the city or town 
 clerk's office where the mortgagor resides. If he does 
 not reside in the state, must be filed in the county 
 
BUSINESS LAW, 59 
 
 where the property is situated. Need not be renewed. 
 It is valid as to third parties on stock of merchandise 
 remaining in possession of the mortgagor. If posses- 
 sion is taken, it is valid on after acquired property. 
 
 Virginia. — ^Must be recorded in the county or city 
 clerk's office where the property is located. Need not 
 be renewed. Is not valid as to third parties on stock 
 of merchandise remaining in possession of the mort- 
 gagor unless the mortgagor has possession as mort- 
 gagee's agent, and the proceeds go to the reduction of 
 the mortgage debt, but it is not valid on after acquired 
 property. 
 
 Washington, — Must be filed and recorded with the 
 county auditor where the property is located. Remains 
 in force for two years if less than $300; if over $300, 
 for the life of the debt. May be renewed within two 
 years by an affidavit showing the amount unpaid. It 
 is valid as to third parties on stock of merchandise re- 
 maining in possession of the mortgagor, but the mort- 
 gage should be so drawn that the mortgagor must apply 
 sales in payment of mortgage debt. It is valid on after 
 acquired property. 
 
 West Virginia. — Must be recorded with the county 
 clerk where the property is located, and if property is 
 removed must be re-recorded within three months. No 
 renewal is necessary. It is not valid as to third parties 
 on stock of merchandise remaining in possession of the 
 mortgagor, nor is it valid on after acquired property. 
 
 Wisconsin. — Must be filed with the city or town clerk 
 where the mortgagor resides. If he does not reside in 
 the state, must be filed in county where property is lo- 
 cated. Remains in force for two years. Must be re- 
 newed within thirty days preceding the expiration by an 
 affidavit showing the amount unpaid. It is valid as to 
 third parties on stock of merchandise remaining in pos- 
 session of the mortgagor, provided sworn statements 
 are filed every sixty days, showing amount of goods 
 sold, amount added, and payment made on mortgage 
 debt, but is not valid on after acquired property. 
 
 Wyoming. — Must be recorded in the county clerk's 
 office where the property is located. Remains in force 
 for two months after the debt is due. If property is 
 
60 BUSINESS MAN'S ENCYCLOPEDIA, 
 
 removed, mortgage must be re-recorded. Must be re- 
 newed within sixty days after maturity of the secured 
 debt. It is valid as to third parties on stock of mer- 
 chandise remaining in the possession of the mortgagor, 
 provided the proceeds of the sales are applied to the 
 debt secured. It is also valid on after acquired property. 
 
 ACKNOWLEDGEMENT OF DEEDS 
 
 An acknowledgment is the act of declaring the exe- 
 cution of an instrument, but the word also denotes the 
 official certificate of such declaration. All deeds and 
 conveyances of land to be effectual as to third parties 
 must be recorded upon previous proof or acknowledg- 
 ment of their execution. Erasures and interlineations 
 should be noted previous to the execution, or referred to 
 in the certificate of the officer taking the acknowledg- 
 ment. It is advisable to comply with the form of ac- 
 knowledgment prescribed by the statutes of the various 
 states. 
 
 Within the several states acknowledgments may be 
 taken in geaeral before the following officers: Notaries 
 public and justices of the peace generally within their 
 territorial jurisdiction, and in any place of the state 
 usually before judges and clerks of the supreme, circuit, 
 probate, and county courts, judges of the United States 
 courts, chancellors, registers, masters in chancery, and 
 court commissioners; county recorders, town clerks and 
 their assistants. United States commissioners, county 
 surveyors, county auditors, registers of deeds, mayors, 
 and clerks of incorporated cities may take acknowledg- 
 ments within their jurisdiction; besides the foregoing, 
 in several states also the deputies of the enumerated 
 officers, and in Connecticut, commissioners of the school 
 fund; in Louisiana, parish recorders and their deputies; 
 in Maine, women appointed by the governor for that 
 purpose; in Michigan, members of the legislature; in 
 Mississippi, members of county board of supervisors; 
 in Nebraska, the secretary of state; in New York, re- 
 corders of cities and commissioners of deeds; in Penn- 
 sylvania, mayors, recorders, and aldermen of Philadel- 
 phia, Pittsburgh, Allegheny, and Carbondale; in Rhode 
 
4fvas^. if, U5aa 
 
 BUSINESS LAW, 61 
 
 Island, state senators ; in Vermont, registers of probate ; 
 in West Virginia, prothonotaries; in Wisconsin, police 
 justices. 
 
 Without the state and within the United States, the 
 following officers are authorized to take acknowledg- 
 ment: Judges and clerks of courts of record, notaries 
 public, commissioners appointed for that purpose by the 
 governors, and officers authorized to take acknowledg- 
 ments within their respective states. Besides the fore- 
 going, also, in Colorado, secretaries of state; in Dela- 
 ware, mayors of cities; in Illinois, justices of the peace, 
 commissioners of deeds, and mayors of cities; in Ken- 
 tucky, secretaries of state; in Michigan and Wisconsin, 
 master in chancery; in New Jersey, New York, North 
 Carolina, Pennsylvania, and Rhode Island, mayors and 
 chief magistrates of cities. 
 
 Without the United States, the following officers may 
 take acknowledgment: Judges of courts of record, 
 mayors or chief magistrates of cities, towns, boroughs, 
 counties, notaries public, diplomatic, consular, or com- 
 mercial agents of the United States resident and accred- 
 ited in the country where the acknowledgment is taken. 
 
 The forms of deeds conveying land are prescribed 
 by several states, and such forms should be generally 
 used. The requisites of a valid deed are: (1) Compe- 
 tent parties; (2) consideration; (3) the deed must be 
 reduced to writing; (4) it must be duly executed and 
 delivered. The mode and effect of an acknowledgment 
 or of a deed is governed by the law of the state where 
 the land lies, and not by that of the place where the 
 acknowledgment is taken. Where the deed is executed 
 by an attorney in fact, it is customary to have the power 
 of attorney acknowledged by the principal and the deed 
 acknowledged by the attorney. A deed executed by sev- 
 eral grantors should be acknowledged by each of them. 
 
 Seals or their equivalent (or whatever is intended as 
 such) are necessary in Alaska, Connecticut, Delaware, 
 District of Columbia, Florida, Idaho, Illinois, Maine, 
 Maryland, Massachusetts, Michigan, Minnesota, Mis- 
 souri, New Hampshire, New Jersey, New York, North 
 Carolina, Oregon, Pennsylvania, South Carolina, Vermont, 
 Virginia, West Virginia, Wisconsin, Wyoming. In almost 
 
62 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 all the states deeds by corporations must be under seal. 
 Forms are prescribed or indicated by the statutes of most 
 of the states except Connecticut, Florida, Louisiana. Sep- 
 arate acknowledgment by wife is required in Alaska, 
 Arkansas, Delaware, District of Columbia, Florida, Geor- 
 gia, Idaho, Kentucky, Louisiana, Montana, Nevada, New 
 Jersey, North Carolina, Oregon, Pennsylvania, South 
 Carolina, Tennessee, Texas. One witness to the execu- 
 tion of deeds is required in District of Columbia, Maine 
 (customary), Maryland, Nebraska, New Jersey (usual), 
 Oklahoma Territory, Utah, Wyoming. Two witnesses 
 to the execution of deeds are required in Arkansas, 
 Connecticut, Florida, Georgia, Louisiana, Michigan, Min- 
 nesota, New Hampshire, Ohio, Oregon, South Carolina, 
 Texas, Vermont, Wisconsin. 
 
 WILLS 
 
 A will or testament is a final disposition of a per- 
 son's property to take effect after his death. A codicil 
 is an addition or alteration in such disposition. All per- 
 sons are competent to make a will except idiots, per- 
 sons of unsound mind, and infants. In many states a 
 will of an unmarried woman is deemed revoked by her 
 subsequent marriage. A nuncupative or unwritten will 
 is one made by a soldier in active service, or by a 
 mariner while at sea. 
 
 In most of the states a will must be in writing, signed 
 by the testator, or by some person in his presence, and 
 by his direction, and attested by witnesses, who must 
 subscribe their names thereto in the presence of the 
 testator. The form of wording a will is immaterial as 
 long as its intent is clear. 
 
 Age at which persons may make wills is in most of 
 the states 21 years. Males and females are competent 
 to make wills at 18 years in the following states: Cali- 
 fornia, Connecticut, Hawaiian Islands, Idaho, Montana, 
 Nevada, North Dakota, Oklahoma Territory, South Da- 
 kota, Utah; and in the following states only females 
 at 18 years: Colorado, District of Columbia, Ilinois, 
 Maryland, Missouri, Washington, Wisconsin. 
 
 In the following states persons of 18 years may dis- 
 pose of personal property only: Alabama, Arkansas, 
 
BUSINESS LAW. 63 
 
 Missouri, Oregon, Rhode Island, Virginia, West Virginia; 
 in Georgia any one over 14 years and in Louisiana any 
 one over 16 years is competent to make a will. In Col- 
 orado persons of 17 years, and in New York males of 
 18 and females of 16 years may dispose of personalty. 
 Witnesses. — Most of the states require two witnesses, 
 except in Connecticut (3), District of Columbia (3), 
 Maine (3), Massachusetts (3), New Hampshire (3), 
 South Carolina (3), Vermont (3). 
 
 THE BANKRUPTCY LAW 
 
 Who May Become Bankrupts. — (a) Any person who 
 owes debts, except a corporation, shall be entitled to 
 the benefits of this act as a voluntary bankrupt, (b) 
 Any natural person (except a wage-earner or a person 
 engaged chiefly in farming or the tillage of the soil), 
 any unincorporated company, and any corporation en- 
 gaged principally in manufacturing, trading, printing, 
 publishing, or mercantile pursuits, owing debts to the 
 amount of one thousand dollars or over, may be ad- 
 judged an involuntary bankrupt upon default or an im- 
 partial trial, and shall be subject to the provisions and 
 entitled to the benefits of this act. Private bankers, 
 but not national banks or banks incorporated under 
 state or territorial laws, may be adjudged involuntary 
 bankrupts. 
 
 Duties of Bankrupts. — (a) The bankrupt shall 
 (1) attend the first meeting of his creditors, if directed 
 by the court or a judge thereof to do so, and the hearing 
 upon his application for a discharge, if filed; (2) com- 
 ply with all lawful orders of the court; (3) examine the 
 correctness of all proofs of claims filed against his es- 
 tate; (4) execute and deliver such papers as shall be 
 ordered by the court; (5) execute to his trustee trans- 
 fers of all his property in foreign countries; (6) imme- 
 diately inform his trustee of any attempt, by his credit- 
 ors or other persons, to evade the provisions of this act, 
 coming to his knowledge; (7) in case of any person 
 having to his knowledge proved a false claim against his 
 estate, disclose that fact immediately to his trustee; 
 (8) prepare, make oath to, and file in court within ten 
 days, unless further time is granted, after the adjudica- 
 
64 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 tion if an involuntary bankrupt, and with the petition if 
 a voluntary bankrupt, a schedule of his property, show- 
 ing the amount and kind of property, the location there- 
 of, its money value in detail, and a list of his creditors, 
 showing their residences, if known (if unknown that 
 fact to be stated), the amount due each of them, the 
 consideration thereof, the security held by them, if any, 
 and a claim for such exemptions as he may be entitled 
 to, all in triplicate, one copy of each for the clerk, one 
 for the referee, and one for the trustee; and (9) when 
 present at the first meeting of his creditors, and at such 
 other times as the court shall order, submit to an ex- 
 amination concerning the conducting of his business, 
 the cause of his bankruptcy, his dealings with his cred- 
 itors and other persons, the amount, kind, and where- 
 abouts of his property, and, in addition, all matters 
 which may affect the administration and settlement of 
 his estate; but no testimony given by him shall be 
 offered in evidence against him in any criminal pro- 
 ceedings. 
 
 Provided, however, that he shall not be required to 
 attend a meeting of his creditors, or at or for an ex- 
 amination at a place more than one hundred and fifty 
 miles distant from his home or principal place of busi- 
 ness, or to examine claims except when presented to 
 him, unless ordered by the court, or a judge thereof, 
 for cause shown, and the bankrupt shall be paid his 
 actual expenses from the estate when examined or re- 
 quired to attend at any place other than the city, town, 
 or village of his residence. 
 
 THE NEW DEPARTMENT OF 
 
 COMMERCE AND LABOR 
 
 The Department of Commerce and Labor was estab- 
 lished by Chapter 552 of the Acts of the Fifty-seventh 
 Congress, approved February 14, 1903. The act pro- 
 vides that there shall be at the seat of government an 
 executive department to be known as the Department 
 of Commerce and Labor, headed by a Secretary of Com- 
 merce and Labor, appointed by the President at a sal- 
 ary of $8,000 per annum. An assistant secretary at 
 
BUSINESS LAW. 65 
 
 $5,000 a year, a chief clerk, a disbursing clerk, and 
 other clerical assistants as authorized shall be ap- 
 pointed. 
 
 The duty of this department shall be to foster, pro- 
 mote, and develop the foreign and domestic commerce, 
 the mining, manufacturing, and shipping and fishing 
 industries, the labor interests, and the transportation 
 facilities of the United States. To this end there shall 
 be transferred to the Department of Commerce and La- 
 bor from the jurisdiction of the Treasury Department, 
 the Light-House Board and Establishment, the Steam- 
 boat-Inspection Service, the Bureau of Navigation, the 
 United States Shipping Commissioners, the National 
 Bureau of Standards, the Coast and Geodetic Survey, 
 the Commissioner-General and Commissioners of Immi- 
 gration and the Immigration Bureau and service at 
 large and the Bureau of Statistics. From the Depart- 
 ment of Interior the Census Office is transferred to the 
 new department. The Department of Labor, the Fish 
 Commission. The Bureau of Foreign Commerce of the 
 Department of State shall also be transferred and maae 
 a part of the Bureau of Statistics before mentioned. 
 
 There shall also be created a Bureau of Manufac- 
 tures to foster and promote that industry by compiling 
 and publishing information concerning it at home and 
 abroad, consular offices and agents to assist in gath- 
 ering the material. 
 
 A Bureau of Corporations is also created to investi- 
 gate the organization, conduct, and management of the 
 business of any corporation, joint stock company, or 
 corporate combination engaged in commerce among the 
 several states and with foreign nations, except certain 
 common carriers. The commissioner shall have for 
 this purpose the powers conferred upon the Interstate 
 Commerce Commission. It is also the duty of this bu- 
 reau to gather, compile, publish, and supply useful in- 
 formation concerning corporations doing business in the 
 United States, including insurance companies. 
 
 The heads of the new bureaus shall be appointed by 
 the President at salaries of $4,000 a year for the Bureau 
 of Manufacture, and $5,000 for the Bureau of Corpora- 
 tions, the latter to have a deputy at a salary of $3,500. 
 
66 BUSINESS MAN'S ENCYCLOPEDIA, 
 
 The control of the salmon, seal, and other fisheries in 
 Alaska and of the immigration of aliens into the United 
 States is also to be transferred from the Treasury De- 
 partment to the Department of Commerce and Labor. 
 
 The secretary of the department shall report in 
 writing to Congress at the close of each fiscal year, 
 enumerating receipts and disbursements, describing the 
 work accomplished, and making recommendations. The 
 President is authorized to transfer to the Department 
 of Commerce and Labor at any time the whole or any 
 part of any office or bureau engaged in scientific or 
 statistical work in any of the other departments of the 
 Government. The secretary of the new department 
 shall also make special investigations and reports when 
 requested by Congress or the President or which he him- 
 self may deem necessary and urgent. 
 
 PATENT OFFICE PROCEDURE 
 
 Patents are issued in the name of the United States, 
 and under the seal of the Patent Office, to any person 
 who has invented or discovered any new and useful 
 art, machine, manufacture, or composition of matter or 
 any new and useful improvement thereof, not known or 
 used by others in this country before his invention or 
 discovery thereof and not patented or described in any 
 printed publication in this or any foreign country, before 
 his invention or discovery thereof or more than two 
 years prior to his application, and not in public use or 
 on sale in the United States for more than two years 
 prior to his application, unless the same is proved to 
 have been abandoned; and by any person who, by his 
 own industry, genius, efforts, and expense, has invented 
 and produced any new and original design for a manu- 
 facture, bust, statue, alto-relievo, or bas-relief; any new 
 ornamental and original design for an article of manu- 
 facture; the same not having been known nor used by 
 others before his invention or i 'oduction thereof, nor 
 patented nor described in any pr ated publication, upon 
 payment of the fees required by law and other due 
 proceedings had. 
 
 Every patent contains a grant to the patentee, his 
 heirs or assigns, for the term of seventeen years, ex- 
 
BU8INES8 LAW. 67 
 
 cept in the case of design patents, of the exclusive right 
 to make, use, and vend the invention or discovery 
 throughout the United States and the territories re- 
 ferring to the specification for the particulars thereof. 
 
 If it appear that the inventor, at the time of making 
 his application, believed himself to be the first inventor 
 or discoverer, a patent will not be refused on account 
 of the invention or discovery, or any part thereof, having 
 been known or used in any foreign country before his 
 invention or discovery thereof, if it had not been before 
 patented or described in any printed publication. 
 
 Joint inventors are entitled to a joint patent; neither 
 can claim one separately. Independent inventors of 
 distinct and independent improvements in the same ma- 
 chine cannot obtain a joint patent for their separate 
 inventions; nor does the fact that one furnishes the 
 capital and another makes the invention entitle them to 
 make application as joint inventors; but in such case 
 they may become joint patentees. 
 
 No person otherwise entitled thereto will be de- 
 barred from receiving a patent for his invention or dis- 
 covery, by reason of its having been first patented or 
 caused to be patented by the inventor or his legal rep- 
 resentatives or assigns in a foreign country, unless the 
 application for said foreign patent was filed more than 
 twelve months prior to the filing of the application in 
 this country, in which case no patent shall be granted 
 in this country. 
 
 Applications, — Applications for a patent must be 
 made in writing to the Commissioner of Patents. The 
 applicant must also file in the Patent Office a written 
 description of the invention or discovery, and of the 
 manner and process of making, constructing, compound- 
 ing, and using it, in such full, clear, concise, and exact 
 terms as to enable any person skilled in the art or 
 science to which it appertains, or with which it is most 
 nearly connected, to make, construct, compound, and 
 use the same; and in case of a machine, he must ex- 
 plain the principle thereof, and the best mode in which 
 he has contemplated applying that principle, so as to 
 distinguish it from other inventions, and particularly 
 point out and distinctly claim the part, improvement, 
 
68 BUSINESS MAN'S ENCYCLOPEDIA, 
 
 or combination which he claims as his invention or 
 discovery. The specification and claim must be signed 
 by the inventor and attested by two witnesses. 
 
 When the nature of the case admits of drawings, 
 the applicant must furnish a drawing of the required 
 size, signed by the inventor or his attorney in fact, and 
 attested by two witnesses. In all cases which admit of 
 representation by model, the applicant, if required by 
 the Patent Office, shall furnish a model of convenient 
 size to exhibit advantageously the several parts of his 
 invention or discovery. 
 
 The applicant shall make oath that he verily believes 
 himself to be the original and first inventor or discov- 
 erer of the art, machine, manufacture, composition, or 
 improvement for which he solicits a patent; that he 
 does not know and does not believe that the same 
 was ever before known or used, and shall state of 
 what country he is a citizen and where he resides. In 
 every original application the applicant must distinctly 
 state under oath that the invention has not been pat- 
 ented to himself or to others with his knowledge or 
 consent in this or any foreign country for more than 
 two years prior to his application, or on an application 
 for a patent filed in any foreign country by himself 
 or his legal representatives or assigns more than twelve 
 months prior to his application in this country. If any 
 application for patent has been filed in any foreign 
 country by the applicant in this country or by his legal 
 representatives or assigns, prior to his application in 
 this country, he shall state the country or countries in 
 which such application has been filed, giving the date 
 of such application, and shall also state that no appli- 
 cation has been filed in any other country or countries 
 than those mentioned; that to the best of his knowledge 
 and belief the invention has not been in public use or 
 on sale in the United States nor described in any printed 
 publication or patent in this or any foreign country for 
 more than two years prior to his application in this 
 country. Such oath may be made before any persou 
 within the United States authorized by law to adminis- 
 ter oaths, or, when the applicant resides in a foreign 
 country, beiore any minister, charge d'affaires, consul. 
 
BUSINESS LAW, 69 
 
 or commercial agent holding commission under the 
 Government of the United States, or before any notary- 
 public of the foreign country in which the applicant may 
 be, provided such notary is authorized by the laws of 
 his country to administer oaths. 
 
 On the filing of such application and the payment of 
 the fees required by law, if, on examination, it appears 
 that the applicant is justly entitled to a patent under 
 the law, and that the same is sufficiently useful and 
 Important, the commissioner will issue a patent there- 
 for. 
 
 Every patent or any interest therein shall be as- 
 signable in law by an instrument in writing; and the 
 patentee or his assigns or legal representatives may, in 
 like manner, grant and convey an Exclusive right under 
 his patent to the whole or any specified part of the 
 United States. 
 
 Reissues. — A reissue is granted to the original pat- 
 entee, his legal representatives, or the assignees of the 
 entire interest when, by reason of a defective or insuf- 
 ficient specification or by reason of the patentee claim- 
 ing as his invention or discovery more than he had a 
 right to claim as new, the original patent is inoperative 
 or invalid, provided the error has arisen from inad- 
 vertence, accident, or mistake, and without any fraudu- 
 lent or deceptive intention. Reissue applications must 
 be made and the specifications sworn to by the invent- 
 ors, if they be living. 
 
 Caveats. — A caveat, under the patent law, is a notice 
 given to the office of the caveator's claim as inventor, 
 in order to prevent the grant of a patent to another for 
 the same alleged invention upon an application filed 
 during the life of a caveat without notice to the 
 caveator. 
 
 Any person who has made a new invention or dis- 
 covery, and desires further time to mature the same, 
 may, on payment of a fee of ten dollars, file in the 
 Patent Offce a caveat setting forth the object and the 
 distinguishing characteristics of the invention, and pray- 
 ing protection of his right until he shall have matured 
 his invention. Such caveat shall be filed In the confi- 
 dential archives of the oflice and preserved in secrecy. 
 
70 BUSINESS MAWS ENCYCLOPEDIA. 
 
 and shall be operative for the term of one year from 
 the filing thereof. The caveat may be renewed, on re- 
 quest in writing, by the payment of a second fee of ten 
 dollars, and it will continue in force for one year from 
 the payment of such second fee. 
 
 The caveat must comprise a specification, oath, and, 
 when the nature of the case admits of it, a drawing, 
 and, like the application, must be limited to a single 
 invention or improvement. 
 
 Fees. — Fees must be paid in advance, and are as fol- 
 lows: On filing each original application for a patent, 
 $15. On issuing each original patent, $20. In design 
 cases: For three years and six months, $10; for seven 
 years, $15; for fourteen years, $30. On filing each 
 caveat, $10. On every application for the reissue of 
 a patent, $30. On filing each disclaimer, $10. For cer- 
 tified copies of patents and other papers in manuscript, 
 ten cents per hundred words and twenty-five cents for 
 the certificate, for certified copies of printed patents, 
 eighty cents. For uncertified printed copies of specifi- 
 cations and drawings of patents, for single copies, or 
 any number of unclassified copies, five cents each; for 
 copies by subclasses, three cents each; by classes, two 
 cents each, and for the entire set of patents issued, in 
 one order, one cent each. For recording every assign- 
 ment, agreement, power of attorney, or other paper, of 
 three hundred words or under, $1; of over three hun- 
 dred and under one thousand words, $2; of over one 
 thousand words, $3. For copies of drawings, the reason- 
 able cost of making them. The Patent Office is pre- 
 pared to furnish positive photographic copies of any 
 drawing, foreign or domestic, in the possession of the 
 office, in sizes and at rates as follows: Large size, 
 10x15 inches, twenty-five cents; medium size, 7x11 
 inches, fifteen cents. Fee for examining and registering 
 trade mark, $25, which includes certificate. Stamps 
 cannot be accepted by the Patent Office in payment of 
 fees. Stamps and stamped envelopes should not be sent 
 to the office for replies to letters, as stamps are not 
 required on mail matter emanating from the Patent 
 Office. 
 
BUSINESS LAW, 71 
 
 COPYRIGHT LAW OF THE UNITED STATES 
 
 Section 4952 of the Revised Statutes of the United 
 States, in force December 1, 1873, as amended by the 
 act of June 18, 1874, as amended by the act of March 3, 
 1891, provides that the author, inventor, designer, or 
 proprietor of any booli, map, chart, dramatic or musical 
 composition, engraving, cut, print, or photograph or 
 negative thereof, or of a painting, drawing, chromo, 
 statuary, and of models or designs intended to be per- 
 fected as works of the fine arts, and the executors, 
 administrators, or assigns of any such person, shall, 
 upon complying with the provisions of this chapter, 
 have the sole liberty of printing, reprinting, publishing, 
 completing, copying, executing, finishing, and vending 
 the same; and, in the case of a dramatic composition, of 
 publicly performing or representing it, or causing it to 
 be performed or represented by others. And authors 
 or their assigns shall have exclusive right to dramatize 
 or translate any of their works for which copyright 
 shall have been obtained under the laws of the United 
 States. 
 
 Printed Title Required. — A printed copy of the title 
 of the book, map, chart, dramatic or musical composi- 
 tion, engraving, cut, print, photograph, or chromo, or a 
 description of the painting, drawing, statue, statuary, or 
 model or design, for a work of the fine arts, for which 
 copyright is desired, must be delivered to the Librarian 
 of Congress, or deposited in the mail, within the United 
 States, prepaid, addressed "Librarian of Congress, Wash- 
 ington, D. C* This must be done on or before day of 
 publication in this or any foreign country. 
 
 The printed title required may be a copy of the 
 title-page of such publications as have title-pages. In 
 other cases, the title must be printed expressly for copy- 
 right entry, with name of claimant of copyright. The 
 style of type is immaterial, and the print of a type- 
 writer will be accepted. But a separate title is required 
 for each entry. The title of a periodical must include 
 the date and number; and each number of a periodical 
 requires a separate entry of copyright. Blank forms of 
 application are furnished. 
 
72 BUSINE8S MAN'S ENCYCLOPEDIA. 
 
 Fees. — The legal fee for recording each copyright 
 claim is 50 cents, and for a copy of this record (or cer- 
 tificate of copyright) under seal of the office an addi- 
 tional fee of 50 cents is required, making $1 or $1.50, if 
 certificate is wanted, which will be mailed as soon as 
 reached in the records. No money is to be placed in 
 any package of books, music, or other publications. A 
 money order or express order avoids all risk. In the 
 case of publications which are the production of per- 
 sons not citizens or residents of the United States, but 
 who are citi2^ns or subjects of any country with which 
 the United States has copyright agreement, the fee for 
 recording title is $1, and 50 cents additional for a copy 
 of the record. Certificates covering more than one 
 entry in one certificate are not issued. Express orders, 
 money orders, and currency only taken for fees. No 
 postage stamps received. 
 
 Deposit of Copies. — No later than the day of publi- 
 cation in this country or abroad, two complete copies of 
 the best edition of each book or other article must be 
 delivered at the ofiice of the Librarian of Congress, or 
 deposited in the mail within the United States, ad- 
 dressed "Librarian of Congress, Washington, D. C," to 
 perfect the copyright. 
 
 The freight or postage must be prepaid, or the pub- 
 lications inclosed in parcels covered by printed penalty- 
 labels, furnished by the Librarian, in which case they 
 will come free by mail (not express), without limit of 
 weight, according to rulings of the Postoflace Depart- 
 ment. Books must be printed from type set in the 
 United States or plates made therefrom; photographs 
 from negatives made in the United States; chromos 
 and lithographs from drawings on stone or transfers 
 therefrom made in the United States. In the case of 
 paintings, drawings, statuary, or models or designs for 
 works of art, a photograph of the article is to be sent 
 in lieu of the two copies. Without the deposit of copies 
 required the copyright is void, and a penalty of $25 is 
 incurred. No copy is required to be deposited else- 
 where. 
 
 The law requires one copy of each new edition 
 
BU8INE88 LAW. 73 
 
 wherein any substantial changes are made to be de- 
 posited with the Librarian of Congress. 
 
 Notice of Copyright. — No person shall maintain an 
 action for the infringement of a copyright unless notice 
 is given by inserting in every copy published, on the 
 title-page or the page folowing, if it be a book; or if a 
 map, chart, musical composition, print, cut, engraving, 
 photograph, painting, drawing, chromo, statue, statuary, 
 or model or design intended to be perfected as a work 
 of the fine arts, by inscribing upon some visible portion 
 thereof, or on the substance on which the same is 
 mounted, the following words, viz.: ''Entered according 
 
 to act of Congress, in the year , by , in the 
 
 office of the Librarian of Congress, at Washington," or 
 at the option of the persons entering the copyright, 
 the words: "Copyright, 19 — , by ." 
 
 The law imposes a penalty of $100 upon any person 
 who has not obtained copyright who shall insert the 
 notice, "Entered according to act of Congress," or 
 "Copyright," etc., or words of the same import, in or 
 upon any book or other article, whether such article be 
 subject to copyright or not. 
 
 Translations. — The copyright law secures to authors 
 and their assigns the exclusive right to translate or to 
 dramatize any of their works; no notice is required to 
 enforce this right. 
 
 Duration of Copyright. — The original term of copy- 
 right runs for twenty-eight years. Within six montns 
 before the end of that time, the author or designer, 
 or his widow or children, may secure a renewal for 
 the further term of fourteen years, making forty-two 
 in all. 
 
 Renewals. — Application for renewal must be accom- 
 panied by printed title and fee; and be explicit state- 
 ment of ownership, in the case of the author, or of re- 
 lationship, in the case of his widow or children, and 
 must state definitely the date and place of entry of the 
 original copyright. Within two months from date of 
 renewal the record thereof must be advertised in an 
 American newspaper for four weeks. 
 
 Time of Publication. — The time of publication is not 
 limited by any law or regulation, but the courts have 
 
74 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 held that it should take place "within a reasonable 
 time." Registration of title may be secured for a pro- 
 jected as well as for a completed work. But the law 
 provides for no caveat or notice of interference — only 
 for actual entry of title. 
 
 Assignments. — Copyrights are assignable by any in- 
 strument of writing. Such assignment is to be recorded 
 in the office of the Librarian of Congress within sixty 
 days from execution, "in default of which it shall be 
 void as against any subsequent purchaser or mortgagee 
 for a valuable consideration, without notice." The fee 
 for this record and certificate is $1 and for a certified 
 copy of any record of assignment $1. A copy of the 
 record (or duplicate certificate) of any copyright entry 
 will be furnished, under seal of the office, at the rate 
 of 50 cents each. 
 
 Infringement of Copyright. — Infringement is a very 
 plain matter when the copyrighted work is simply re- 
 produced. It becomes a complicated and difficult ques- 
 tion when only extracts or quotations are made, or when 
 resort is had to a book to make the public acquainted 
 with its contents or to criticise its style or the substance 
 of its thought. It has long been established that the 
 identity of a literary work consists in its ideas and its 
 language. The law does not protect an author against 
 the use of his thoughts in a substantially different 
 form. Unauthorized translation or dramatization of a 
 copyrighted work is no infringement, nor is a true 
 abridgement. An abridgement consists in a condensa- 
 tion of the author's language, and is substantially a 
 different work. The rights of translation or dramatiz- 
 ation may be, however, reserved by the author if he so 
 desires. 
 
 Abridgment and Compilation. — In a compilation there 
 is the act of taking the very words of the author, or 
 with such slight changes as to show servile imitation, 
 while abridgment, as before stated, consists in con- 
 densation and consequent rearrangement. The law at 
 most tolerates the condensation and does not permit the 
 copying of the author's words to such an extent as to 
 do him substantial injury. Compilation is to some ex- 
 tent permitted in dictionaries, gazetteers, encyclo- 
 
BUSINESS LAW. 75 
 
 pedias, guide-books, etc., where the main design and 
 execution of the work are novel. In works of this class 
 the sources from which information is drawn are the 
 same and the results must be very similar. Novelty 
 and improvement in them in general consists in abridg- 
 ment, changes in arrangement, more modern informa- 
 tion, the correction of errors, etc. 
 
 Legal Remedies for Violation of Copyright. — When 
 a copyright is violated the regular remedies are an 
 action for damages or an injunction from a court of 
 equity preventing the continuance of the acts of in- 
 fringement. As incidental to this relief, the court may 
 direct an account to be taken of the profits realized 
 by the infringer. Where an infringement consists in 
 making use of part of a copyrighted work in connection 
 with other matter, the injunction will be so granted as 
 to prevent the publication of that portion of the in- 
 fringer's book which is open to objection, without ref- 
 erence to the fact that the order of the court may make 
 the book, thus shorn of a portion of its contests, value- 
 less. Severe penalties and forfeitures are also im- 
 posed by statute law upon persons who knowingly vio- 
 late the provisions of the copyright acts. 
 
 LEGAL HOLIDAYS IN THE VARIOUS 
 STATES 
 
 January 1. New Year's Day: In all the states (in- 
 cluding the District of Columbia, Arizona, New Mexico, 
 and Oklahoma), except Massachusetts, Mississippi, and 
 New Hampshire. 
 
 January 8. Anniversary of the Battle of New Orleans: 
 In Louisiana. 
 
 January 19. Lee's Birthday: In Florida, Georgia, 
 North Carolina, South Carolina, Virginia, and Alabama. 
 
 February 16, 1904. Mardi-Gras: In Alabama and 
 the parish of Orleans, Louisiana. 
 
 February 12. Lincoln's Birthday: In Connecticut, 
 Delaware, Illinois, Minnesota, New Jersey, New York, 
 North Dakota, Pennsylvania, Washington (state), and 
 Wyoming. 
 
76 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 February 22. Washington's Birthday: In all the 
 states (including the District of Columbia, Arizona, and 
 Oklahoma), except Mississippi, where it is observed by 
 exercises in the public schools only. 
 
 March 2. Anniversary of Texan Independence: In 
 Texas. 
 
 March 4, in the District of Columbia, when it falls 
 on the day the president is inaugurated. 
 
 April 1, 1904. Good Friday: In Alabama, Delaware, 
 Louisiana, Maryland, Pennsylvania, Tennessee. 
 
 April 19. Patriots' Day: In Massachusetts. 
 
 April 21. Anniversary of the Battle of San Jacinto: 
 In Texas. 
 
 April 26. Confederate Memorial Day: In Alabama, 
 Florida, Georgia and Mississippi. 
 
 May 10. Confederate Memorial Day: In North 
 Carolina and South Carolina. 
 
 May (Second Friday). Confederate Day: In Ten- 
 nessee. 
 
 May 20. Anniversary of the Signing of the Mecklen- 
 burg Declaration of Independence: In North Carolina. 
 
 May 30. Decoration Day: In all the states and 
 territories (and District of Columbia) except Florida, 
 Georgia, Idaho, Louisiana, Mississippi, North Carolina, 
 South Carolina, Texas. In Virginia, known as "Con- 
 federate Memorial Day." 
 
 May (last Friday) Pioneer Day: In Montana, ob- 
 served in public schools. 
 
 June (first Monday), even years, general state elec- 
 tion in Oregon. 
 
 June 3. Jefferson Davis' Birthday: In Florida, 
 Georgia and Alabama. In Louisiana, known as "Con- 
 federate Decoration Day." 
 
 July 4. Independence Day: In all the states, Dis- 
 trict of Columbia, and territories. 
 
 July 24. Pioneer's Day: In Utah. 
 
 August 16. Bennington Battle Day: In Vermont. 
 
 September 5, 1904. Labor Day: In all the states and 
 territories (and District of Columbia), except Arizona, 
 
BUSINESS LAW. 77 
 
 Mississippi, Nevada and N^orth Dakota. In Louisiana, 
 observed in Orleans Pai .h. 
 
 September 9. Admission Day: In California. 
 
 November 1. All Saints* Day: In Louisiana. 
 
 November — General Election Day: In Arizona, 
 California, Colorado, Delaware, Idaho, Indiana, Iowa, 
 Kansas, Kentucky, Louisiana, Maryland, Minnesota, Mis- 
 souri, Montana, Nevada, New Hampshire, New Jersey, 
 New Mexico, New York, North Dakota, Ohio, Okla- 
 homa, Oregon (vote for presidential elections only) 
 Pennsylvania, Rhode Island, South Carolina, South Da 
 kota, Tennessee, Texas, West Virginia, Washington; 
 Wisconsin and Wyoming, in the years when elections 
 are held therein. In 1904 in states holding such elec 
 tions the date was November 8. 
 
 November — 1905. Thanksgiving Day (usually the 
 fourth Thursday in November) : Is observed in all the 
 states, and in the District of Columbia, Arizona, New 
 Mexico and Oklahoma, though in some states it is not 
 a statutory holiday. 
 
 December 25. Christmas Day: In all the states, and 
 in the District of Columbia, Arizona, New Mexico and 
 Oklahoma. 
 
 Sundays and fast days are legal holidays in all the 
 states which designate them as such. 
 
 There are no statutory holidays in Mississippi, but 
 by common consent the Fourth of July, Thanksgiving 
 and Christmas are observed as holidays. In Kansas 
 Decoration Day, Labor Day and Washington's Birthday 
 are the only legal holidays by legislative enactment; 
 other legal holidays are so only by common consent. In 
 New Mexico, Washington's Birthday, Decoration Day, 
 Labor Day, Flag Day (June 14), and Arbor Day are 
 holidays when so designated by the governor. 
 
 Arbor Day is a legal holiday in Arizona, Maine, Min- 
 nesota, New Mexico, Wisconsin and Wyoming, the day 
 being set by the governor; in Texas, February 22; Ne- 
 braska, April 22; Utah, April 15; Rhode Island, May 11; 
 Montana, second Tuesday in May; Florida, first Friday 
 in February; Georgia, first Friday in December; Colo- 
 
78 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 rado (school holiday only), third Friday in April; in 
 Oklahoma, the Friday following the second Monday in 
 March. 
 
 Every Saturday after 12 o'clock noon is a legal holi- 
 day in New York, New Jersey, Pennsylvania, Maryland, 
 Tennessee, Virginia, the District of Columbia, and the 
 city of New Orleans, and in Newcastle county, Del., 
 except in St. George's Hundred; in Louisiana and Mis- 
 souri in cities of 100,000 or more inhabitants; in Ohio 
 in cities of 50,000 or more inhabitants; and June 1 to 
 August 31 in Denver, Col. 
 
 There is no national holiday, not even the Fourth of 
 July. Congress has at various times appointed special 
 holidays. In the second session of the Fifty-third con- 
 gress it passed an act making Labor Day a public holi- 
 day in the District of Columbia, and it has recognized 
 the existence of certain days as holidays for commer- 
 cial purposes, but, with the exception named, there is 
 no general statute on the subject. The proclamation of 
 the president designating a day of Thanksgiving only 
 makes it a legal holiday in the District of Columbia 
 and the territories, and in those states which provide 
 by law for it. 
 
 LABOR LEGISLATION 
 
 Anti-Boycotting and Anti-Blacklisting Laws. — The 
 states having laws prohibiting boycotting in terms are 
 Illinois and Indiana. 
 
 The states having laws prohibiting blacklisting in 
 terms are Colorado, Connecticut, Florida, Illinois, In- 
 diana, Iowa, Kansas, Minnesota, Missouri, Montana, Ne- 
 vada, North Dakota, Oklahoma, Texas, Utah, Virginia, 
 Washington and Wisconsin. 
 
 The following states have laws which may be fairly 
 construed as prohibiting boycotting: Alabama, Connecti- 
 cut, Florida, Georgia, Maine, Massachusetts, Michigan, 
 Minnesota, Mississippi, Missouri, New Hampshire, New 
 York, North Dakota, Oklahoma, Oregon, South Dakota, 
 Texas, Utah, Vermont and Wisconsin. 
 
 The following states have laws which may be fairly 
 construed as prohibiting blacklisting: Georgia, Michi- 
 
BUSINESS LAW. 79 
 
 gan. New Hampshire, New York, Oklahoma, Oregon, 
 Rhode Island and South Dakota. 
 
 In the following states it is unlawful for any em- 
 ployer to exact an agreement, either written or verbal, 
 from an employe not to join or become a member of 
 any labor organization, as a condition of employment: 
 California, Colorado, Connecticut, Idaho, Indiana, Kan- 
 sas, Massachusetts, Minnesota, Missouri, New Jersey, 
 New York, Ohio, Pennsylvania, Porto Rico and Wis- 
 consin. 
 
 EIGHT-HOUR LAWS 
 
 Arkansas. — Eight hours of labor constitute a day's 
 work on public roads, highways and bridges. 
 
 California. — Eight hours of labor constitutes a day's 
 work, unless it is otherwise expressly stipulated by 
 the parties to a contract. The time of service of all 
 laborers, workmen, and mechanics employed upon any 
 public works of, or work done for, the state, or for any 
 political sub-division thereof, whether the work is to be 
 done by contract or otherwise, is limited and restricted 
 to eight hours in any one calendar day, and a stipula- 
 tion that no workman, laborer, or mechanic in the em- 
 ploy of the contractor or sub-contractor shall be re- 
 quired or permitted to work more than eight hours in 
 any one calendar day, except in cases of extraordinary 
 emergency, shall be contained in every contract to 
 which the state or any political sub-division thereof is 
 a party. 
 
 Colorado. — Eight hours constitutes a day's work for 
 all workingmen employed by the state, or any county, 
 township, school district, municipality, or incorporated 
 town, and for workingmen in all underground mines or 
 workings and in smelting and refining works. 
 
 Connecticut. — Eight hours of labor constitute a law- 
 ful day's work unless otherwise agreed. 
 
 District of Columhia. — Eight hours constitute a day's 
 work for all laborers or mechanics employed by or on 
 behalf of the District of Columbia. 
 
 Idaho. — Eight hours' actual work constitute a lawful 
 day's work on all state, county and municipal works. 
 
 Illinois. — Eight hours are a legal day's work in all 
 mechanical employments, except on farms, and when 
 
80 BUSINESS MAN'S ENCYCLOPEDIA, 
 
 otherwise agreed; does not apply to service by the day, 
 week, or month, or prevent contracts for longer hours. 
 Eight hours constitute a day's labor for persons as- 
 sessed to work on public highways. 
 
 Indiana. — Eight hours of labor constitute a legal 
 day's work for all classes of mechanics, workingmen 
 and laborers, excepting those engaged in agricultural 
 and domestic labor. Overwork by agreement and for 
 extra compensation is permitted. The employment of 
 persons under fourteen years of age for more than 
 eight hours per day is absolutely prohibited. 
 
 Iowa. — Eight hours constitute a day's labor on public 
 roads. 
 
 Kansas. — Eight hours constitute a day's work for all 
 laborers, mechanics or other persons employed by or on 
 behalf of the state or any county, city, township, or 
 other municipality. 
 
 Maryland. — No mechanic or laborer employed by or 
 on behalf of the city of Baltimore shal be required to 
 work more than eight hours as a day's labor. 
 
 Massachusetts. — Eight hours shall constitute a day's 
 work for all laborers, workmen, and mechanics em- 
 ployed by or on behalf of any city or town in the 
 commonwealth upon acceptance of the statute by a ma- 
 jority of voters present and voting upon the same at any 
 general election. 
 
 Minnesota. — Eight hours constitute a day's labor 
 for all laborers, workmen and mechanics employed 
 by or on behalf of the state, whether the work is done 
 by contract or otherwise. 
 
 Missouri. — Eight hours constitute a legal day's work. 
 The law does not prevent an agreement to work for a 
 longer or a shorter time and does not apply to la- 
 borers and farm hands in the service of farmers or 
 others engaged in agriculture. It is unlawful for em- 
 ployers to work their employes longer than eight hours 
 per day in mines. 
 
 Montana. — Eight hours constitute a legal day's work 
 for persons engaged to operate or handle any first-mo- 
 tion or direct-acting hoisting engine, or any geared or in- 
 direct-acting hoisting engine at any mine employing fif- 
 teen or more men underground when the duties of fire- 
 man are performed by the person so engaged; also for 
 
BUSINESS LAW. 81 
 
 any stationary engineer operating a stationary engine 
 developing fifty or more horse-power when such engi- 
 neer has charge or control of a boiler or boilers in addi- 
 tion to his other duties. The law applies only to such 
 steam plants as are in continuous operation or are 
 operated sixteen or more hours in each twenty-four 
 hours, and does not apply to persons running any engine 
 more than eight hours in each twenty-four for the pur- 
 pose of relieving another employe in case of sickness or 
 other unforeseen cause. Eight hours constitute a day's 
 labor upon roads and highways. 
 
 Nebraska — Eight hours constitute a day's work on 
 public roads. 
 
 New Jersey. — Eight hours constitute a day's labor 
 on any day whereon any general or municipal election 
 shall be held. 
 
 New Meooico. — Eight hours are required as a day's 
 labor on public roads and highways. 
 
 New York,. — Eight hours constitute a day's work for 
 all classes of employes, except in farm or domestic 
 labor. Overwork for extra pay is permitted, except 
 upon work by or for the state or a municipal corpora- 
 tion, or by contractors or sub-contractors therewith. 
 The law applies to those employed by the state or muni- 
 cipality, or by persons contracting for state work, and 
 each contract to which the state or a municipal corpora- 
 tion is a party shall contain a stipulation that no work- 
 man, laborer, or mechanic in the employ of the con- 
 tractor, sub-contractor, etc., shall be permitted or re- 
 quired to work more than eight hours in any one calen- 
 dar day, except in cases of extraordinary emergency. 
 
 Ohio. — Eight hours shall constitute a day's work in 
 all engagements to labor in any mechanical, manufac- 
 turing, or mining business, unless otherwise expressly 
 stipulated in the contract. 
 
 Oklahoma. — Eight hours constitute a day's labor on 
 public highways. 
 
 Oregon. — Eight hours constitute a day's labor on 
 public roads. 
 
 Pennsylvania. — Eight hours of labor shall be deemed 
 and held to be a legal day's work in all cases of labor 
 and service by the day where there is no agreement 
 
82 BUSINESS MAN'S ENCYCLOPEDIA, 
 
 or contract to the contrary. This does not apply to 
 farm or agricultural labor or service by the year, month 
 or week. 
 
 Eight hours out of the twenty-four shall make and 
 constitute a day's labor for all mechanics, workmen, 
 and laborers in the employ of the state, or of any 
 municipal corporation therein, or otherwise engaged on 
 public works; this shall be deemed to apply to me- 
 chanics, workingmen, or laborers in the employ of per- 
 sons contracting with the state or any municipal cor- 
 poration therein, for the performance of public work. 
 
 Porto Rico. — No laborer may be compelled to work 
 more than eight hours per day on public works. 
 
 Tennessee. — Eight hours shall be a day's work upon 
 the highways. 
 
 Texas. — Eight hours constitute a day's work on pub- 
 lic highways. 
 
 Utah. — Eight hours constitute a day's work upon all 
 public works and in all underground mines or workings, 
 smelters and all other institutions for the reduction or 
 refining of ores. 
 
 Washington. — Eight hours in any calendar day shall 
 constitute a day's work on any work done for the state, 
 county or municipality. In cases of extraordinary 
 emergency overtime may be worked for extra pay. 
 
 West Virginia. — Eight hours shall constitute a day's 
 work for all laborers, workmen and mechanics who 
 may be employed by or on behalf of the state. 
 
 Wisconsin. — In all engagements to labor in any 
 manufacturing or mechanical business, where there is 
 no express contract to the contrary, a day's work shall 
 consist of eight hours; but the law does not apply to 
 contracts for labor by the week, month or year. In all 
 manufactories, workshops or other places used for me- 
 chanical or manufacturing purposes, children under 
 eighteen years of age and women may not be com- 
 pelled to work over eight hours a day. Eight hours 
 constitute a day's labor on public highways. 
 
 Wyoming. — Eight hours' actual work constitute a 
 legal day's work in all mines, state and municipal works. 
 
 United States. — Eight hours shall constitute a day's 
 work for all laborers, workmen, and mechanics who 
 may be employed by or on behalf of the United States. 
 
BUSINESS LAW, 83 
 
 PASSPORT REGULATIONS 
 
 The rules governing the granting and issuing of pass- 
 ports in the United States are as follows: 
 
 By Whom Issued. — No one but the secretary of state 
 may grant and issue passports in the United States. — 
 Revised Statutes, sees. 4075, 4078. 
 
 A person entitled to receive a passport if temporarily 
 abroad should apply to the diplomatic representative of 
 the United States in the country where he happens to 
 be; or, in the absence of a diplomatic representative, to 
 the consul-general of the United States; or, in the ab- 
 sence of both, to the consul of the United States. The 
 necessary statement may be made before the nearest 
 consular officer of the United States. 
 
 Application by a person in one of the insular posses- 
 sions of the United States should be made to the chief 
 executive of such possession. 
 
 To Whom Issued. — The law forbids the granting of 
 a passport to any person who is not a citizen of the 
 United States. — Revised Statutes, sec. 4076. 
 
 A person who has only made the declaration of in- 
 tention to become a citizen of the United States cannot 
 receive a passport. 
 
 Applications. — A person who is entitled to receive 
 a passport must make a written application, in the 
 form of an affidavit, to the secretary of state. 
 
 The affidavit must be attested by an officer author- 
 ized to administer oaths, and if he has an official seal it 
 must be affixed. If he has no seal, his official character 
 must be authenticated by certificate of the proper legal 
 officer. 
 
 If the applicant signs by mark, two attesting wit- 
 nesses to his signature are required. 
 
 The applicant is required to state the date and place 
 of his birth, his occupation, and the place of his per- 
 manent residence, and to declare that he goes abroad 
 for temporary sojourn and intends to return to the 
 United States with the purpose of residing and per- 
 forming the duties of citizenship therein. 
 
 The applicant must take the oath of allegiance to 
 the government of the United States. 
 
84 BU8INE88 MAN'S ENCYCLOPEDIA, 
 
 The application must be accompanied by a descrip- 
 tion of the person applying, and should state the fol- 
 lowing particulars, viz.: Age, years; stature, 
 
 feet inches (English measure) ; forehead, ; 
 
 eyes, ; nose, ; mouth, ; chin, ; hair, 
 
 ; complexion, ; face, . 
 
 The application must be accompanied by a certificate 
 from at least one credible witness that the applicanc is 
 the person he represents himself to be, and that the 
 facts stated in the afladavit are true to the best of the 
 witness's knowledge and belief. 
 
 Native Citizens. — An application containing the in- 
 formation indicated by rule 3 will be sufficient evidence 
 in the case of native citizens. 
 
 A Person Born Abroad Whose Father Was a Native 
 Citizen of tiie United States. — In addition to the state- 
 ments required by rule 3, his application must show that 
 his father was born in the United States, has resided 
 therein, and was a citizen at the time of the applicant's 
 birth. The department may require that this affidavit 
 be supported by that of one other citizen acquainted 
 with the facts. 
 
 Naturalized Citizens. — In addition to the statements 
 required by rule 3, a naturalized citizen must transmit 
 his certificate of naturalization, or a duly certified copy 
 of the court record thereof, with his application. It will 
 be returned to him after inspection. He must state 
 in his affidavit when and from what port he emigrated 
 to this country, what ship he sailed in, where he has 
 lived since his arrival in the United States, when and 
 before what court he was naturalized, and that he is 
 the identical person described in the certificate of natur- 
 alization. The signature to the application should con- 
 form in orthography to the applicant's name as written 
 in the naturalization paper, which the department fol- 
 lows. 
 
 Woman's Application. — If she is unmarried, in addi- 
 tion to the statements required by rule 3, she should 
 state that she has never been married. If she is the 
 wife of a native citizen of the United States the fact 
 should be made to appear in her application. If she is 
 the wife or widow of a naturalized citizen, in addition 
 
BUSINESS LAW. 85 
 
 to the statements required by rule 3, she must transmit 
 for inspection her husband's certificate of naturaliza- 
 tion, must state that she is the wife (or widow) of the 
 person described therein, and must set forth the facts 
 of his emigration, naturalization, and residence, as re- 
 quired in the rule governing the application of a natur- 
 alized citizen. 
 
 The Child of a Naturalized Citizen Claiming Citi- 
 zenship Through the Naturalization of the Parent. — In, 
 addition to the statements required by rule 3, the appli- 
 cant must state that he or she is the son or daughter, 
 as the case may be, of the person described in the 
 certificate of naturalization, which must be submitted 
 for inspection, and must set forth the facts of emigra- 
 tion, naturalization, and residence, as required in the 
 rule governing the application of a naturalized citizen. 
 
 A Resident of an Insular Possession of the United 
 States Who Owes Allegiance to the United States. — In 
 addition to the statements required by rule 3, he must 
 state that he owes allegiance to the United States and 
 that he does not acknowledge allegiance to any other 
 government; and must submit an affidavit from at least 
 two credible witnesses having good means of knowledge 
 In substantiation of his statements of birth, residence, 
 and loyalty. 
 
 Expiration of Passport. — A passport expires two 
 years from the date of its issuance. A new one will 
 be issued upon a new application, and if the applicant 
 be a naturalized citizen, the old passport will be ac- 
 cepted in lieu of a certificate of naturalization, if the 
 application upon which it was issued is found to contain 
 sufficient information as to the naturalization of the 
 applicant. 
 
 Wife, Minor Children and Servants. — When the appli- 
 cant is accompanied by his wife, minor children, or 
 servant who would be entitled to receive a passport, it 
 will be sufl[icient to state the fact, giving the respective 
 ages of the children and the allegiance of the servant, 
 when one passport will suffice for all. For any other 
 person in the party a separate passport will be re- 
 quired. A woman's passport may include her minor 
 
86 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 children and servant under the above-named conditions. 
 
 Professional Titles. — They will not be inserted in 
 passports. 
 
 Fee. — By act of congress approved March 23, 1888, 
 a fee of one dollar is required to be collected for 
 every citizen's passport. That amount in currency or 
 postal money order should accompany each application 
 made by a citizen of the United States. Orders should 
 be made payable to the disbursing clerk of the de- 
 partment of state. Drafts or checks will not be ac- 
 cepted. 
 
 Visas of Passports. — They will not be procured by 
 the department of state from the representatives of 
 foreign governments. 
 
 Blank Forms of Application. — They will be furnished 
 by the department to persons who desire to apply for 
 passports, but are not furnished, except as samples, to 
 those who make a business of procuring passports. 
 
 Address. — Communications should be addressed to 
 the department of state, passport bureau, and each com- 
 munication should give the postoffice address of the 
 person to whom the answer is to be directed. 
 
 Rejection of Application. — The secretary of state 
 may refuse to issue a passport to any one who, he has 
 reason to believe, desires it for an unlawful or im- 
 proper purpose, or who is unable or unwilling to com- 
 ply with the rules. 
 
 NATURALIZATION LAWS OF THE 
 UNITED STATES 
 
 The conditions under and the manner in which an 
 alien may be admitted to become a citizen of the United 
 States are prescribed by sections 2165-74 of the Revised 
 Statutes of the United States. 
 
 Declaration of Intentions. — The alien must declare 
 upon oath before a circuit or district court of the 
 United States or a district or supreme court of the 
 territories, or a court of record of any of the states 
 having common law jurisdiction and a seal and clerk, 
 two years at least prior to his admission, that it is, 
 bona fide, his intention to become a citizen of the 
 
BUSINESS LAW, 87 
 
 United States, and to renounce forever all allegiance 
 and fidelity to any foreign prince or state, and particu- 
 larly to the one of which he may be at the time a citi- 
 zen or subject. 
 
 Oath on Application for Admission. — He must at the 
 time of his application to be admitted declare on oath, 
 before some one of the courts above specified, "that he 
 will support the Constitution of the United States, and 
 that he absolutely and entirely renounces and abjures 
 all allegiance and fidelity to every foreign prince, poten- 
 tate, state or sovereignty, and particularly, by name, 
 to the prince, potentate, state, or sovereignty of which 
 he was before a citizen or subject,** which proceedings 
 must be recorded by the clerk of the court. 
 
 Conditions for Citlzensiiip. — If it shall appear to the 
 satisfaction of the court to which the alien has ap- 
 plied that he has made a declaration to become a citi- 
 zen two years before applying for final papers, and 
 has resided continuously within the United States for 
 at least five years, and within the state or territory 
 where such court is at the time held one year at least; 
 and that during that time "he has behaved as a man 
 of good moral character, attached to the principles of 
 the Constitution of the United States, and well disposed 
 to the good order and happiness of the same,'* he will 
 be admitted to citizenship. If the applicant has borne 
 any hereditary title or order of nobility he must make 
 an express renunciation of the same at the time of 
 his application. 
 
 Soldiers. — Any alien of the age of twenty-one years 
 and upward who has been in the armies of the United 
 States, and has been honorably discharged therefrom, 
 may become a citizen on his petition, without any 
 previous declaration of intention, provided that he has 
 resided in the United States at least one year previous 
 to his application, and is of good moral character. 
 (It is judicially decided that residence of one year in a 
 particular state is not requisite.) 
 
 Minors. — Any alien under the age of twenty-one years 
 who has resided in the United States three years next 
 preceding his arriving at that age, and who has con- 
 tinued to reside therein to the time he may make appli- 
 
88 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 cation to be admitted a citizen thereof, may, after he 
 arrives at the age of twenty-one years, and after he 
 has resided five years within the United States, includ- 
 ing the three years of his minority, be admitted a citi- 
 zen; but he must make a declaration on oath and prove 
 to the satisfaction of the court that for two years next 
 preceding it has been his bona fide intention to become 
 a citizen. 
 
 Children of Naturalized Citizens. — The children of 
 persons who have been duly naturalized, being under the 
 age of twenty-one years at the time of the naturalization 
 of their parents, shall, if dwelling in the United States, 
 be considered as citizens thereof. 
 
 Citizens' Cliildren Who Are Born Abroad. — The 
 children of persons who now are or have been citizens 
 of the United States are, though born out of the limits 
 and jurisdiction of the United States, considered as citi- 
 zens thereof. 
 
 Chinese. — The naturalization of Chinamen is ex- 
 pressly prohibited by section 14, chapter 126, laws 
 of 1882. 
 
 Protection Abroad to Naturalized Citizens. — Section 
 2,000 of the Revised Statutes of the United States de- 
 clares that "all naturalized citizens of the United States 
 while in foreign countries are entitled to and shall re- 
 ceive from this government the same protection of per- 
 sons and property which is accorded to native-born 
 citizens." 
 
 The Right of Suffrage. — The right to vote comes from 
 the state, and is a state gift. Naturalization is a Fed- 
 eral right and is a gift of the Union, not of any one 
 state. In nearly one-half of the Union aliens (who 
 have declared intentions) vote and have the right to 
 vote equally with naturalized or native-bom citizens. 
 In the other half only actual citizens may vote. (See 
 Table of Qualifications for Voting in each State, on an- 
 other page.) The Federal naturalization laws apply 
 to the whole Union alike, and provide that no alien 
 may be naturalized until after five years' residence. 
 Even after five years' residence and due naturalization 
 lie is not entitled to vote unless the laws of the state 
 confer the privilege upon him, and he may vote in sev- 
 
BUSINESS LAW. 89 
 
 eral states six months after landing, if lie has declared 
 his intention, under United States law, to become a 
 citizen. 
 
 Inhabitants of the New Insular Possessions. — The in- 
 habitants of Hawaii were declared to be citizens of 
 the United States under the act of 1900 creating Ha- 
 waii a territory. Under the United States supreme 
 court decision in the insular cases, in May, 1901, the in- 
 habitants of the Philippines and Porto Rico are entitled 
 to full protection under the Constitution, but not to the 
 privileges of United States citizenship until congress so 
 decrees, by admitting the countries as states or organ- 
 izing them as territories. 
 
 DOMESTIC RATES OF POSTAGE 
 
 All mailable matter for transmission by the United 
 States mails within the United States is divided into 
 four classes, under the following regulations. (Domes- 
 tic rates apply to Canada, Mexico, Cuba, Tutuila, Porto 
 Rico, Guam, Hawaii, the Philippines, and certain places 
 in China served through the United States postal agency 
 at Shanghai.) 
 
 Flrst-Ciass Matter. — This class includes letters, post- 
 al cards, "post cards," and anything sealed or other- 
 wise closed against inspection, or anything containing 
 writing not allowed as an accompaniment to printed 
 matter under class three. 
 
 Rates of letter postage to any part of the United 
 States, two cents per ounce or fraction thereof. 
 
 Rates on local or drop letters at free delivery of- 
 fices, two cents per ounce or fraction thereof. 
 
 Rates on postal cards, one cent (double or "reply" 
 cards, two cents). Nothing must be added or attached 
 to a postal card, except that a printed address slip" not 
 larger than 2 inches by % of an inch may be pasted 
 on the address or message side. The addition of any- 
 thing else subjects the card to letter postage. A card 
 containing any threat, offensive dun, or any scurrilous 
 or indecent communication will not be forwarded. 
 Words on a postal card indicating the occupation of 
 the addressee, used to better identify him, are regarded 
 
90 BUSINESS MAN'S ENCYCLOPEDIA, 
 
 as a part of the address; anything more — as the repeti- 
 tion of the words on a postal card, etc., business or the 
 several capacities in which the addressee serves, the 
 various kinds of goods dealt in, and similar attempts 
 at advertising — on the address side of the postal card 
 is not regarded as a "proper description of the per- 
 son," and will subject the postal card to the letter rate. 
 Cards that have been spoiled in printing or otherwise 
 will be redeemed from the original purchasers at 75 
 per cent of their face value, if unmutilated. 
 
 "Private Mailing Cards," "Post Cards," bearing writ- 
 ten messages may be transmitted in the domestic mails 
 at the rate of a cent apiece, stamps to be affixed by 
 the sender; such cards to be sent openly in the mails. 
 
 Rates on specially delivered letters, ten cents on 
 each letter in addition to the regular postage. This 
 entitles the letter to immediate delivery by special mes- 
 senger. Special delivery stamps are sold at postoffices, 
 and must be affixed to such letters. An ordinary ten- 
 cent stamp affixed to a letter will not entitle it to spe- 
 cial delivery. The delivery, at carrier offices, extends 
 to the limits of the carrier routes. At non-carrier of- 
 fices it extends to one mile from the postoffice. Post- 
 masters are not obliged to deliver beyond these limits, 
 and letters addressed to places beyond must await de- 
 livery in the usual way, notwithstanding the special de- 
 livery stamp. 
 
 Prepayment by stamps invariably required. Postage 
 on all letters should be fully prepaid, but if prepaid 
 one full rate and no more they will be forwarded, and 
 the amount of deficient postage collected on delivery; 
 if wholy unpaid, or prepaid with less than one full rate 
 and deposited at a postoffice, the addressee will be noti- 
 fied to remit postage; and if he fails to do so, they 
 will be sent to the dead letter office; but they will be 
 returned to the sender if he is located at the place of 
 mailing, and if his address be printed or written upon 
 them. 
 
 Letter rates are charged on all productions by the 
 typewriter or manifold process, and on all printed imita- 
 tions of typewriting or manuscript, unless such repro- 
 ductions are presented at postoffice windows in the 
 
BUSINESS LAW, 91 
 
 minimum number of twenty identical copies separately 
 addressed. 
 
 Letters (but no other class of mail matter) will be 
 returned to the sender free, if a request to that effect 
 is printed or written on the envelope. There is no 
 limit of wight for first-class matter fully prepaid. 
 
 Prepaid letters will be reforwarded from one post- 
 office to another upon the written request of the per- 
 son addressed, without additional charge for postage. 
 The direction on forwarded letters may be changed as 
 many times as may be necessary to reach the person ad- 
 dressed. 
 
 Second-Class Matter. — This class includes all news- 
 papers and periodicals exclusively in print that have 
 been "Entered as second-class matter" and are regu- 
 larly issued at stated intervals as frequently as four 
 times a year, from a known office of publication or 
 news agency, to actual subscribers or news agents, and 
 transient newspapers and publications of this class 
 mailed by persons other than publishers. Publications 
 having the characteristics of books and such as are not 
 subscribed for on account of their literary merits, but 
 because of other inducements, are not eligible to sec- 
 ond-class privileges. Also periodical publications of 
 benevolent and fraternal societies, organized under the 
 lodge system and having a membership of a thousand 
 persons, and of the bulletins and proceedings of strictly 
 professional, literary, historical, and scientific associa- 
 tions and institutions, trade unions, etc., provided only 
 that these be published at stated intervals not less than 
 four times a year, and that they be printed on and be 
 bound in paper. Publishers who wish to avail them- 
 selves of the privileges of the act are required to 
 make formal application to the department through the 
 postmaster at the place of publication, producing satis- 
 factory evidence that the organizations represented 
 come within the purview of the law, and that the ob- 
 ject of the publications is to further the objects and pur- 
 poses of the organizations. 
 
 Rates of postage to publishers, one cent a pound or 
 fractional part thereof, prepaid in currency. Publica- 
 tions designed primarily for advertising or free circu- 
 
92 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 lation, or not having a legitimate list of subscribers, 
 are excluded from the pound rate, and pay third-class 
 rates. 
 
 Second-class publications must possess legitimate 
 subscription lists approximating 50 per cent of the num- 
 ber of copies regularly issued and circulated by mail or 
 otherwise. Unless they do pound-rate privileges are 
 revoked or withheld. 
 
 Whenever the general character and manner of issue 
 of a periodical publication is changed in the interest 
 of the publisher, or of advertisers or other persons, by 
 the addition of unusual quantities of advertisements, or 
 of matter different from that usually appearing in the 
 publication, or calculated to give special prominence to 
 some particular business or businesses, or otherwise — 
 especially where large numbers of copies are circulated 
 by or in the interest of particular persons — the second- 
 class rates of postage will be denied that issue; and if 
 there be repeated instances of such irregularities, the 
 publication will be excluded from the mails as second- 
 class matter. 
 
 Such "Christmas," "New Year's," and other special 
 issues, including "Almanacs," as are excluded from 
 second-class privileges by the terms above specified may 
 be transmitted by mail only when prepaid oy postage 
 stamps at the rate applicable to third-class matter 
 — one cent for each two ounces or fraction thereof. 
 
 Publications sent to actual subscribers in the county 
 where published are free, unless mailed for local de- 
 livery at a letter-carrier office. 
 
 Rates of postage on transient newspapers, maga- 
 zines, or periodicals, one cent for each four ounces or 
 fraction thereof. It should be observed that the rate 
 is one cent for each four ounces, not one cent for each 
 paper contained in the same wrapper. This rate ap- 
 plies only when a complete copy is mailed. Parts of 
 second-class publications or partial or incomplete copies 
 are third-class matter. Second-class matter will be en- 
 titled to special delivery when special delivery ten-cent 
 stamps are affixed in addition to the regular postage. 
 
 Transient second-class matter must be so wrapped 
 as to enable the postmaster to inspect it. The sender's 
 
BUSINESS LAW. 93 
 
 name and address may be written in them, but any 
 other writing subjects the matter to letter postage. The 
 name and address of the sender may also be written 
 on the wrapper. 
 
 Third-Class Matter. — Mail matter of the third class 
 includes printed books, pamphlets, engravings, circu- 
 lars in print (or by the hectograph, electric-pen, or 
 similar process when at least twenty identical copies, 
 separately addressed, are mailed at postofRce windows 
 at one time), and other matter wholly in print, proof- 
 sheets, corrected proof-sheets, and manuscript copy ac- 
 companying the same. 
 
 The rate on matter of this class is one cent for each 
 two ounces or fraction thereof. 
 
 Manuscript unaccompanied by proof-sheets must pay 
 letter rates. 
 
 Third-class matter must admit of easy inspection, 
 otherwise it will be charged letter rates on delivery. It 
 must be fully prepaid, or it will not be forwarded. 
 
 The limit of weight is four pounds, except single 
 books in separate packages, on which the weight is not 
 limited. It is entitled, like matter of the other classes, 
 to special delivery when special delivery stamps are 
 affixed in addition to the regular postage. 
 
 Upon matter of the third-class, or upon the wrapper 
 or envelope inclosing the same, or the tag or label at- 
 tached thereto, the sender may write his own name, oc- 
 cupation, and residence or business address, preceded by 
 the word "from," and may make marks other than by 
 written or printed words to call attention to any word 
 or passage in the text, and may correct any typographi- 
 cal errors. There may be placed upon the blank leaves 
 or cover of any book, or printed matter of the third- 
 class, a simple manuscript dedication or inscription not 
 of the nature of a personal correspondence. Upon the 
 wrapper or envelope of third-class matter, or the tag 
 or label attached thereto, may be printed any matter 
 mailable as tiiird-class, but there must be left on the 
 address side a space sufficient for the legible address 
 and necessary stamps. 
 
 Fourth-Class Matter. — Fourth-class matter is all mail- 
 able matter not included in the three preceding classes 
 
94 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 which is so prepared for mailing as to be easily with- 
 drawn from the wrapper and examined. It embraces 
 merchandise and samples of every description, and coin 
 or specie. 
 
 Rate of postage, one cent for each ounce or frac- 
 tion thereof (except seeds, roots, bulbs, cuttings, scions, 
 and plants, the rate on which is one cent for each two 
 ounces or fraction thereof.) This matter must be fully 
 prepaid, or it will not be forwarded. The affixing of 
 special delivery ten-cent stamps in addition to the regu- 
 lar postage entitles fourth-class matter to special de- 
 livery. (See remarks under "first-class matter.") 
 
 Articles of this class that are liable to injure or de- 
 face the mails, such as glass, sugar, needles, nails, pens, 
 etc., must be first wrapped in a bag, box or open en- 
 velope and then secured in another outside tube or 
 box, made of metal or hard wood, without sharp cor- 
 ners or edges, and having a sliding clasp or screw lid, 
 thus securing the articles in a double package. The 
 public should bear in mind that the first object of the 
 department is to transport the mails safely, and every 
 other Interest is made subordinate. 
 
 Such articles as poisons, explosives, or inflammable 
 articles, live animals, insects, fruits or vegetable mat- 
 ter liable to decomposition, or substances exhaling a 
 bad odor will not be forwarded in any case. 
 
 Firearms may only be sent in detached parts. 
 
 The regulations respecting the mailing of liquids are 
 as follows: Liquids, not ardent, vinous, spirituous, or 
 or malt, and not liable to explosion, spontaneous com- 
 bustion, or ignition by shock or jar, and not inflammable 
 (such as kerosene, naphtha, or turpentine), may be ad- 
 mitted to the mails for transportation within the 
 United States. Samples of altar or communion wine are 
 mailable. When in glass bottles or vials, such bottles 
 or vials must be strong enough to stand the shock of 
 handling in the mails, and must be inclosed in a metal, 
 wooden, or papier-mache block or tube, not less than 
 three-sixteenths of an inch thick in the thinnest part, 
 strong enough to support the weight of mails piled in 
 bags and resist rough handling; and there must be pro- 
 vided, between the bottle and said block or tube, a 
 
BUSINESS LAW. 95 
 
 cushion of cotton, felt or some other absorbent suffi- 
 cient to protect the glass from shock in handling; the 
 block or tube to be impervious to liquids, including oils, 
 and closed by a tightly fitting lid or cover, so adjusted 
 as to make the block or tube water tight and to pre- 
 vent the leakage of the contents in case of breaking of 
 the glass. When inclosed in a tin cylinder, metal case, 
 or tube, such cylinder, case, or tube should have a lid 
 or cover so secured as to make the case or tube water 
 tight, and should be securely fastened in a wooden or 
 papier-mache block (open only at one end), and not 
 less in thickness and strength than above described. 
 Manufacturers or dealers intending to transmit articles 
 or samples in considerable quantities should submit a 
 sample package, showing their mode of packing, to the 
 postmaster at the mailing office, who will see that the 
 conditions of this section are carefully observed. The 
 limit of admissible liquids and oils is not exceeding 
 four ounces, liquid measure. 
 
 Limit of weight of fourth-class matter (excepting 
 liquids), four pounds. 
 
 The name and address of the sender, preceded by the 
 word "from," also any marks, numbers, names, or let- 
 ters for the purpose of description, such as prices, quan- 
 tity, etc., may be written on the wrapper of fourth- 
 class matter without additional postage charge. A re- 
 quest to the delivering postmaster may also be written 
 asking him to notify the sender in case the package is 
 not delivered. 
 
 Registration. — All kinds of postal matter may be reg- 
 istered at the rate of eight cents for each package in 
 addition to the regular rates of postage, to be fully pre- 
 paid by stamps. Each package must bear the name 
 and address of the sender, and a receipt will be re- 
 turned from the person to whom addressed. Mail mat- 
 ter can be registered at all postoffices in the United 
 States. 
 
 An indemnity — not to exceed $25 for any one regis- 
 tered piece, or the actual value of the piece, if it is 
 less than §25 — shall be paid for the loss of first-class 
 registered matter. 
 
96 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 Domestic Money Orders. — Domestic money orders 
 are issued by money-order postoffices for any amount 
 up to $100, at the following rates.: 
 
 For sums not exceeding $2.50, 3 cents; over $2.50 to 
 $5, 5 cents; over $5 to $10, 8 cents; over $10 to $20, 10 
 cents; over $20 to $30, 12 cents; over $30 to $40, 15 
 cents; over $40 to $50, 18 cents; over $50 to $60, 20 
 cents; over $60 to $75, 25 cents; over $75 to $100, 30 
 cents. 
 
 Stamped Envelopes. — Embossed stamped envelopes 
 and newspaper wrappers of several denominations, 
 sizes, and colors are kept on sale at postoflBices, singly 
 or in quantities, at a small advance on the postage rate. 
 Stamps cut from stamped envelopes are valueless; but 
 postmasters are authorized to give good stamps for 
 stamped envelopes or newspaper wrappers that may be 
 spoiled in directing, if presented in whole condition and 
 with satisfactory evidence. 
 
 All matter concerning lotteries, gift concerts, or 
 schemes devised to defraud the public, or for the pur- 
 pose of obtaining money under false pretences, is de- 
 nied transmission in the mails. 
 
 Applications for the establishment of post-offices 
 should be addressed to the First Assistant Postmaster- 
 General, accompanied by a statement of the necessity 
 therefor. Instructions will then be given and blanks 
 furnished to enable the petitioners to provide the de- 
 partment with the necessary information. 
 
 The franking privilege was abolished July 1, 1873, 
 but the following mail matter may be sent free by leg- 
 islative saving clauses, viz: 
 
 (1) All public documents printed by order of con- 
 gress, the Congressional Record and speeches contained 
 therein, franked by members of congress, or the secre- 
 tary of the senate, or clerk of the house. (2) Seeds 
 transmitted by the secretary of agriculture, or by any 
 member of congress, procured from that department. 
 (3) Letters and packages relating exclusively to the 
 business of the government of the United States, mailed 
 only by officers of the same, publications required to 
 be mailed to the librarian of congress by the copyright 
 law, and letters and parcels mailed by the Smithsonian 
 
BUSINESS LAW. 97 
 
 Institution. All these must be covered by specially 
 printed "penalty" envelopes or labels. (4) The vice- 
 president, members and members-elect and delegates 
 and delegates- elect to congress may frank any mail 
 matter, not over two ounces in weight, upon official or 
 departmental business. 
 
 All communications to government officers and to 
 members of congress are required to be prepaid by 
 stamps. 
 
 RATES OF POSTAGE TO REPUBLIC OF PANAMA. 
 
 Letters, 5 cents for each half ounce or fraction of 
 half ounce. 
 
 Postal cards, single, 2 cents; with paid reply, 4 cents 
 each. 
 
 Prints, 1 cent for each weight of two ounces or 
 fraction of two ounces. 
 
 Commercial papers, 1 cent for each weight of two 
 ounces or fraction of two ounces, with a minimum 
 charge of 5 cents. 
 
 Samples of merchandise, 1 cent for each weight of 
 two ounces or fraction of two ounces, with a minimum 
 charge of 2 cents. Registration fee, 8 cents. 
 
98 BUSINESS MAN'S ENCYCLOPEDIA, 
 
 BOOK II 
 BUSINESS METHODS 
 
 CORRESPONDENCE 
 
 The importance of letter writing, while considered 
 of theoretical value by many business men, is often 
 viewed from the standpoint that they themselves write 
 a good letter and should be therefore slow to change 
 their individual style to conform to another standard 
 than their own. The test of a business letter as of an 
 ad, is, does it do the thing required of it, i. e., get the 
 business in the best possible manner and to the best 
 advantage, — and, the business having been secured, — 
 it becomes the additional function of the correspond- 
 ence to cultivate it and "keep it coming." 
 
 ELEMENTS OF A GOOD BUSINESS LETTER. 
 
 The essentials which go to make up a good business 
 letter may be divided into two classes — mechanical 
 make-up, and contents. Before a letter can come into 
 existence the mechanical side must be attended ta 
 The subject matter may be pertinent and well com- 
 posed and yet the letter itself be so arranged typo- 
 graphically and so disposed on the page that the unity 
 of the whole is lost. The display as a whole should 
 balance. Before the stenographer starts the address, 
 calculation should be made as to how many lines the 
 letter will run and as to how it should be disposed on 
 the page. The body of the letter should neither be 
 crowded near the top nor bottom of the sheet, but 
 should be so placed that, viewed in connection with the 
 letter head, it presents a well balanced and artistic 
 effect. This effect is often underrated, being in fact 
 passed by without a thought by the average stenog- 
 rapher, and the ordinary business man is so busy seeing 
 that his dictation is correctly transcribed that he gives 
 little thought to this essential. Harmony of color effect 
 should be observed. A yellow paper bearing the firm 
 announcement in blue, the letter in green and signed 
 with purple ink is not to be recommended. 
 
BUSINESS METHODS. 99 
 
 Letters blurred in copying and wet from the press 
 or otherwise violating the rule of neatness cannot help 
 but produce an unfavorable impression. Orthography 
 and capitalization, particularly of proper names, should 
 be exact and uniform. A misspelled word in the body of 
 a letter, particularly if a mere transposition of letters 
 in typewriting, may occasionally slip in and do no par- 
 ticular damage, but the misspelling of the name of the 
 party addressed may lose an order, and cannot help but 
 militate against the general effect of the letter. Neat- 
 ness — uncompromising neatness — that should be the first 
 effect of a letter, giving the idea that the firm putting 
 out the writing is thorough master of the minor (as 
 well as the major) details of its business. 
 
 Contents. — In letter-writing, contents may be divided 
 into subject matter and expression. The subject mat- 
 ter is, broadly speaking, what the writer says. This 
 should coincide with two other things — (1) what the 
 writer wants to say, and (2) what the one addressed 
 wants to know. Something which is the a b c of life 
 and a mere matter of routine to the writer in a certain 
 line may be abstruse and complicated to a non-technical 
 reader. To avoid an offensive simplicity of language on 
 the one hand and excessive technicality on the other 
 is one of the tests of a good business correspondent. 
 There is a tendency to slight simple questions asked by 
 different inquirers day after day, which must be avoided 
 by putting oneself in the place of the one asking the 
 question, and giving the knowledge for which he is 
 looking. 
 
 One of the most, if not the most, important essen- 
 tials of a good business letter lies in correct expression. 
 The one thing which causes more failures in business 
 correspondence than any other, is the incorporation of 
 personal peculiarities in a letter. There may be called 
 to mind, in fact, more than one established business 
 backed by ample capital, having a broad field and 
 financed by capable and conservative business men, 
 that is at the mercy of a poor correspondent. This is 
 ably expressed by Forrest Crissy, who says: 
 
 "So apparent must be the importance of this branch 
 (tact and tone in business letters) of business system- 
 
100 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 atization, that scarcely a word of argument is needed 
 to enforce its necessity. Very recently a large whole- 
 sale merchant said to me: 1 have recently been obliged 
 to discharge the head of my credit department — my 
 confidential man. He is honest, conservative and shrewd, 
 but recently I have been awakened to the fact that his 
 incapacity to write a letter which does not leave a sting, 
 a chill, or at least a sense of lofty indifference, is hurt- 
 ing my business more than would some downright 
 reckless blunders. When he writes a letter granting a 
 good customer a larger line of credit he gives it a twist 
 that somehow makes that customer wish he hadn't 
 asked for credit and thus placed himself under added 
 obligations. And if he refuses to meet the request for 
 such a favor the refusal is so put that it seems a studied 
 effort to conceal a strong unwillingness to give any 
 credit at all. Yet this man has always considered him- 
 self an adept in letter-writing — and for a time he com- 
 pletely hypnotized me into that view. But at last the 
 steady withdrawal of patronage and the occasional out- 
 spoken retorts which his letters provoked forced upon 
 me a recognition of the real condition of affairs. Then 
 I went out after a man who could write a business let- 
 ter that had just the right ring to it; that was neither 
 so sloppy that it sounded hypocritical or so stiff and 
 stilted that there was no tone of good hearty business 
 friendliness in it. I have found him. He comes high, 
 but the difference in results is remarkable. Of course, 
 there are other things required than this form of lit- 
 erary ability — if that's what you'd call it. He must 
 have business experience, business judgment and all 
 the other cardinal business virtues; but the addition 
 of this peculiar capacity to write business letters that 
 hit the mark is a rare gift and makes him a star man.' " 
 
 Simplicity and clearness as an element of expression 
 cannot be rated too highly. The saying of a thing in 
 the plain language of the common people, not only acids 
 to the style and dignity of a letter, but has the most 
 vital element of being understandable. As Chas. R. 
 Weirs says, "Eloquence, either real or imaginary, has 
 no place in a business letter." 
 
 Whatever else may be neglected in writing, courtesy 
 
BUSINESS METHODS. 101 
 
 should not be slighted. A man may be told nearly 
 anything face to face — it is qualified by the bearing, 
 tone of voice, manner and earnestness of the speaker. 
 A sentence may be given an entirely different meaning 
 by a tone or gesture — it may even be diplomatically 
 changed after partly spoken, to make it conform to 
 the unconscious demand of the listener, and most of all 
 — spoken speech is transient. What is written, on the 
 other hand, is put down in black and white to stay. 
 The record is permanent. It can be offered in evidence, 
 can be dug up years afterwards from a musty file, and 
 discourteously written can queer, not only an imme- 
 diate sale, but the sales of a decade. 
 
 Length. — Letters often tend to verbosity from the 
 fact that they are dictated instead of written. Were a 
 man to write his letters himself with pen and ink he 
 would study brevity and conciseness of expression, but 
 having letters written for him, he will dictate more 
 than he would write. Brevity is not always desirable. 
 Some people — particularly those receiving few letters — 
 like to receive lengthy correspondence. Getting few 
 letters, they wish those long and newsy. A letter is an 
 event to some patrons and cannot be too long for a 
 careful perusal. In this class of letters the party ad- 
 dressed may be often appealed to in conversational 
 style; as, "Judge of the goods yourself, Mr. Brown," 
 "We ask you, Mr. Smith, if we have not treated you 
 fairly?" etc. At the other extreme is the business man, 
 particularly the city business man. To him, brevity to 
 the point of curtness is always welcome. As someone 
 has alliteratively said, the formula for a business letter 
 to a busy man is: Sir: Say it. Stop! 
 
 Judging the Other Man's Letter. — One of the pre- 
 requisites of a good correspondent is the ability, in- 
 herent or acquired to judge the general character and 
 status of the writer by means of his letters. Until the 
 last few years the letter-head of a firm was a con- 
 siderable guide to the standing of the company putting 
 it out, but good printing is now much more common 
 and many one-horse concerns put out conservative, 
 well-gotten-up stationery. Ability to recognize the ef- 
 forts of an amateur or schoolboy inquiring for a cata- 
 
102 BU8INEiSS MAN'S ENCYCLOPEDIA. 
 
 log with no intention of buying and to treat the writer 
 accordingly, call for almost occult powers. The presi- 
 dent of one of the large machinery companies putting 
 out a cement mixer selling at $850.00, relates that one 
 of the company travelers visited Detroit in response 
 to an apparently good lead and found a twelve-year-old 
 boy wanted a dozen cement mixers "to go into the mail- 
 order business with." Some companies putting out ex- 
 pensive catalogs write a letter asking a doubtful in- 
 quirer to fill out an information blank before sending 
 a catalog. The correct interpretation of the personality 
 of a writer means the saving of dollars of expenditure 
 as well as the ability to write him correctly. In a fire 
 insurance concern employing hundreds of agents it 
 would be easy for a manager to inform himself through 
 his special agents as to each agent's nationality, educa- 
 tion, experience in the business, etc., and vary his cor- 
 respondence accordingly, while a mail-order house 
 might have no means of judging a man but by his bare 
 letter. 
 
 Form Letters. — A form .etter is one of a series of 
 letters, to be sent on similar occasions. Such letters 
 are usually in imitation typewriting with blanks left 
 for the name of the party addressed, and when care- 
 fully executed are a close imitation of a typewritten 
 letter. Form letters vary from those not to be distin- 
 guished from actual typewriting, to the stock letters of 
 collection agencies, in which no attempt is made to imi- 
 tate the machine. Some writers use a number of short 
 forms or inserts which they use in dictating to avoid 
 a repetition of dictation. 
 
 Letters of Recommendation. — The promiscuous wri- 
 ting of letters of recommendation has done much to 
 cheapen the effect of recommends. Many firms refuse 
 such letters entirely. Perhaps the best plan is to have 
 an employe, when leaving, use his former employer's 
 name as a reference. 
 
 CREDITS 
 
 The science of credits is not an exact one and not 
 one to which the same rules are applicable at all times 
 and for all lines of business. The endeavor of the credit 
 
BUSINESS METHODS. 103 
 
 man is to keep his losses as near the zero point as pos- 
 sible without needlessly limiting sales. 
 
 Knowledge Necessary to Credit Man. — The credit 
 man of a house selling a line of goods over an extended 
 territory should have a complete knowledge of the sev- 
 eral phases of business minutely associated with exten- 
 sion of credits. 
 
 General Financial Conditions. — The condition of a 
 territory as regards money is important. A compara- 
 tively small area may be experiencing business depres- 
 sion because of continued wet weather, extension of a 
 new railroad cutting off trade, crop failure, or similar 
 causes, while other territory in the same locality is en- 
 joying phenomenal prosperity. Some towns in local 
 option districts enjoy good trade at certain times only, 
 depending on the predominance of the "wet'* or the 
 "dry" faction. No condition affecting financial condi- 
 tions is too small to aid in determining the financial 
 future of a district. 
 
 Business Detail. — The cost of production, amount of 
 stock on hand, and in fact all the operative details of 
 his own business should be thoroughly understood by 
 the credit man. The more complete his knowledge is of 
 the details of his firm's business, the better he will be 
 able to judge wisely in putting out goods. 
 
 Knowledge of Customer's Business. — In order to 
 grant credits intelligently, a credit man should know 
 how the customer's stock balances, and what per cent 
 he is selling him. A buyer running a general store may 
 be rated good for $15,000, and yet $1,000 worth of a 
 certain line of goods may be in excess of his credit and 
 out of proportion to the remainder of his stock. 
 
 Knowledge of Finance and Law. — In judging the re- 
 lation of incoming money to the financial strength and 
 policy of his house, the credit man should know some- 
 thing of finance, while a knowledge of the law of 
 credits, collections, exemptions, bankruptcy and allied 
 subjects is of vital importance. 
 
 SOURCES OF CREDIT INFORMATION. 
 
 To bring the making of credits down to a systematic 
 and scientific basis there are four sources from which 
 
104 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 the credit man may draw: Mercantile agencies, re- 
 ports from the trade, reports from the salesmen, re- 
 ports from local banks or attorneys. 
 
 Mercantile Agencies. — The report of a mercantile 
 agency is the basis from which a credit man can work, 
 all additional information qualifying the report given 
 him. His past experience must determine its degree of 
 accuracy and to what extent a report is to be abso- 
 lutely relied upon. The effect upon the merchant of the 
 existence and supervision of the agency, is a salutary 
 one, giving an extra incentive to keep his commercial 
 record clean. 
 
 Trade Information. — By exchanging information with 
 other credit men in the same or allied lines of trade, 
 many problems in credits may be simplified. Such in- 
 formation, however, has the disadvantage of being slow 
 to secure, as a merchant's creditors may be widely 
 separated. 
 
 Salesmen's Reports. — Information from salesmen, 
 under ordinary conditions, is peculiarly valuable. The 
 salesman is posted as is no one else by frequent visits, 
 knows the buyer's strong and weak points, the general 
 condition of trade in the town and surrounding coun- 
 try, and if shrewd, can intuitively sense the moral haz- 
 ard of an account from actual contact with all the con- 
 ditions surrounding it. If a salesman reports his opin- 
 ion of each risk assumed by the house it does not take 
 long to tell the value of his observations and whether he 
 possesses the capacity for giving a dependable rating. 
 
 Local Sources. — Information obtained from local 
 sources is open to various faults, partiality or hostility 
 to the one reported on or indifference to the correct- 
 ness of the report, being among the number. Banks 
 often take the attitude that they are not called upon to 
 make a report, particularly upon a customer not a de- 
 positor and of whom they have no accurate knowledge 
 other than of a general nature. Attorneys' reports are 
 of all kinds, frequently carelessly irresponsible, the ordi- 
 nary attorney not being an accurate judge of the finan- 
 cial condition of a business man. 
 
BUSINESS METHODS, 105 
 
 COLLECTIONS 
 
 In collections the main thing is to get the money 
 when due. This is more than it seems on the face of 
 the statement. The ideal condition will never be 
 reached when each customer pays his account when 
 due, asking and expecting no favors. 
 
 Prompt Payments. — Customers can be educated to 
 the fact that payments are to be met unconditionally at 
 maturity of account. Prompt payment of bills is no 
 more to ask of a customer than is the prompt delivery 
 of goods ordered by him. The country trade often takes 
 this stand: "We buy of your house. They should con- 
 sider it a favor to get our trade. Hence, if we desire 
 to wait a few days in the payment of a certain bill, the 
 house should not hurry us, as one overdue account can- 
 not make any difference to them." This stand would be 
 comparatively reasonable if the credit man could know, 
 first, the exact condition of the business affairs of the 
 debtor; second, that he desired a reasonable extension, 
 and was not simply ignoring communications with a 
 view of not giving them a square deal. As collections 
 are made, this tendency must be combated and over- 
 come, and those customers habitually making such an 
 excuse must be educated otherwise. 
 
 Rendering Statements. — Statements should be ren- 
 dered at the time the account matures, not the first and 
 the fifteen of each month. Then the statement as sent 
 means something decisive — "remittance expected." 
 
 Sight Draft. — The efficacy of a sight draft as a 
 means of collection except in small towns or country 
 neighborhoods where a bank holds up merchants close 
 to the credit line, is fast growing less. There was a 
 time when the return of a draft meant impairment of 
 credit for the debtor, but that does not now always hold, 
 particularly when the draft is drawn through a bank 
 other than the one at which the drawee does business. 
 It aids to no small degree to send drafts through the 
 bank at which the debtor has his deposit. If he has 
 not the money to take up the draft he cannot give an 
 evasive request for return, the notification is much more 
 liable to be, "Wants extension, — will write." Some 
 
106 BU8INE88 MAN'S ENCYCLOPEDIA. 
 
 houses have a rule to draw through the First National 
 Bank, if there be one. This is not to be recommended, 
 as both the bank and the customer will be better 
 pleased and result be much more satisfactory if the 
 bank at which the customer is a depositor is used. 
 
 Letters Following a Draft. — ^When a draft has been 
 refused payment, if the customer does not write imme- 
 diately, a tactful letter from the house should go forth. 
 This should not be a collection letter demanding imme- 
 diate payment, or worst of all, a form letter, but a 
 heart to heart letter, asking why payment has been de- 
 layed. 
 
 SPECIFIC APPLICATION. 
 
 Collections vary so much in character, size and sur- 
 rounding conditions that anything like a general rule 
 cannot be prescribed. Classified as to size, the follow- 
 ing methods may be considered representative: 
 
 Under Ten Dollars. — Where one or a number of 
 small collections are outstanding, a statement is first 
 sent to each debtor, followed in five days by a personal 
 letter, either with or without notice of draft to be drawn 
 in a specified time. After draft is drawn and refused 
 send collection to Justice of the Peace if delinquent 
 lives in small town or in the country. Justices of the 
 Peace commonly are very thorough in their collection 
 methods, are usually well acquainted in their district 
 and rarely if ever misappropriate funds, while their 
 charge is nominal, often being but 10 per cent, where 
 an attorney would charge several times that sum. Banks 
 often effect small collections, but seldom do more than 
 notify the delinquent. Bank charges on a collection are 
 uniformly reasonable. Collection agencies using the 
 "letter system" should be used sparingly if the trade 
 of the delinquent is a consideration. The "letter sys- 
 tem," in which a series of letters threatening suit, at- 
 tachment, and the like are mailed the delinquent, are 
 peculiarly effective for a list of country collections, the 
 cost averaging probably 50 per cent. Small collections 
 not closed off by the above method may be considered 
 practically worthless. Where trade is to be retained, 
 tactful personal letters following a statement are best. 
 
BUSINESS METHODS. 107 
 
 Ten to Fifty Dollars. — Accounts of this size may be 
 handled either as given above or through the local bank. 
 Where parties are good but slow, bank methods are 
 usually satisfactory. 
 
 Fifty to One Hundred Dollars. — To get immediate 
 results turn over to a collector, preferably one con- 
 nected with or vouched for by the house. Where a 
 debtor is in danger of becoming insolvent a bank or 
 attorney will often protect local creditors against en- 
 forcement of claims of an outside house. A collector 
 may often make a settlement by being on the ground 
 and obtaining security and so protect his house from 
 an assignment or failure of the debtor. 
 
 Upwards of One Hundred Dollars. — Collections of 
 this size and importance require personal attention. If 
 the debtor is within a reasonable distance, by tele- 
 phoning the correspondent of the house or a bank, in- 
 formation can be obtained, often more valuable than 
 would be written, and the condition of the debtor can 
 be judged accordingly, and the campaign mapped out to 
 conform to conditions reported. A rule in all collec- 
 tions should be to get the cash — if not, then unques- 
 tionable security, security that may be banked at not 
 to exceed 10 per cent discount. 
 
 City collections are materially different from country 
 collections, as the percentage of losses is much larger, 
 from removals and the better facilities afforded the dis- 
 honest or careless to avoid their obligations. An ener- 
 getic and tactful collector will affect the largest share 
 of city collections when the amounts are small. When 
 large collections come slow, a careful investigation 
 should be made to determine the cause. 
 
 Suit. — Suit as a rule is not advisable, except in cer- 
 tain cases, as when a debtor has the reputation of not 
 paying back accounts except when sued; when a debtor 
 has property which may be reached by an attachment, 
 etc. 
 
 BOOKKEEPING 
 
 Bookkeeping is the art of making a systematic rec- 
 ord of business transactions, so as to exhibit the re- 
 sources and liabilities of the business. The system in 
 
108 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 use in a busineKSS, the business itself or more often the 
 adaptation of the method of accounting to the require- 
 ments of the business, determine kind and number of 
 books used. When but a single book is used, it is 
 usually a simple book, similar in form to the common 
 day-book, in which are set down in the order of their 
 happening such transactions as are necessarily re- 
 corded. As it is not to advantage to bulk too many 
 accounts in one book, the cash-book, purchase-book and 
 sales-book are often used together. The principal book 
 of accounts is the ledger, it showing in classified 
 form all the records of the original books of entry. 
 
 Systems of Bookkeeping. — Two systems of bookkeep- 
 ing are in use, single entry and double entry. 
 
 Single entry is most commonly used by retail mer- 
 chants and other similar tradesmen. It keeps no ac- 
 count of property, personal accounts alone being shown 
 in the ledger, which, consequently balances only when 
 the business is closed out. Saving in labor over double 
 entry, it furnishes fewer checks against error. One of 
 its fatal objections for some classes of business is the 
 lack of detailed information shown regarding the 
 sources of gain or loss. This information, as clearly ex- 
 hibited by the double-entry balance-sheet is often an 
 absolute essential in the determination of profit. In 
 single entry, to determine capital at any time, the in- 
 ventory of resources and liabilities is taken; the differ- 
 ence between the totals indicating the capital. The 
 difference between present and former capital gives the 
 loss or gain. 
 
 Double entry bookkeeping requires that every 
 transaction be entered twice, first on the debtor side of 
 one or more accounts, and second, on the creditor side, 
 thus keeping the ledger in balance perpetually. 
 
 Debit and Credit. — The first law of double entry is 
 that every debit amount in one account must have a 
 corresponding credit amount in some other account, 
 and vice versa. The rule of debits and credits may 
 be thus summarized: 
 
 (1) Debit that which into the possession of the bus- 
 ness and costs value. (2) Credit that which goes out 
 of the possession of the business and produces value. 
 
BUSINESS METHODS. 109 
 
 Rules for Journalizing. — Besides the above general 
 rules the following specific ones may be given: 
 
 The proprietor is debited: (1) For withdrawals from 
 the business for personal use; (2) for liabilities as- 
 sumed by the business; (3) for net loss when the books 
 are closed. He is credited (1) For all investments in 
 the business; (2) for net gain when the books are 
 closed. 
 
 Property is debited, under its given name, when it 
 comes into possession of the business. It is credited, 
 under its given name when the busines parts with it. 
 
 Persons are debited (1) when they get into our debt; 
 (2) when we get out of their debt and are credited: (1) 
 When we get into their debt and (2) when they get out 
 of our debt. 
 
 Expense account, including rent, salaries, insurance, 
 etc., is debited for money paid out to carry on the busi- 
 ness and credited for the proceeds of the sale of any 
 Item previously debited to expense account. 
 
 Bills receivable are debited when received by the 
 business and credited when the business parts with 
 them. 
 
 Bills payable are debited when redeemed by the 
 business and credited when issued by the business. 
 
 Allowances, as interest, discount, collections, etc., 
 are debited under their given names, when allowed to 
 us by others, and similarly credited when allowed by 
 others to us. 
 
 Trial Balance. — The taking of a trial balance fre- 
 quently causes the student or bookkeeper a great deal 
 of waste time, such mistakes commonly arising from 
 errors in posting, though there is chance for an infinite 
 variety of mistakes to arise. The following rules are 
 of use in tracing errors: 
 
 Go over the additions of the trial balance. 
 
 Go over all additions of the ledger accounts. 
 . If not located, check your posting as follows: Trace 
 each item from the journal to the ledger, and if found 
 to be correct, place a check mark at the left of the first 
 money column in the journal and at the left of each 
 date column in the ledger. 
 
110 BUSINESS MAN'S ENCYCLOPEDIA, 
 
 Find the exact amount of error; if ten or some power 
 of ten, the error is usually in addition. 
 
 If the amount is exactly the same as some amount 
 in the journal, the error is probably with that amount. 
 
 If the amount of error is divisible by nine, the error 
 is probably in transposition of figures. 
 
 If dollars have been written as cents or vice versa, 
 dividing the difference by 9, 99, or 999, respectively, will 
 locate a figure which has been misplaced one, two or 
 three orders to the right or left. 
 
 Closing Set of Books. — Before attempting to close a 
 set of books, a correct trial balance must be had, and a 
 statement of the business should be made out. The state- 
 ment of the business will give the figures to be used in 
 closing the ledger accounts, and by its use all errors 
 will be avoided. The following definition should be kept 
 in mind: 
 
 Inventories show the value of the goods and property 
 remaining on hand. 
 
 Non-speculative accounts are those on which we do 
 not directly gain or lose. They are cash, personal bills, 
 payable and bills receivable. 
 
 Speculative accounts are those whose nature it is to 
 produce gain or loss. Merchandise, expense, and like 
 accounts belong to this class. 
 
 If the work of closing a set of books is performed in 
 the following order, there will never be any trouble as 
 to the result: 
 
 1. Enter inventories, in red ink, on the credit side 
 of the accounts to which they belong. 
 
 2. Close all speculative accounts to loss-and-gain 
 account. 
 
 3. Close loss-and-gain account to proprietor's ac- 
 count. 
 
 4. Rule all accounts that balance. 
 
 5. Bring down all inventories and the balance of 
 the proprietor's account. 
 
 A trial balance of the ledger at this point should ex- 
 actly agree with the resource and liability division of 
 the statement of the business. 
 
 The reason for taking a trial balance at this time is 
 that we may be sure that the books are in balance be- 
 
BUSINESS METHODS. Ill 
 
 fore we put any new business on them. For, when we 
 next attempt to take a trial balance, and it does not 
 balance, we would naturally look for the error in the 
 work of the month, when, quite likely, it would be in the 
 closing of the accounts or in the bringing down of the 
 balances, which a trial balance as just suggested would 
 have brought to light and all trouble from such an error 
 have been saved. 
 
 When a new business period is to be begun and the 
 old books used, no opening entry is necessary, as all the 
 accounts that would appear in such an entry are already 
 on the books. 
 
 PRICE MARKS 
 
 The use of a set of secret marks with which to mark 
 the price of goods is in universal use. As a rule the 
 buying price only is marked in these characters, the 
 selling price usually being in plain figures. 
 
 Arbitrary signs are sometimes taken to designate the 
 numerals, but as a usual thing a keyword is used, the 
 letters of which stand for the numerals. Following are 
 examples : 
 
 1234567890 
 
 VANDERBILT 
 
 In a similar way "MAKEPROFIT," "CALEBSMITH," 
 or "CHELMSFORD," could be used. A repeater is 
 sometimes used instead of writing a character twice. 
 
 INVESTMENTS 
 
 Those having money to invest may be classed in 
 three groups: First, those persons who wish absolute 
 safety of principal, permanency of investment, and regu- 
 larity in the payment of dividends; second, those per- 
 sons who are willing to take some risk, looking to a 
 higher dividend rate, and other incidental benefits, such 
 as business association with other stockholders, gain of 
 knowledge of corporation affairs, etc., to indemnify them 
 for lack of absolute security of the principal; third, 
 those having a comparatively small amount for invest- 
 ment and willing to risk their money in concerns openly 
 promoted for the purpose of enriching the backers if 
 
112 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 lucky, and with the expectancy of reaping large profits 
 in a new and untried field — not properly called invest- 
 ments. 
 
 Classes of Investments. — Investments are of two 
 classes: First, the class in which the investors become 
 the absolute owners of the securities, as in purchases of 
 real estate, government bonds, etc. — these being pur- 
 chase investments — and second, the class in which in- 
 vestors advance money upon the promises of borrowers 
 to return the money with interest, and upon the securi- 
 ties which the borrowers pledge or bind in support of 
 their promises, as in loans upon mortgages, — these be- 
 ing loan investments. 
 
 Margin of Safety. — In determining the worth of an 
 investment, the difference between the actual and per- 
 manent values of securities and the amounts of the cor- 
 responding investments is taken, this being termed the 
 margin of safety. It is evident that this margin will 
 vary in a direct ratio with the rate of income. A United 
 States Government bond, for instance, yields less than 2 
 per cent to the investor, a state bond may pay 4 per 
 cent, and a western farm mortgage 8 per cent. 
 
 Public Securities. — Government bonds open to pur- 
 chase have the advantage of safety, but the rate of in- 
 terest is so low as to put them out of the investment 
 class except where unconditional security is a prime re- 
 quisite. The bonds of states which have borne a good 
 financial reputation are comparatively safe. Municipal 
 bonds are now very popular investments, yielding 3^ 
 per cent to 5 per cent to the investor and at the present 
 time are good and safe. 
 
 Real Estate Securities. — Contrary to the general 
 opinion, real estate, improved or unimproved, is often a 
 poor investment. Improved property, subject to taxes, 
 depreciation, repairs, insurance, etc., often disappoints 
 the owner. Real estate bought to lease for others to 
 build upon is a good, but necessarily limited form of 
 investment. Farm lands in the middle west have made 
 fortunes for many in the past ten years, but taken year 
 in and year out they may be said to be only a fair in- 
 vestment. Farm mortgages are among the best invest- 
 ments for safety, convenience and rate of income of 
 
BUSINESS METHODS. 113 
 
 any line offered the investor. Such investments should 
 be passed upon by competent authority as to their 
 legality, title to property covered, whether first or sec- 
 ond mortgage, etc. Certain states have laws so framed 
 that foreclosure is difiicult and designed to protect the 
 debtor. Loans in such states should be avoided except 
 under exceptional conditions. 
 
 Building and Loan Associations. — Speaking from 
 wide experience in investments, David R. Forgan says: 
 
 "One of the worst forms of investment in real estate, 
 in my opinion, is building and loan associations. They 
 are gotten up in most attractive form to catch the 
 month's savings of thrifty people with moderate in- 
 comes. I know there are some of these in the older 
 parts of the country that are apparently succesful, but 
 my experience of them in the west leads me to consider 
 them as a whole almost the easiest concerns to get 
 your money into and the hardest to get it out that I 
 know. Their plan seems so simple that anyone can un- 
 derstand them; nevertheless one of my friends in Chi- 
 cago, who is a thorough accountant, lost the savings of 
 years in a building and loan association of which he 
 himself was the annual auditor." 
 
 Corporation Bonds. — Bonds of corporations, as well 
 as other securities should be purchased only after their 
 safety has been assured by actual experience. The first 
 issue, particularly of railroad bonds, is liable to contain 
 some "water," for which the immediate investor will 
 have to pay. Money should not be invested in bonds of 
 any enterprise, as those operating public utilities, until 
 the company is actually earning money to an amount 
 not less than twice that required to pay the interest on 
 its bonds. The reason for this is that the risk of 
 financing an enterprise lies with the buyers of bonds. 
 In case of success get but 5 per cent per annum, if a 
 failure they are the only losers. 
 
 Stocks. — There are two main differences between 
 bonds and stocks: (1) Bonds are a lien upon property 
 of some kind, while stocks frequently represent nothing 
 tangible other than earning capacity, good will and hope 
 of the future; (2) bonds bear a promise to pay both 
 principal and interest, enforceable at law, while a stock 
 
114 BUSINESS MAWS ENCYCLOPEDIA, 
 
 promises nothing, the stockholder becoming a part of 
 the company. This is often an* advantage, particularly 
 to a young business man, giving him a chance as a 
 stockholder to see the actual workings of a company, 
 identify himself with it and be elegible to hold office. 
 This is of particular value in a small town, as it often 
 identifies a man in a business way, strengthens his 
 credit and gains favors that would not otherwise be ex- 
 tended. 
 
 Wildcat Investments. — A large class of so-called in- 
 vestments are constantly being offered the public, such 
 as mining stocks, oil stocks, plantation stocks, etc. 
 Some of these are actual frauds, some partially fraudu- 
 lent, and all are risky. They are often promoted by 
 men having no means of their own and even if success- 
 ful are so managed as to give those on the inside the 
 profits. As a general rule rates of interest greater than 
 6 per cent or 7 per cent involve risks putting the in- 
 vestor in the speculator class. 
 
 SHORTHAND 
 
 The term stenography is often given to shorthand, 
 being used synonymous with it, John Willis in 1602 
 publishing a treatise entitled, "The Art of Stenography." 
 Phonography, tachygraphy and many other names have 
 been or now are designations of this art. 
 
 There are numerous systems of shorthand, probably 
 upwards of two hundred, but not more than ten of prac- 
 tical importance. The Pitmanic systems are the ones 
 most used, others not having the following of these sys- 
 tems. There are three editions of the shorthand of 
 Isaac Pitman, differing only in minor characteristics. 
 This system is used extensively in England and to some 
 extent in the United States. The Benn Pitman and 
 the Graham system are both extensively used, and 
 are very closely related, Graham using more devices for 
 increasing speed than Pitman. The Munson system is 
 used by a large number of shorthand writers. 
 
 The systems not Pitmanic vary from each other as 
 well as from Pitman writing. The letters of the Cross 
 Electic alphabet upon the form of an ellipse and there 
 
BUSINESS METHODS. 115 
 
 are five positions instead of three. The Gregg system 
 is written on the slope of longhand, has no position, 
 and joins vowels and consonants. 
 
 The speed at which shorthand can be written is a 
 much discussed subject. The ordinary public speaker 
 uses 130 to 180 words per minute, and 200 words per 
 minute is very fast writing and can be reached by few 
 writers for any length of time. Commercial speed 
 ranges from 80 to 100 words per minute. Few dictate 
 120 words per minute. 
 
 The following cut gives, in the Benn Pitman system 
 as in common use in the United States, a specimen of 
 shorthand writing. The Graham system — most used by 
 court reporters — is very similar to that of Benn Pitman, 
 but uses contractions and other expedients to a greater 
 extent. 
 
 .^S^-*) /JU>.__v-. ^ 
 
 
 r^^ 
 
 Transcript of the above notes: 
 
 "For the third time the Congress of the United 
 States are assembled to commemorate the life and the 
 death of a president slain by the hand of an assassin. 
 The attention of the future historian will be attracted 
 to the features which reappear with startling sameness 
 in all three of these awful crimes; the uselessness, the 
 utter lack of consequence of the act; the obscurity, the 
 insignificance of the criminal; the blamelessness — so far 
 as in our sphere of existence the best of men may be 
 held blameless — of the victim." 
 
116 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 MAIL ORDER BUSINESS / 
 
 There are two main divisions in the mail order busi- 
 ness; first, as carried on by a small dealer giving it his 
 whole attention; second, as transacted by an established 
 house, either as side issue to assist the traveling sales 
 department, or as in case of Montgomery Ward & Co. 
 and other catalogue houses, as a sole business. 
 
 The underlying principles of the business are the 
 same in all cases, differing only in application. The 
 requisites for a successful start may be briefly outlined 
 and if conscientiously followed out will bring a degree 
 of success depending only upon the extent of the field 
 and the closeness of the application of the promoter. 
 
 Qualifications Necessary. — First, brain is of impor- 
 tance. The average beginner should employ the best 
 brain talent procurable, some one else's if not his own. 
 For the building of a permanent business, honesty must 
 be an asset as well as brain power. Houses now in the 
 field to stay are noted for the honesty with which they 
 treat all dealing with them. Sales over the counter may 
 be made on account of the locality of the store, even 
 though the goods are not up to standard and the pro- 
 prietor considered tricky, but a customer who has been 
 victimized by mail can never be depended on for an- 
 other order. 
 
 The smaller mail order journals and a certain class 
 of jobbers as well as some mail order writers hold 
 forth a glowing future for an inexperienced man start- 
 ing in the business with small capital — as one writer 
 terms it, **a man or woman of average intelligence, with 
 a capital of fifty dollars in cash, no experience, and 
 no influential friends, can start in business and spell 
 success in capitals at the end of one year's labor." 
 Where one such venture launched at an opportune time 
 by someone peculiarly fitted to the business, comes to 
 success, fifty fail for lack of capital and as many more 
 yield indifferent results. Says W. B. Powell on this 
 subject: "You cannot get rich on a three-line ad in a 
 mail order paper filled with advertising that makes 
 yours look like thirty cents. The mail order business 
 has gotten down to hard-pan basis. You have to have a 
 
BU8INES8 METHODS. 117 
 
 good article and considerable capital back of you, busi- 
 ness sense, and a tenacity of purpose that will not falter 
 within two or three years. You cannot get rich quick 
 on two or three hundred dollars. If you could, there 
 wouldn't be white paper enough to print the ads offered 
 the mail order publications." A beginner should have 
 sufficient capital — actual money in the bank — and a rea- 
 sonable credit to tide him over in case he needs money 
 temporarily. 
 
 Adaptability, as in other lines of business, is a prime 
 requisite. A business suited to one's taste is bound to 
 be a success eventually, and if not suited to it and the 
 promoter cannot adapt himself to its manifold require- 
 ments, he should lose no time in changing to one in 
 which he can put forth his full energies. 
 
 System. — The advantage of system in the mail order 
 business is fully set forth by Sydney A. Hale, who says: 
 *'You must have system in your business, and the best 
 is none too good. In no other business is the routine 
 and detail so great; in no other business is a most ac- 
 curate and most minute record of every transaction so 
 essential; in no other business is a handy record so 
 necessary. A good system is not necessarily an in- 
 volved one; on the contrary, inasmuch as system con- 
 sists in the elimination of labor, time and useless de- 
 tail, the simplest system is the nearest approach to per- 
 fection. It is the writer's experience that no one stock 
 system can ever prove adequate — only a system devised 
 essentially and especially to fill your own particular 
 needs. Whether it fills anybody else's need is not your 
 care; unless it can fill your own needs it should be 
 abandoned. A successful system must always be easy 
 of access; it must be accurate; it must be complete. 
 Money invested in perfecting a system is money saved. 
 Don't try to start business or life without them. It is 
 the man that has a system in both life and business 
 that wins the battles." 
 
 Advertising. — The vital part of a mail order business 
 once started is the advertising. Proper mediums must 
 be used, the ads must be well worded, displayed, and 
 placed; advertising effort must be continuous. 
 
 Promptness in Delivery. — Goods advertised should 
 
118 BUSINESS MAN'S ENCYCLOPEDIA, 
 
 be forwarded the buyer as soon as possible; there 
 should be no waiting on account goods being out of 
 stock or not yet delivered from the manufacturer. 
 
 Neatness. — Many beginners and even some estab- 
 lished firms underrate neatness in putting out goods. 
 Goods neatly labeled, mailed in a compact package care- 
 fully done up, appeal to the recipient at once. 
 
 Originality. — Originality in business methods and 
 personality in conducting a business are always at a 
 premium, and will go a long way toward bringing suc- 
 cess in selling by mail. 
 
 FIRE INSURANCE ADJUSTMENTS 
 
 In Case of Loss. — The ordinary business does not 
 suffer from loss by fire more than once or twice in a 
 lifetime. When a loss comes, he should be prepared to 
 see that he obtains every cent rightfully due him. 
 While it is an acknowledged fact that more losses are 
 overpaid than underpaid, in case of a small loss it is 
 probably as satisfactory a way to trust entirely to 
 the fairness of the adjuster. In case of a large or total 
 loss, if the insured shows that he fully comprehends 
 how the amount of his loss is being determined, he will 
 not fail to receive better consideration at the hands of 
 the company's representative. If not satisfied with a 
 loss, as adjusted, it is best to let it go to arbitration. 
 
 Rules for Determining Property Loss. — The following 
 rules and formulas are those used by adjusters in ascer- 
 taining the extent of a loss on stocks or personal prop- 
 erty, and show the methods adopted by them in such 
 cases. There is nothing new about them, and they are 
 perfectly familiar to everybody, and are to be found 
 in any arithmetic used in the common schools in our 
 land. Every school boy has learned them, but their 
 application to the adjustment of losses may be some- 
 thing that those who may not have had experience in 
 this particular line of business will find of assistance. 
 It should be remembered that cost to the assured is 
 the basis of the loss sustained, but not necessarily the 
 measure of the damage or loss; this may be more or 
 less according to the circumstances surrounding each 
 
BUSINESS METHODS, 119 
 
 case, and is undoubtedly affected by depreciation or 
 increased value. 
 
 Value of Property. — The question of values was for- 
 merly one that perplexed even the most expert adjust- 
 ers, and many complications have, in former years, 
 arisen because of the difference of opinions relative to 
 the value of merchandise in various or different hands; 
 but for many years the rule has prevailed, and common 
 custom may be said to have regulated this matter, until 
 at the present time it is generally conceded by all that 
 the question of value depends materially and almost 
 entirely upon the business of the party in whose pos- 
 session the merchandise is found. The insurance con- 
 tract contemplates only indemnifying a party in case 
 of fire against absolute loss, and the cost to him is the 
 basis of the estimate of the loss. In the case of a manu- 
 facturer the basis of the estimate would be the cost of 
 production. If the merchandise is in the hands of a 
 wholesale dealer, then the basis of the estimate would 
 be the price paid the manufacturer. If the merchandise 
 is in the hands of a retail dealer then the value would 
 be increased, and the basis of the estimate would be the 
 price paid the wholesale dealer. The same merchandise 
 in the hands of the consumer would be enhanced in 
 value, and the basis of the estimate would be the retail 
 dealer's price. 
 
 It will therefore be observed that the same merchan- 
 dise in various hands has different values, and in deal- 
 ing with the various losses that it may have four values, 
 according to the business the party is engaged in who 
 has sustained a loss, viz.: manufacturers, wholesale 
 dealers, retail dealers and consumers. 
 
 Definition of Terms. — The following terms are used 
 in adjustment calculations and are here defined for easy 
 reference : 
 gross cost. The entire cost of merchandise, including 
 
 all expenses, etc. 
 net cost. The entire cost of merchandise after all de- 
 ductions are made. 
 gross purchases. The amount of merchandise pur- 
 chased at gross cost. 
 
120 BUSINESS MAN'S ENCYCLOPEDIA, 
 
 net purchases. The amount of merchandise purchased 
 excluding freights, etc. 
 
 gross stock. The amount of merchandise on hand, val- 
 ued at gross cost. 
 
 net stock. The amount of merchandise on hand, valued 
 at net cost. 
 
 gross sales. The amount of merchandise sold. 
 
 gross inventory. The amount of merchandise invoiced 
 at gross cost. 
 
 net inventory. The amount of merchandise invoiced at 
 net cost. 
 
 expense account. All expenditures incident to the busi- 
 ness. 
 
 gross profit. The entire excess of pecuniary value re- 
 ceived from the sale of merchandise, over its cost. 
 
 net profit. The excess of pecuniary value received from 
 the sale of merchandise over its cost, less all ex- 
 penditures. 
 
 loss. The difference between the gross cost and the 
 prices received. 
 Purchases, less net sales, are equal to the stock on 
 
 hand. 
 
 Purchases, less stock on hand, are equal to the net 
 
 sales. 
 
 Purchases, less present inventory, added to the gross 
 
 profit, are equal to the gross sales. 
 
 Net sales, and stock on hand, are equal to the amount 
 
 of net purchases. 
 
 Net sales, added to the gross profit, are equal to the 
 
 amount of gross sales. 
 
 Gross sales, less gross profit, are equal to the amouijt 
 
 of net sales. 
 
 Gross sales, less gross profit, added to present in- 
 ventory, are equal to the amount of purchases. 
 
 To Ascertain Cost. — When the amount of gross sales 
 
 and rate per cent of gross profit are given, then to as- 
 certain cost: 
 
 Rule. — Divide the amount of sales by 1 (one dollar), 
 
 plus the rate per cent of profit, and the quotient will be 
 
 the net cost (this is simply the old rule to ascertain 
 
 present value) ; or the same result may be obtained by 
 
 dividing the amount of sales by the aliquot part of one 
 
BUSINESS METHODS, 121 
 
 hundred representing the per cent of profit, and the 
 quotient will be the net cost. If the goods are sold at a 
 loss, then to ascertain cost, divide the amount of sales 
 by 1 (one dollar), less the per cent of loss, and the 
 quotient will be the net cost; or from gross sales, de- 
 duct gross profits and the remainder will be the net 
 cost. 
 
 To Ascertain Purchases. — When the amount of gross 
 sales, rate per cent of gross profit, and net inventory 
 are given, to ascertain amount of purchases: 
 
 Rule. — Divide the amount of sales by 1 (one dollar), 
 plus the rate per cent of profit, and the quotient will be 
 the amount of net sales (this is the old rule for ascer- 
 taining present value). Add net sales to the inventory, 
 and the sum will be net purchases. 
 
 To Ascertain Stock. — When the amount of gross 
 sales, net purchases, and rate per cent of profit are 
 given, then to ascertain the amount of stock on hand: 
 
 Rule. — Divide the amount of sales by 1 (one dollar), 
 plus the rate per cent of profit, and the quotient will be 
 the net sales. Now, subtract the amount of net sales 
 from the net purchases, and the remainder will be net 
 stock. 
 
 To Ascertain Present Value. — ^When the gross 
 amount of sales and per cent of profit are given, then 
 to ascertain net sales or present value: 
 
 Rule. — Divide the value stated by 1 (one dollar), 
 plus the rate per cent of profit, and the quotient will be 
 present value or the net amount of sales. 
 
 Note. — You can never arrive at the correct present 
 value or the amount of net sales by multiplying the 
 gross sales by the rate per cent of profit, and deducting 
 this product from gross sales. 
 
 To Ascertain Sales. — When net purchases, rate per 
 cent of gross profit, and net inventory are given, to 
 ascertain gross sales: 
 
 Rule. — From purchases deduct inventory, the differ- 
 ence will be net sales. Multiply net sales by the rate 
 per cent of profit, the product will be profit in dollars 
 and cents, which added to net sales, will give the gross 
 Bales. 9 
 
122 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 To Ascertain Pep Cent of Profit or Loss. — Given, the 
 gain or loss, to find the per cent: 
 
 Rule. — Take the difference between the net cost and 
 the amount received from the sales, and divide by the 
 gross cost, and the quotient will denote per cent of 
 profit or loss. This is the old rule of dividing the gain 
 or loss by the number on which the per cent is reckoned 
 to ascertain the per cent of profit or loss. 
 
 To Ascertain Profit or Loss in Dollars and Cents. — 
 Given the cost and per cent of profit or loss: 
 
 Rule. — Multiply cost by per cent of profit or loss, 
 and the product will be profit or loss. Also find differ- 
 ence between net cost and amount received from sale 
 of merchandise. 
 
 To Ascertain Per Cent of Profit. — When net sales 
 and gross profit are given: 
 
 Rule. — Divide the amount of profit by the amount of 
 sales, and the quotient will be per cent of profit. (This 
 is the old rule of dividing the gain or loss by the num- 
 ber on which per cent is received to find the per cent 
 of gain or loss.) 
 
 To Ascertain Profit in Dollars and Cents. — When the 
 amount of net sales and per cent of profit are given: 
 
 Rule. — Multiply net sales by per cent of profit, and 
 the product will be profit. Also subtract net sales from 
 gross sales. 
 
 To Ascertain Per Cent of Profit. — When net pur- 
 chases, gross sales, and inventory are given, to ascer- 
 tain per cent of profit: 
 
 Rule. — Deduct purchases from inventory, and the 
 difference will be net sales. Subtract net sales from 
 gross sales, and the remainder will be gross profit. 
 Divide gross profit by net sales, and the quotient will 
 be rate per cent of profit. 
 
 To Ascertain Per Cent or Proportion of Loss. — ^When 
 the total loss, total insurance, and amount of each policy 
 are given: 
 
 Rule. — Divide total loss by total Insurance, and the 
 quotient will be the per cent or proportion of loss, then 
 multiply particular insurance by per cent of loss, and 
 the product will be particular loss; or, to use the Rules 
 
BUSINESS METHODS. 123 
 
 of Proportion, the formula would be: as the entire in- 
 surance is to the entire loss, so is each policy to its pro- 
 portion of the loss. 
 
 To Ascertain Per Cent or Proportion of Salvage. — 
 When total salvage, total insurance, and amount of each 
 policy are given: 
 
 Rule. — Divide the total salvage by the total insur- 
 ance, and the quotient will be the per cent of salvage. 
 Multiply particular insurance by per cent of salvage, 
 and the product will be particular salvage: or to use 
 the Rules of Proportion, the formula would be: as the 
 total insurance is to the total salvage, so is each policy 
 to its proportion of salvage. 
 
 Rules for Ascertaining Amount of Loss. — There are 
 several methods adopted by adjusters to ascertain the 
 amount of loss on stocks of merchandise, the general 
 principles involved in all are similar, although the 
 means adopted to arrive at the result differ in some 
 respects. Those in general use are given herewith: 
 
 FIRST METHOD. 
 
 1. From inventory or statement of stock on hand 
 at given date, deduct items not stock; also, items not 
 covered by the policy. 
 
 2. From remainder, deduct any charges included 
 for expenses, freight and drayage, and the remainder 
 ■will be net inventory or stock. 
 
 3. To net inventory or stock, add purchases from 
 time the inventory was taken to date of fire, and the 
 sum will be total net stock. 
 
 4. From total net stock deduct net sales, and the 
 remainder will be the amount of stock on hand at the 
 time of the fire. 
 
 5. From stock on hand, deduct cost value of mer- 
 chandise saved in sound and damaged condition, and 
 the remainder will be net merchandise loss. 
 
 6. From merchandise loss deduct value of commis- 
 sion goods. 
 
 7. From merchandise loss deduct discount on time 
 purchases to find cash cost. 
 
 8. From cash cost deduct for depreciation and 
 waste, to find present value. 
 
124 BUSINE^^S MAN'S ENCYCLOPEDIA. 
 
 9. To present value add freight and expense on net 
 loss, to give gross values. 
 
 10. To gross values, add damage allowed on mer- 
 chandise saved, and result will be the amount of the 
 \oss. 
 
 Note. — Exclude freight on purchases, sales and sal- 
 vages, and when you have ascertained actual cost, at 
 first hands of amount destroyed, add freight. This 
 places assured, as nearly as possible, as he stood pre- 
 vious to the fire. 
 
 SECOND METHOD. 
 
 The following may, perhaps, be regarded as a more 
 concise method, and one easier understood: 
 
 First. From inventory, or statement of stock on 
 hand at a given date, deduct items not stock; also, items 
 not covered by the policy. 
 
 Second. From remainder, deduct all items included 
 for freight and other expenses, and the remainder will 
 be net inventory or stock. 
 
 Third. To net inventory, or stock, add net pur- 
 chases from time the inventory was taken to date of 
 fire, and the sum will be the total net stock. 
 
 From total net stock deduct the following: 
 
 1. Gross sales, less profit agreed upon. 
 
 2. Net value of merchandise saved in a sound or 
 damaged condition. 
 
 3. Depreciation in values. 
 
 4. Discounts allowed for cash, on time purchases. 
 
 5. Value of commission goods. 
 
 Then to the remainder, add freight and expenses, as 
 well as the damages allowed on goods saved, and the 
 result will be the amount of the loss. 
 
 THIRD METHOD. 
 
 First. Take amount of net inventory, or statement 
 of stock on hand, at a given time. 
 
 Second. To this, add the amount of purchases from 
 date of inventory to time of fire. The sum thus obtained 
 will be the amount of stock. 
 
 Third. Deduct from the total amount of stock, cash 
 and credit sales from date of inventory to time of fire, 
 
BU8INES8 METHODS. 125 
 
 less the estimated profits, and the result will be the 
 stock on hand at time of fire. From this should be 
 deducted the depreciation in value agreed upon for 
 stock shopworn, out of date, etc.; also, value of mer- 
 chandise used in or by assured's family or other par- 
 ties, and not charged in account, and value of stock 
 saved in good order, as per inventory taken since the 
 fire, and the value of stock saved in a damaged condi- 
 tion, estimated by appraisers as sound; also, all com- 
 mission goods, and the result thus obtained will be the 
 net amount of the loss. 
 
 ADJUSTMENT FORMULAS, RETAIL STOCKS IN 
 COUNTRY STORES, ETC. 
 
 Adjusters frequently are required to use their in- 
 ventive faculties, in ascertaining the loss in country 
 stores, when, after a fire, it is found that all books, 
 papers, invoices, etc., have been destroyed. In such 
 cases the following formula will be of assistance: 
 
 FIRST METHOD. 
 
 DEBITS. 
 
 Capital invested $ 
 
 Present indebtedness 
 
 Ascertained gross profits 
 
 CREDITS. 
 
 Cash on hand at time of fire $ 
 
 Investments other than merchan- 
 dise 
 
 Expenses paid 
 
 Bills and accounts receivable... 
 
 Total $ 
 
 The balance between the accounts gives the amount 
 
 of merchandise on hand at the time of the fire, from 
 
 which the value of the goods saved should be deducted 
 
 to ascertain the amount of the loss. 
 
 SECOND METHOD. 
 DEBITS. 
 
 Total purchases, per invoice $ 
 
 Produce, etc., per ledger accounts 
 
 Cash purchases agreed ujpon (no vouchers) 
 
126 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 CREDITS. 
 
 Total debits as above $ 
 
 Less capital invested $ 
 
 Less present indebtedness 
 
 The remainder represents 
 cash from sales applied to pur- 
 chases; to this add: 
 
 Investments $ 
 
 Expenses 
 
 Cash on hand 
 
 Bills receivable 
 
 Book accounts receivable 
 
 The sum of these credits will represent the cash 
 sales, which are reduced by the per cent of profit to 
 cost basis in the usual manner, and the stock on hand 
 at time of fire is readily ascertained. 
 
 COSTS 
 
 Cost of Production. — ^Whether taken as a phase of 
 industrial engineering or accounting, the determination 
 of the cost of a manufactured product is of great im- 
 portance. The time was when prices were set by guess- 
 work or what seemed to be the price yielding a fair 
 profit, but that time is now past. While the selling 
 cost is dependent upon the demand and supply, the 
 manufacturer, not being able to regulate or forecast 
 what the probable demand will be, must know what the 
 cost of his product is to him, that he may not be drawn 
 into running his plant at a loss. 
 
 Outline of the Subject. — In the simplest form of 
 manufacture labor and material are the two prime fac- 
 tors of cost. When manufacture becomes more com- 
 plicated, as in the case of a machine-shop putting out 
 engines, boilers, etc., in order to obtain the factors 
 making up the selling price, divisions and subdivisions 
 must be made until the prime factors are reached. 
 For such a plant as mentioned^ the following would 
 be an outline: 
 
BUSINESS METHODS. 127 
 
 SELLING PRICE. 
 
 Cost. — I. 
 
 Prime Cost. 
 
 
 1. Labor in (a) Machine Shop; (b) 
 
 
 Foundry; (c) Drawing Room. 
 
 
 2. Material. 
 
 II. 
 
 Fixed Charges. 
 
 
 1. Insurance. 
 
 
 2. Depreciation. 
 
 
 3. Indirect (Non-productive) Labor. 
 
 
 4. Repairs. 
 
 III. 
 
 Selling Expense. 
 
 
 1. Office. 
 
 
 2. Salesmen. 
 
 
 3. Traveling. 
 
 
 4. Advertising. 
 
 
 5. Estimating. 
 
 
 (a) General. 
 
 
 (b) Drawing Room. 
 
 Profit- 
 
 
 Selling Price. — Referring to the foregoing outline it 
 will be seen tht the selling price is made up of two 
 main elements, (1) Cost (to make and sell — sometimes 
 called factory cost) and profit. The selling price is 
 not fixed by cost, but by demand and supply. No mat- 
 ter how cheaply a product may be made, if there is no 
 demand it can not find a sale. If producing cost is so 
 high as to be nearly prohibitive, the demand must be 
 strong enough to pay the necessary price. This condi- 
 tion is often obscured by the fact that many manu- 
 facturers regulate their prices by those of their com- 
 petitors. 
 
 Cost. — By cost, as used above, is meant all those 
 expenses necessary to complete the product and place 
 it on the market — in other words — selling price less 
 profit. 
 
 Prime Cost. — The material cost and labor cost of 
 producing an article by manufacture is prime cost. 
 
 Labor. — The labor entering into prime cost, is 
 direct labor, that is, the worker actually produces or 
 aids in the production of the thing made. Direct labor 
 is synonymous with non-productive labor. 
 
128 BU8INE88 MAN'S ENCYCLOPEDIA. 
 
 Material. — That which is used in the manufacture of 
 an industrial product is termed material. 
 
 Fixed Ciiarges. — This term is a general one, com- 
 prehending those elements entering into cost which 
 are an expense and yet not directly chargeable through 
 the process of manufacture to the finished product. 
 These as given are: (1) Insurance; (2) depreciation; 
 (3) indirect labor; (4) repairs. 
 
 Insurance. — Expense for indemnity against loss of 
 any kind is comprehended in the term insurance. The 
 most common form is insurance against fire, but almost 
 any possible contingency may be insured against. 
 
 Depreciation. — Depreciation is a lessening in value 
 from age and contributory causes. Buildings, machin- 
 ery, etc., used in any process lose in value by wear, 
 use, introduction of new processes, and many other 
 causes. Only the land on which a factory stands com- 
 monly appreciates in value, and such appreciation is 
 commonly not reckoned in cost computations. 
 
 Indirect Labor. — Labor which is necessary to make 
 direct labor effective, though not of itself producing 
 anything, or which is necessary as an adjunct to direct 
 labor is termed indirect labor. 
 
 Repairs. — Various operations become necessary to 
 restore worn, depreciated, or damaged machines, fix- 
 tures or buildings, such labor or material used being 
 known as repairs and being a part of fixed charges. 
 
 Selling Expense. — If a product were salable at the 
 factory door, no allowance would need to be made for 
 expenses necessary to make a sale. Modern commer- 
 cial methods necessitate the maintenance of an office or 
 often a series of offices to arrange, catalogue, and other- 
 wise prepare for and assist in the sale of the product 
 of the factory or works. Salesmen must be employed 
 to dispose of the output, traveling expense must be 
 allowed them and others attending to necessary busi- 
 ness, and various charges must be met for advertising. 
 
 Estimates. — Estimates fall under two heads: (1) Gen- 
 eral, as those drawn up for a concern not requiring 
 special machines; (2) drawing room, as those requiring 
 the special work of designers and draftsmen. If ex- 
 pensive drafts and patterns are made for use in the 
 
BUSINESS METHODS, 129 
 
 production of one machine and are actually used in its 
 manufacture, this machine bears the expense of the 
 patterns made, providing they are of no further use. 
 If they may be of use in future work, they may be 
 figured as investment. If drawn up to further a sale 
 and not used, selling expense is charged. 
 
 Profit. — From a technical standpoint, profit is not a 
 part of production cost. The manufacturer adds to 
 the cost to him such per cent as is possible for him 
 to secure, this giving the selling price or cost to con- 
 sumer. 
 
 Time-recording. — There are many methods of record- 
 ing the time of employees, the most common being the 
 use of some form of mechanical device imprinting on 
 an individual time-card the time of coming and going. 
 From these the time book or pay roll is made up. 
 
 Record of Time on Piecework. — To apportion cor- 
 rectly the time spent on each piece of work, the em- 
 ploy§ is provided with a card on which he notes the 
 time of beginning and finishing, this time being charged 
 against the particular job on which he was at work. 
 
 Analysis of Wages. — The individual time cards being 
 turned in and charged against the proper jobs, the total 
 of these cards will agree with the amount of weekly 
 wages paid and will serve as an exact guide to the 
 amount of work required upon all similar processes. 
 This record can be as minute as desired, embodying a 
 record for each separate process, branch of manufac- 
 ture, works order or stock number to which the items 
 may be charged, cross columns indicating the different 
 classes or even individual workmen employed* 
 
 Stores. — There should be a system for the accurate 
 recording of all transactions affecting stores. In a fac- 
 tory having several sections or branches each having 
 a separate stores department a requisition should issue 
 from the head of each department to the head oflice 
 for such stores as will probably be necessary in the 
 course of manufacture. The requisition should show: 
 (1) Description of material or article; (2) quantity; 
 (3) use designed for; (4) time required; (5) last supply 
 furnished ; (6) by whom supplied; (7) remarks. 
 
 If cost accounts are kept for each works, separate 
 
130 BUSINESS MAN'S ENCYCLOPEDIA, 
 
 invoices should be required for each division, but one 
 is necessary where the account is kept at the head 
 office. 
 
 Issue of Stores. — ^Duplicate orders consecutively 
 numbered and made out by the foreman or manager 
 of the department requiring stores are required before 
 such stores are issued. When issued, the issue is veri- 
 fied by the signature of the one ordering the goods. 
 An exact record of stores on hand should be kept at all 
 times or made up for reports at a specified time. A 
 periodical analysis covering the same time as the wage 
 analysis should be prepared, unless the requisitions 
 themselves are turned over to the head office for the 
 finding of prime cost data. 
 
 Work Orders and Stock Orders. — In large manufac- 
 turing plants no general expenditure of above a certain 
 sum, as $100, should be made without the authority of 
 the manager to be evidenced by a work order bearing 
 an estimate and authorization. 
 
 In factories manufacturing such articles as carriages, 
 furniture or similar smaller articles for stock, a stock 
 order should be issued for the making, to determine 
 the cost of the article or articles manufactured and 
 all expenditures should be charged against this stock 
 order number. 
 
 In continuous process factories as a sugar factory, 
 an arbitrary subdivision is generally made and charges 
 made against such subdivision. 
 
 Disposition of Scrap. — To obtain a fair price at which 
 sorap is to be rated, a standard should be fixed for usual 
 classes of material and changed only to conform to 
 market values. 
 
 Fuel. — Where coal or other fuel is bought in bulk 
 a record showing how it is distributed is kept and the 
 proper charge made against each division of the fac- 
 tory. 
 
 Systems in Use. — There are a large variety of sys- 
 tems of finding and recording costs in use, simple or 
 complex, depending upon the size of the factory or 
 works and complexity of the process employed. The 
 finding of costs is not an exact science, as it depends 
 for a part of its data upon inexact information, while 
 
BU8INES8 METHODS, 131 
 
 accounting authorities differ as to the correct disposal 
 of many charges and credits. Every manufacturer 
 should consider some system essential to a correct 
 administration of affairs. 
 
 WINDOW DRESSING 
 
 The fact that the sale of merchandise is furthered 
 by a display of some sort or other has always been 
 recognized, but the application of art to window dress- 
 ing and the recognition of this work as governed by the 
 rules of publicity and design is comparatively recent. 
 In 1890 there were but twelve professional window 
 dressers in the United States, while there are now 
 probably twelve hundred, besides thousands of clerks 
 and proprietors who spend a portion of their time get- 
 ting up a window display. 
 
 The Window. — To permit of dressing to advantage 
 the window should be large and have a base which 
 extends some distance back in the store and should 
 be set off from the store by a background, to concen- 
 trate the attention of the passers-by on the window 
 and not distract them by anything beyond. 
 
 Background. — In dressing a window the first thing 
 to be planned is the background, which must be in 
 keeping with the display, bringing it out and empha- 
 sizing the parts of which it is made up. The test of 
 a background is, **Does it bring out the articles shown 
 in strong relief, and harmonize with them in tone?" 
 A background may harmonize with a display either by 
 hlend or contrast, the former being the more pleasing, 
 the latter, however, having the advantage of being more 
 noticeable and hence more likely to attract attention. 
 The harmonious effect of a display is the same as in a 
 painting and should be governed by the same rules. 
 Displays of velvets, plushes, rugs, etc., naturally take 
 to harmony by blend, while a display calling for ob- 
 servance of detail would call for harmony by contrast. 
 A background when properly managed does not detract 
 attention from the goods displayed, but directs atten- 
 tion to them, which is the result aimed at. 
 
 Light. — It is impossible to overestimate the impor- 
 tance of proper lighting in window displays. No mat- 
 
132 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 ter how careful the arrangement or harmonious the 
 coloring, the work of the dresser is wasted, unless 
 properly lighted. An ordinary gas light in the center 
 of a window is bad, as it intervenes between the eye 
 and the objects shown, dazzling rather than illumina- 
 ting. 
 
 All properly constructed windows have a group of 
 several burners at the top and in front of the window, 
 with a large reflector so arranged as to throw the 
 rays of light backward and downward and concentrate 
 them upon the display. No other arrangement of light 
 is equally satisfactory. 
 
 At night the window shades should be drawn to a 
 point within about four feet of the bottom of the win- 
 dows, so that the only light that can be seen is re- 
 flected light. This makes the upper part of the window 
 very dark and intensifies the light at the lower part, 
 giving a more brilliant display. 
 
 Calors Affected by Light.— The effect of the light 
 used in a window — whether gas, electricity, kerosene, 
 etc. — on colors should be carefully noted and observed. 
 For instance, gas light will rob certain colors, as purple, 
 lilac, dark blue, violet, and green, of their brilliancy. 
 Displays having a harmonious color effect in the day- 
 time may look garish and flashy by artificial light. 
 
 Color Blending. — Color is by far the most obvious 
 means for attracting the eye, and the window dressed 
 in colors secures the attention of the passer-by at 
 once, far more readily than any mere ingenious ar- 
 rangement in which color is absent. Good color effects 
 are diflftcult to obtain where goods of a variety of colors 
 are used, and good taste seems to prefer the use of but 
 two or three colors complimentary to each other, and 
 as a rule grouped in large masses. 
 
 Where the primary purpose is to display as many 
 goods as possible without much regard for color-effect 
 or harmonious agreement, it is advantageous to dress 
 the window close up to the front, and fill it full enough 
 to entirely cover the space. Where color and form 
 are to be considered, fewer articles may be used; they 
 may be more widely spaced, and should be placed fur- 
 ther back. 
 
BUSINESS METHODS. 133 
 
 Loose plush coverings of a color to harmonize with 
 the general color scheme are often used for the bottom 
 of windows. This permits drapery over small boxes or 
 stands, the elevations and waved lines so produced add- 
 ing greatly to the effect of the goods displayed. 
 
 Objects of Window-Dresslng. — A window should be 
 decorated keeping in mind three principal objects: First, 
 to serve as an index to the class of goods kept in the 
 store; second, to attract the attention of people to the 
 store; third, to show goods which will excite in the 
 people the desire of possession — these rules being in 
 fact similar to the rules governing all publicity. 
 
 Special Features. — Besides the conventional dressing 
 usually given a window, showing goods carried by the 
 store making the display, special features are often re- 
 sorted to, sometimes bearing some relation to the 
 stock, and sometimes not. It seems to be an axiom 
 with window dressers that something moving will at- 
 tract a crowd and this idea is carried out by means of 
 animals, mechanical toys or effects, persons performing 
 some operation or process, etc. Particularly good spe- 
 cial features, as now used, are: A typewriter working 
 automatically, the keys being depressed by means of an 
 electrical connection; an exhibition of oriental rug 
 weaving by a native in costume; an automatic candy- 
 pulling machine, and others along the same line, par- 
 ticularly when directly advertising the thing to be sold. 
 Whether incomprehensibility, when resorted to, aids or 
 detracts from a display, is a mooted point among au- 
 thorities. A cage of monkeys in the window of a hard- 
 ware store might draw a large crowd, but whether it 
 would aid trade appreciably in the long run is open to 
 discussion. 
 
 Distinctive Displays. — One phase of special features 
 given more attention than formerly is in the matter of 
 having displays distinctive. The blue penciled cards of 
 Tom Murray, marking every window display of his 
 store, have become classic in advertising circles. A 
 Madison street clothier letters a daily talk on his win- 
 dows, both the language and the lettering being char- 
 acteristic. 
 
134 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 Appropriateness of Displays. — To secure the best 
 possible results the trimmer should constantly keep in 
 mind the appropriateness of his daily display to the 
 public. The class of people passing daily, the proba- 
 bility of drawing others by his store to view his dis- 
 play, the need of novelty, change and distinctive touch 
 in his word, and an observance of the rules of art as 
 well as the well-known rules of advertising will all 
 aid in augmenting the returns from his displays. 
 
 SIGNS 
 
 The use of signs to call attention to or designate a 
 business, forms an important portion of publicity. There 
 are two classes of signs — permanent signs, as a firm 
 name placed over a door or on a building, and tempo- 
 rary signs, as one noting the fact that a place has 
 changed hands. 
 
 Requisites of a Good Sign. — There are three primary 
 requisites of a good sign. First, a sign should not be 
 overcrowded with words, but should be as concise and 
 comprehensive as the nature of the case will allow. 
 Many signs are stultified by this fact alone, as people 
 have neither the time nor the inclination to stop to read 
 a sign having too much matter upon it. Second, the 
 letters themselves should not be crowded. Third, the 
 letters used should be of such a character as to be 
 easily read by anyone. 
 
 Permanent Signs. — The sign bearing the firm name 
 or an equivalent is of primary importance and calls for 
 a suitable location and easily read lettering. A com- 
 mon form of this sign is a board sign over an entrance, 
 the lettering being in Roman caps, the letters gilded 
 or silvered and having an iridescent background, made 
 by sifting on sand or ground glass while the paint is 
 fresh. Projecting signs extending perpendicularly from 
 a building and extending over the sidewalk are very 
 effective. Such signs usually bear letters in relief and 
 often are illuminated. 
 
 Signs are illuminated in various ways. A simple 
 and at the same time effective way is by having a row 
 of electric lights so disposed along the upper edge of 
 a sign as to illuminate the entire sign by means of a 
 
BUSINESS METHODS. 135 
 
 box reflector. The most common and probably the most 
 effective illuminated sign is the sign bearing electric 
 lights — either continuous or intermittent — upon the face 
 of the letters. A sign projected several inches from 
 the face of a building and having small holes bored 
 close together around the outline of the letters may be 
 illuminated by means of incandescent lights between 
 it and the building. 
 
 Window Signs. — A form of sign in common use in 
 windows is made by lettering in gold or silver the 
 wording or design on the inside of the glass, the design 
 being well backed with varnish to insure permanency. 
 Metal letters make very serviceable signs. These may 
 be classified into two divisions, those fixed outside a 
 window or sign, and those fixed inside, or concave and 
 convex. Solid copper and brass letters have been much 
 used for outside application and are of good appear- 
 ance, but possess the drawback of requiring daily clean- 
 ing. Concave letters are generally of stamped copper 
 with the inside face gilded and fixed against the inside 
 of the window. It is usual to outline in black the 
 letters on the window a trifle larger than metal. When 
 the paint dries the lip of the metal letter is cemented 
 over the painted one on the window, the face side then 
 showing a black outline with a concave gilded letter. 
 White enamel letters are very serviceable and require 
 little attention, being fixed to the outside of the glass. 
 
 Relief Signs, — Large wooden letters are often braced 
 from the tops of buildings so as to stand out in relief 
 against the sky. They are of simple construction and 
 often eight to ten feet in height, though appearing 
 much smaller from the ground. They stand perpendicu- 
 larly from the edge of the roof and are braced and 
 wired to stand the most violent storm. A thin sheet 
 metal letter is often used displayed upon a screen for 
 a relief sign. Large signs, readable a great distance 
 away, are fastened to a large gas pipe frame and are 
 a very striking form of advertisement. 
 
 Temporary Signs. — Included in this class are all 
 signs designed to be used for a limited time. They are 
 made in almost endless variety, both in the window ta 
 call attention to or aid in the display, or, inside the 
 
136 BUSINESS MAWS ENCYCLOPEDIA. 
 
 store to emphasize the policy of the firm or to call at- 
 tention to the goods. These may be made distinctive 
 and the best advertising, as already mentioned under 
 window dressing. Price tickets are used by all the 
 popular stores and by many catering only to the exclu- 
 sive. 
 
 Outside temporary signs, usually used in noting 
 closing-out sales, removals, auctions, etc., are usually of 
 stout cotton cloth stretched across the entire front of 
 the store, though enameled oil cloth or even Manila 
 pattern paper is used. 
 
 A form of temporary sign only within the reach of 
 the largest dealers and then only at certain times, is 
 obtained by the use of dead-wall space, during building 
 operations, the cost of such displays amounting to sev- 
 eral thousand dollars per sign. 
 
 Quality of Signs. — In having a sign made the mer- 
 chant should secure the best possible materials to 
 economize in wear and repairs, a competent workman 
 to produce an artistic sign, and should study to have 
 his sign characteristic of his business and in keeping 
 with it. So made and displayed with judgment a sign 
 will be found one of the best means of securing pub- 
 licity. 
 
 ADVERTISING 
 
 The importance of advertising for every class of 
 business needs no extended argument. Advertising mat- 
 ter occupies relatively the same place in business econ- 
 omy as a sales force, the purpose of both being to make 
 a sale. A direct sale is one coming directly from an 
 advertisement, as an order for a book from one who 
 has seen the advertisement in a paper, or indirect, as 
 a sale made of a proprietary article because of adver- 
 tising displayed on a billboard, so creating a demand 
 for the article or turning a demand already created 
 toward it. 
 
 Mediums. — The character of advertising varies with 
 the article offered for sale, and such medium is used as 
 will, in the judgment of the advertiser, produce results. 
 
 General advertising is conducted through a variety 
 of publications, street-cars, billboards, etc., with the 
 
BUSINESS METHODS. 13T 
 
 idea of creating a call for the advertised article from, 
 the various dealers throughout the territory covered. 
 
 Local advertising is conducted through the newspa- 
 pers, assisted by street-car and billboard advertise- 
 ments, and often supplemented by the distribution of 
 circulars or the mailing of letters to buyers in a lim- 
 ited territory. 
 
 Mail order advertising originally was conducted in. 
 a class of publications known as "mail-order month- 
 lies," as those published in Augusta, Maine, — papers, 
 designated to circulate in the rural districts, cheaply^ 
 compiled and printed, and sold at a low subscription- 
 price. These papers still have a large circulation and 
 are used for mail-order advertising; but practically alii 
 the high-class publications, particularly those of a gen- 
 eral nature, carry a large percentage of ads now classed, 
 as mail-order advertising. 
 
 Kinds of Ads. — Advertisements may have numerouSn 
 classifications as to form, from the announcement ad 
 affected by many clothiers, to the blanket ad of the de- 
 partment stores. A common and increasing class of 
 ads may be embraced in the term "freak ads." Nearly 
 every manufacturer and promoter puts a freak ad on. 
 the market at one time or the other, some being unquali- 
 fied successes. The present fashion in this class of 
 ads is to leave the reader in doubt as to part of the 
 wording, which is afterwards supplied. A familiar ad of 
 this class was the one asking "What did the Woggle-bug: 
 say?" displayed in the newspapers and on billboards, 
 and after a week's time being merged into a newspaper 
 and book advertisement. 
 
 Object of an Ad. — The real object of all advertising 
 is to sell. No matter what other virtues an ad may 
 have, if it does not sell goods — sell enough to make it 
 profitable — it is a failure. Attention attracted is of 
 value, but attention to the point of buying is the only 
 thing that counts. 
 
 Results. — The results of mail order advertising may 
 be shown by keying ads, there being several methods. 
 Some firms use, "Dept. A" for one periodical, "Dept. B'* 
 for another, and so on. Others change the firm name„ 
 or a portion of it, as "Chas. A. Ransom," "Chas. B. 
 
138 BU8INES8 MAWS ENCYCLOPEDIA. 
 
 Ransom," etc. A common key is a variation of the 
 street number, building number, building name, etc. 
 Ads occupying a page — and sometimes a smaller space 
 — often bear a tag to be filled out and forwarded. These 
 bear a key-word or number and are an exact index to 
 the pulling power of a medium. Many concerns re- 
 quest inquirers to ask for a special folder, booklet or 
 catalog and judge of the value of a medium by the 
 replies containing that particular request. 
 
 To judge exactly of the value of general or local 
 advertising is not an easy matter. A method to be 
 recommended is as follows: Take two equally good 
 values — give them the same space in each of the daily 
 papers. Have both ads written up in the same vein — 
 have both illustrated with the article advertised, and 
 take very good care that both things advertised are of 
 equal value. Then tabulate the results. Later on in the 
 week advertise the same article in the two dailies, only 
 transpose the ads. Tabulate the results and compare. 
 Do the same with the weekly papers, and so determine 
 the relative values of the different mediums. 
 
 Wording. — To write a good ad, say in brief what you 
 have to sell and why people should buy it. Use concise 
 wording, the language of the common people; let the 
 words be short. Short words economize space, are 
 easily understood and enforce and drive home the truths 
 the writer wishes to convey. 
 
 Force should be combined with two other qualities, 
 grace and versatility. The ad stands in the position 
 of a salesman and should present the subject forcefully, 
 easily, and in a manner peculiar to itself. In consid- 
 ering the choice of words, remember the methods used 
 by the good salesman or the good business man and 
 apply them. 
 
 Prices. — In general advertising, prices are of prime 
 importance; in retail advertising, they are absolutely 
 essential. The object of an advertisement being to sell 
 goods, the advertisement must answer those questions 
 liable to come into the mind of the reader, and the ques- 
 tion of price is always an important one. First, give 
 the introduction, so worded as to attract the attention, 
 next the talk concerning the goods — concise and inter- 
 
BUSINESS METHODS. 139 
 
 esting — and finally give the price in unmistakable 
 terms. This does not apply to very high-priced goods, 
 or goods intended only for exclusive trade. Such goods 
 generally sell regardless of exact price. 
 
 Display. — An advertisement must be different and 
 look different than other ads if it is to be fully effective. 
 This is accomplished by a different display. By dis- 
 play is meant the arrangement of the type used so as to 
 give prominence to certain parts of an ad. It is really 
 ihe contrast between the dark and the light portions. 
 When originating a poster or other work in which vari- 
 ous colors may be used, contrast may be brought out 
 by the use of different colors for different parts, as a 
 catch-line in red and the body in dark blue. But the 
 adwriter for newspaper work must limit himself to 
 blacks and whites, and intermediate grays — and so dis- 
 tribute them as to produce an effective result. 
 
 Preparation of Advertising Copy. — The rough draft 
 of an ad is usually laid out about three times larger 
 than it is to appear in print. It is always well to make 
 a penciled lay-out in the rough, conveying the general 
 effect the ad is to have when complete. The illustra- 
 tion on page 140 shows a rough draft, the prelimi- 
 nary idea — the details being worked out later. The 
 general scheme of this blocking out would be: First, 
 heavy border separating the ad from the gray of the 
 page, framing it away from adjoining matter; second, 
 the heavy mass effect of the headline and footline; 
 third, the gray of the body. To avoid an even effect 
 and give a distinctive finish to the balance, the headline 
 and body are not margined the same. There is plenty 
 of white space to balance the heavy blacks of the bor- 
 der and head, and footlines. 
 
 Importance of the Rough Draft. — Even the most ex- 
 perienced advertising man will find the rough sketch of 
 the utmost importance in giving him the idea of what 
 is to follow. If this sketch is correctly laid out and 
 balanced, the writing of the advertisement becomes a 
 very simple matter, as it is easy to take up the ad, 
 line by line and part by part, completing each in logical 
 order so as to evolve a harmonious and effective whole. 
 
 Second Rough Draft. — In working out the details of 
 
140 BUSINESS MAN'S ENCYCLOPEDIA. 
 
BUSINESS METHODS. 141 
 
 an ad the writer takes liis first sketch, and duplicating 
 the border on another sheet, fills in the display head 
 and catch-lines in approximately the same size as the 
 type to be used. This may be done roughly and if 
 occasion demands, in rapid sketchy strokes, so as to be 
 quickly completed. Accuracy of lettering or fineness of 
 effect need not be especially sought after, as long as 
 the lettering and writing is legible and the spelling, 
 capitalization, and punctuation accurately and clearly 
 indicated. Unimportant errors will be seen and cor- 
 rected, either by the compositor in setting or the proof- 
 reader in reading the ad. 
 
 In the lettered rough draft shown on page 142, 
 representing the second stage in the writing of a rail- 
 road ad, the first three lines constituting the main catch- 
 line are first drawn. The second catch-line, "South- 
 western R. R.," will usually be a "stock" catch-line, that 
 is a line used as a sort of trade mark, and varying only 
 in size — never in lettering — on all the stationery and 
 advertising matter of the road. If this is the case, it 
 simplifies the writing that much, as it has only to be 
 indicated and the cut supplied, besides it aids the writer 
 in knowing how the display will look. The display type 
 is lettered in, the body is proportioned as desired, the 
 words are given plenty of room on the page and the 
 ad is ready for the compositor. 
 
 Indicating Types to Be Used. — Whether or not to 
 Indicate the style of type and kind of border to be used 
 depends upon circumstances. Usually — and particularly 
 when indicated as in the lettered-in draft just mentioned 
 — it is best to trust to the judgment of the compositor. 
 Type-setters doing the composition on ads should be, 
 and in the best offices are, men possessing considerable 
 practical artistic ability as well as mechanical dex- 
 terity and have little or no need of any other informa- 
 tion than shown by copy correctly blocked out. When 
 copy is sent to an office where a firm has not done 
 business or when an ad embodying any peculiar fea 
 tures is required, border and types might well be indi- 
 cated. This is done by writing the name and size on 
 the margin opposite the matter to be so set, and con- 
 necting the two by a Wne. as in proof-reading. 
 
142 
 
 BU8INES8 MAN'S ENCYCLOPEDIA. 
 
 SEORTESTilllffi- 
 
 3E3T TIMES 
 St. LOUIS 
 
 «/»^^ St. J5yu^,7^. 0/fe. 
 
 
 "ttUd 
 
 Uraxj, 
 
 5 
 
 ourt -western. K.lL i 
 
 atv Office.: |» Gfj-a^vcC ?>t. * 
 StsLttoK /CeKtevSt. 
 
 TeL. 'Vloi.cJk. 3Z,7. 
 
BUSINESS METHODS. 143 
 
 Analysis of the Printed Advertisement. — The two 
 
 points of display are the announcement of the "shortest 
 line to St. Louis,'* and the title of the road. These are 
 the two most important features and hence bear the 
 largest display. Were but a casual glance to be given 
 to the ad it would be enough to create the thought in 
 the reader's mind, "The Southwestern Railroad is the 
 shortest line to St. Louis." 
 
 The three paragraphs following are of nearly equal 
 importance and bring out the following points: (1) 
 Leaving time of various trains; (2) a pleasant time 
 while riding because of completeness and fineness of 
 the train; (3) rate for trip, reasonable enough to make 
 the reader wish to go. These three paragraphs might 
 be transposed and not lose their effect, the final para- 
 graph, however, introducing the "personal element" or 
 "direct appeal" to the reader, "Why not go this way, 
 TO-DAY," should stand at or near the last, so as to 
 leave the question with the one reading the ad. The 
 location of the city ofiice, station, and the telephone 
 number of the ticket oflace fall naturally after the name 
 of the road. 
 
 Stock Catch-Lines. — These have already been re- 
 ferred to in a preceding paragraph, and defined as a 
 distinctive word or line always used to designate the 
 f rm name. It is safe to state that over 50 per cent of 
 tlie larger firms doing business to-day make use of a 
 distinctive device embodying the name of the firm, and 
 sometimes the address. As a variant of this a pithy 
 sentence or short motto is often used accompanying 
 the name of the business. Railroads often use such a 
 catch-line: "The Albert Lea Route;" "The Burlington 
 Route;" "The Sunset Route," are examples. Often a 
 part of a name is always displayed and made more im- 
 portant than the remainder. Thus the Consolidated 
 Fire and Marine Insurance Company is one of a large 
 number of fire and marine insurance companies doing 
 business in the same field, hence the catch-line "CON- 
 SOLIDATED," is always displayed by them. 
 
 Distinctive Borders and Composition. — Some firms 
 go further and have all ads set having a distinctive 
 border adapted by them or even cut to their order and 
 
144 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 SHORTEST LINE 
 BEST TIME TO 
 ST. LOUIS 
 
 Our best tram leaves 
 Ckicago daily at 11.03 A.M., 
 arrives St. Louis 7.30. Other 
 trains at 3.05 and 9.30 P. M. 
 
 V estiDuled trains, easy ridmg 
 cars, courteous attendants — 
 all kelp to make a deligktrul 
 journey. 
 
 Round trip rates $6.00, good 
 in ckair cars only ; $8.00 
 good on entire tram. 
 
 Why not go this -way today? 
 
 Southw^estern R. R. 
 
 City Office, 11 Grand Street 
 Station, 1 Center Street Telephone Black 327 
 
BU8INESS METHODS. 145 
 
 copyrighted. This border may bear no relation what- 
 ever to the goods or product sold by the firm, being 
 designed simply to attract by its artistic effect, and by 
 continuous use be associated by the public with that 
 particular firm using it. A better device if circum- 
 stances permit its use, is one representing the particu- 
 lar article the advertisement is exploiting; thus a firm 
 advertising watches could use a border of watches, an 
 ink manufacturer a border of ink-bottles, etc. It is 
 common for regular advertisers to use ads always hav- 
 ing the same general appearance owing to arrangement 
 and typographical display. Uniformity of composition, 
 if not insisted on to the point of sameness, is always 
 good for continuous advertisers, particularly if an estab- 
 lished house is advertising their customary line. 
 
 An example of a distinctive border is illustrated on 
 page 146. The upper half represents the completed 
 ad, the lower half the first rough sketch. The border 
 is the outline of the distinctive design adopted by the 
 advertising road and besides being of greater use in 
 attracting immediate attention to the ad than a plain 
 border, it is an extension of the use of the design 
 adopted by the railroad for its catch-line, which consists 
 of a black background the shape of this border and 
 bearing in white letters the name of the system. 
 
 Selling Points. — The main point of display in this ad 
 is the price, $6 and $8, the lower half (sketch only 
 shown) being devoted to the strong points of this line 
 over its competitors. 
 
 Pirating Distinctive Designs. — One of the annoy- 
 ances to which a live adwriter or firm is subjected to, 
 is the imitation of successful designs and schemes 
 bearing the stamp of originality and distinctiveness. 
 While there is often no recourse against such an act 
 on the part of another advertiser, yet the spirit of fair 
 play often acts as an offset to whatever is gained, as a 
 reader will often reason that a firm which has no more 
 originality than to copy another's design can not treat 
 its customers better. When such imitation of a de- 
 sign, device or trade-mark comes under the head of 
 unfair competition it may be stopped by legal pro- 
 ceedings. 
 
146 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 $6 and $8 
 
 ST. LOUIS 
 
 and Return 
 
 $6 tickets good in chair and club- 
 room cars (no extra charge). 
 
 $8 tickets honored in sleepers and 
 parlor ca,rs. 
 
 Tickets on sale December 24, 2S, 26, 
 81; January 1 and 2; good to return 
 until' J^lnuary 4. 
 
 *-w*«Mia«^SSjia 
 
 =1 
 
BUSINESS METHODS. 147 
 
 Accuracy of Facts in an Advertisement. — It would 
 seem superfluous to say that exact accuracy of facts is 
 an absolute necessity in an ad, both in pictorial rep- 
 resentation and in general statements, but often ads 
 run at considerable expense in a high class medium 
 bearing such evident errors, as to be of no effect as an 
 advertising medium. An ad occupying li/i columns in 
 a leading monthly magazine, makes the following re- 
 markable statement under the head, "What 16 Horse 
 Power Means:" 
 
 "The mechanical definition of one Horse Power 
 means the power necessary to lift 33,000 pounds one 
 foot per hour. Sixteen actual horse power would there- 
 fore lift 528,000 pounds one foot an hour.'* 
 
 The adwriter of course meant to say "one foot per 
 minute," and "one foot a minute." As if this were not 
 enough inaccuracy in one ad, the artist had represented 
 an arrangement of pulleys hitherto unknown to science, 
 to support the 528,000 lbs., in which the supporting 
 rope frays to small cords apparently glued to the block 
 which holds the 528,000 lb. engine in suspension. 
 
 Space occupied by an ad having one or more evident 
 errors is worse than wasted and error of any kind 
 should be guarded against by careful revision, especially 
 if the matter written about is of a technical character. 
 
 illustrations in Newspaper Advertising. — The use of 
 cuts to strengthen advertising matter is nearly uni- 
 versal. Any picture will serve to catch the attention, 
 but if not in keeping with subject in hand, if not to the 
 point, it does not serve the purpose of telling something 
 about the goods for sale. Stock cuts should be avoided 
 under all circumstances. The use of illustration is so 
 common that the reader is liable to recognize the dis- 
 parity existing between the cut and the text or between 
 the cut an(5 the goods, and it cannot help but react 
 upon the advertiser. Then, too, the cut should be 
 adapted to the paper, printing and ink with which it is 
 used. 
 
 Kinds of Cuts. — The simplest form of illustration is 
 the outline cut. This was much in use several years 
 ago and is still employed for some purposes. Shaded 
 cuts are liable to smudge on fast or lon^ runs and 
 
148 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 should not be used unless they are sure to print well. 
 The cut now most in use and appearing to the best 
 advantage is the hand stipple. This is a pen and ink 
 drawing the shading effect of which is derived from 
 stippling instead of lining. If not reduced too fine in 
 the engraving process it prints well, even on coarse 
 paper and from a stereotype. Half-tones have two disad- 
 vantages, the mechanical difficulty in securing a good 
 result in printing, and the absolute fidelity with which 
 they reproduce the original — if a photograph. The for- 
 mer imperfection may be obviated by using a coarse 
 screen, but this does away with necessary detail: the 
 latter disadvantage may be remedied by going over the 
 photograph and adding such lines as are necesary and 
 taking out those which are not needed. Wood engrav- 
 ings are comparatively little used on account of cost. 
 
 If an advertiser has but one cut and wishes to use 
 it for several newspapers, he can get a number of pa- 
 pier mache impressions or matrices from any of the 
 daily newspapers on his list. These matrices are very 
 handy and can be mailed with an ad with very little 
 cost. 
 
 Display of Illustrations. — The same general rule 
 should be observed in the display of cuts as in the dis- 
 play of type. Being an important part of the ad, it 
 should stand out, should not be crowded or have the 
 appearance of having been put in anywhere. 
 
 Types. — The adwriter at all times tries to have his 
 type in keeping with the medium which he is using, 
 the article which he is advertising and the class of 
 people to which he is making his appeal. For in- 
 stance, an announcement of a sale of art goods would 
 call for script. Old English, or a similar type. Cer- 
 tain lines of trade are associated with utility and call 
 for a serviceable type, as De Vinne for display, and a 
 body type of leaded small pica. In trade papers adver- 
 tising heavy machinery, steel rails, etc., the substantial, 
 heavy-faced Gothic is much used. 
 
 Borders. — A border to an ad acts the same as a 
 frame to a picture, throwing it into bold relief. A box 
 of four rules about a price or an article is of great use 
 in making it show up in a large or blanket ad. 
 
BUSINESS METHODS. 149 
 
 Sizes of Type. — The size of type is expressed in two 
 ways. Old-time printers designate types by their old 
 names, as nonpareil, brevier, long primer, pica, etc., but 
 now the common designation is by points. A point is 
 1-72 inch and 6-point nonpariel would be 6-72 inch in 
 width (or heighth of letter). Type faces are not always 
 of the same size as the body, thus we may have a 
 6-point face on 8-point body. 
 
 The following table gives the old names of type 
 bodies and their designation in points: 
 
 Number 
 Name — Points. 
 
 Ruby SVa 
 
 Diamond 4^ 
 
 Pearl 5 
 
 Agate 5% 
 
 Nonpareil 6 
 
 Minion 7 
 
 Brevier 8 
 
 Bourgeois , ^ 
 
 Long Primer 10 
 
 Small Pica 11 
 
 2-line Minion or English 14 
 
 2-line Brevier 16 
 
 Great Primer 18 
 
 2-line Long Primer or Paragon 20 
 
 2-line Small Pica 22 
 
 2-line Pica 24 
 
 2-line English 28 
 
 5-line Nonpariel 30 
 
 4-line Brevier 32 
 
 2-line Great Primer 36 
 
 Double Paragon 40 
 
 7-line Nonpareil 42 
 
 41 line Small Pica or Canon 44 
 
 4-line Pica 48 
 
 9-line Nonpareil 54 
 
 5-line Pica • 60 
 
 6-line Pica 72 
 
 Type Faces. — Type faces may be divided according 
 to the nature of their use into two distinct classes: 
 (1) Body or text types, used for plain paragraph mat- 
 
150 BU8INES8 MAN'S ENCYCLOPEDIA. 
 
 ter, such as that of books and newspapers; (2) fancy- 
 types, used for displayed matter, such as that of jobs. 
 
 Body or text faces may be subdivided again into 
 several classes, of which only two may be considered: 
 (1) Old style; (2) modern. The difference between 
 these faces may be noted with a little practice. Old 
 style has a lighter effect than modern, and the figures 
 do not line at top and bottom. The most striking char- 
 acteristic of modern is the contrast between the light 
 and the heavy strokes. Old style and modern faces 
 should not be mixed; a book or job should be set in 
 one face or the other — ^not, as is too often the case, 
 having both used indiscriminately. 
 
 Technical Knowledge Necessary. — A certain amount 
 of technical knowledge of printing is necessary to the 
 successful writing of an ad. Theoretically, at least, a 
 man should be a printer and know what is possible to 
 be done by the compositor, proofreader, and pressman, 
 as, even a minor change may mean a considerable de- 
 lay and an expenditure of an amount of money out of 
 proportion to the results obtained. The tables and rules 
 and other technical information given in another sec- 
 tion of this book will often be of service. 
 
 Proof Reading. It is important that anyone having 
 to do with advertising should understand the various 
 marks used in proof reading. An explanation of such 
 characters is fully given under the head, "Marks Used 
 in Proof Reading," to which the reader is referred. 
 
 SHORT CUTS 
 
 A Dictation Help. — When letters are dictated to 
 stenographers, spoken names and addresses are often 
 misunderstood. A good method to avoid error is to 
 number the letters and simply designate them by num- 
 ber when dictating. In this way the correspondence 
 may be turned over to stenographers to secure full 
 addresses without danger of error. 
 
 To avoid the possibility of giving the same number 
 to more than one letter, use a series of small numbered 
 cards. Attach these cards to the letters with small 
 
BUSINESS METHODS, 151 
 
 clips, to be removed, arranged and returned to the 
 stenographer at the close of the day. — C. E, Locke. 
 
 Employe's Record. — It will be found decidedly ad- 
 vantageous, especially in shops where a large number 
 of people are employed, to use a workingman's card 
 system. For each employe a card should be used, which 
 should contain his name, residence and number and 
 the department in which he is employed. On this card 
 should be entered the employe's daily, weekly and 
 monthly record, together with reasons for absence and 
 cause of discharge, in such an event. In large factories 
 it is almost impossible for the executive heard of the 
 oflBce to know personally the army of employes, and 
 the record suggested will enable him at a glance to de- 
 termine not only the qualifications of any certain em- 
 ploye, but to determine also whether one is deserving 
 of advancement or an increase of salary. 
 
 The system is simple and effective. 
 
 Letter Forwarding. — The old style letter forwarding 
 book with its record of millions of mistakes and count- 
 less inconveniences has been superseded by the modern 
 system which is gradually finding its way into usage 
 in hotels and post-offices. It is no longer necessary to 
 depend on the book that has been worn out and many 
 pages of which are missing. In its place is the neat 
 desk drawer cabinet, with its system of alphabetical 
 filing, the cards of which never show the wear and need 
 never be lost. When an order for forwarding letters 
 is received the name and necessary memoranda is writ- 
 ten on a small 3x5 card which is filed in the cabinet in 
 alphabetical order. The card provides space for full 
 instructions for hotel clerk or postmaster and its use is 
 a guarantee of accuracy. 
 
 Sealing Letters. — To save time and energy in moist- 
 ening the gummed flaps of envelopes, the following sim- 
 ple scheme is used by a number of business houses. 
 The flaps of the envelope are extended and placed on 
 the desk or table with the gummed surface exposed and 
 overlapping the flap of the envelope placed on top of it. 
 In this way the gummed surfaces of several dozen en- 
 
152 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 velopes may be exposed at a time. A moistened sponge 
 brushed gently over this surface will sufficiently dampen 
 the gum to allow the envelope to be sealed. This proc- 
 ess is much quicker than to moisten each flap individu- 
 ally, and it applies the moisture uniformly on all the 
 envelopes. 
 
 To save time in sealing these flaps, a small clothes 
 wringer may be used to advantage. The machine may 
 be easily attached to the edge of a table or desk. By 
 passing the envelopes with the moistened flaps through 
 this machine several hundred envelopes an hour may be 
 evenly and securely sealed. 
 
 Subscription List. — Publishers of daily and weekly 
 papers should have one system for keeping track of 
 subscribers who receive their paper by mail, and one 
 which makes each account directly accessible to any 
 employe of the office, whether he keeps circulation 
 books or not. Subscribers a^re likely to call for a state- 
 ment of account at any time and the circulation clerk 
 is liable to be out, or otherwise engaged. 
 
 When an order is received it should be made out 
 on a card and sent to the mailing room for the name 
 and address to be set in type on the mailing list. The 
 card should at once be returned to the office, together 
 with a copy of the mailing list. A clerk should check 
 the list against the card to avoid error. 
 
 When a subscriber pays any amount on his subscrip- 
 tion, it should be posted on the card and the correct 
 date of expiration immediately placed on the mailing 
 list. 
 
 To insure against errors and annoyances the mailing 
 list should be checked with the card every time a pay- 
 ment is made. 
 
 Circularizing. — Many firms use the Blue Book of 
 large cities in their circularizing work. Sometimes it is 
 necessary to issue letters and announcements quickly 
 from a Blue Book list. If only one book of a city is 
 owned, only one addresser can be employed on the list 
 at a time. 
 
 As a book is somewhat expensive, and as the list is 
 
BUSINESS METHODS. 155 
 
 only used a few times each year, a small concern is not 
 prepared to purchase five or ten copies simply for 
 emergencies. 
 
 Though a firm has only one Chicago Blue Book, yet 
 it can put ten or twenty addressers to work at it. The 
 binding is removed and the "loose-leaf" man punches 
 holes through the margin of the book and fits it in a 
 loose-leaf cover. When the rush hour comes and the 
 envelopes are wanted quickly, the book may be divided 
 into as many parts as is required, and, with rings to 
 hold each section together, the work proceeds. When 
 the addressing is concluded, the parts of the book are 
 brought together again and put into their proper places, 
 and the book is complete. 
 
 This same short cut may be made with telephone 
 subscribers' books and other lists of this class. — Alex. 
 M, Damon, 
 
 Circularizing. — The knowledge that each customer 
 received the circulars each month without going to the 
 expense of paying duplicate postage is easily secured 
 by the following system: 
 
 Arrange the name and address of each customer on 
 the ledger on an addressing machine list, in the same 
 order as the accounts are arranged in the books. Each 
 month let the office boy address a set of envelopes to 
 all of these names. He can also print these same names 
 and addresses, together with the date on the state- 
 ments, thus leaving the bookkeeper nothing to do but 
 put in the items and amount due. To avoid waste, the 
 first time the list is printed a statement is headed for 
 all. Those that were not used at that time, because 
 some accounts were inactive or had discounted their 
 bill, would remain over and be used the next time 
 when no statement would be headed for these. Thus 
 a statement is always on hand for every account. The 
 bookkeeper would use all the envelopes addressed to 
 those who were entitled to a statement, and those re- 
 maining would be handed to the credit man for his in- 
 spection, showing him who had not made any purchase 
 during the month. A mark on the envelope by the 
 
154 BUSINESS MAN'S ENCYCLOPEDIA. 
 
 bookkeeper would indicate those who had discounted 
 their bill 
 
 A circular should be enclosed in each of the en- 
 velopes. This, too, can be done by a boy or girl in the 
 olRce. By this method every one on the list receives 
 the mail advertising regularly, and, as the postage must 
 be paid on the statement anyway, additional postage 
 Is paid only to the amount of those who would receive 
 no circular because they were not to have a statement. 
 — E. D, Dorsey. 
 
 Filing Correspondence. — For a man's personal cor- 
 respondence there is nothing equal to the vertical filing 
 system. 
 
 A folder is used for each regular correspondent, and 
 in this folder is filed all of the correspondence, in- 
 cluding the carbon copies of your replies. Then when 
 one wishes to refer to any letter he has all correspond- 
 ence before him. 
 
 These folders are filed on edge in vertical file 
 drawers, and may be arranged alphabetically or numer- 
 ically. The alphabetical arrangement is best suited for 
 a small volume of correspondence. 
 
 In many cases the correspondence is of such a na- 
 ture that it will be more often referred to by subject 
 than by the names of the correspondents. In such cases 
 the correspondence is indexed by subjects. A guide 
 card is used for each general subject and the folders 
 containing correspondence relating to that general sub- 
 ject are arranged in front of that guide. A separate 
 folder, appropriately labeled, is used for each subhead 
 of the subject. A card system is used to cross-index 
 this correspondence by names of the individuals. A 
 card is used for each individual and on this are noted 
 the dates of letters and the subject under which it is 
 filed. 
 
 One drawer of a vertical file furnishes sufficient ca- 
 pacity for the ordinary personal correspondence. It has 
 a capacity equal to from eight to ten flat sheet files. 
 The advantage is that you have all of the correspond- 
 ence for a long period in one place, instead of scat- 
 tered through numerous transfer cases. — G, B, James, 
 
BUSINESS METHODS. 155 
 
 Working by Schedule. — To direct one's business from 
 a central point is the first step to success. Many bril- 
 liant men, blessed with almost unlimited energy, fail 
 in life's battle because they know little of system, and 
 practice even less. 
 
 There are various ways in which this schedule can 
 be arranged, but a card schedule, arranged somewhat 
 like the following, will be found, perhaps, for every 
 business the most convenient and useful. 
 
 First, have a card for the morning's work, and list 
 thereon the routine common to every working morn- 
 ing of the year. In the hour column enter the time at 
 which the duty is to be performed, and in the item col- 
 umn enter the duty. The afternoon's work should be 
 listed in a similar manner on a similar card. 
 
 Then, as there are many duties to be performed but 
 once or several times a week, have a card for every 
 working day of the week and list on each the particular 
 work for that day. 
 
 A monthly set of cards, similar to the weekly set, 
 will also be found useful on which to list duties to be 
 performed but once or several times a year. The card 
 schedule ideas may be so carried out as to include all 
 the regular details of any business or branch of busi- 
 ness, whether small or large. 
 
 By beginning the day's work with schedule at hand 
 and working thereby throughout the day, a card sched- 
 ule as a central point from which to direct one's affairs 
 will prove a blessing to any business man by relieving 
 him of much needless mental strain, and by avoiding 
 many an embarrassment that often occurs simply be- 
 cause one has forgotten. 
 
 Invoice Filing. — Generally speaking, all that is sai^ 
 in favor of vertical files for letters is also true in regard* 
 to the invoices of purchases. 
 
 In the majority of cases the alphabetical systen? 
 will be found most suitable; it is simple and self-index- 
 ing. The divisions into which the alphabet should be 
 divided must be regulated by the number of invoices 
 to be handled. 
 
 The elasticity of a vertical file permits all invoices 
 
156 BUSINESS MAN'S ENCYCLOPEDIA, 
 
 from any firm to be filed in one place in chronological 
 order. This is a point that is too apparently desirable 
 to need further comment. 
 
 The numerical system possesses certain advantages 
 which should no.t be overlooked. It admits subdivisions 
 to be made to correspond to certain ledger accounts. 
 For instance, in the case of a manufacturing concern, 
 sections of the file may be allotted to invoices for such 
 items as General Expense, Manufacturing Material, Ex- 
 tensions to Plant, Repairs and Renewals. Each section 
 should have its number and set of alphabetical guides, 
 so that with the use of a suitable index for the names 
 of firms, reference can be made immediately to any 
 invoice. The Voucher Record index may be used in 
 some cases for this purpose. However, if the invoices 
 have to be frequently referred to, and this index is not 
 one which admits of names being readily found, it i)* 
 obviously advantageous to use a separate card index. 
 
 When the voucher system is used, invoices and cred- 
 its relating ot each voucher should be fastened to- 
 gether. A stapling machine is useful for this purpose. 
 In cases where invoices on a voucher relate to more 
 than one ledger account (if the plan outlined above 
 be followed), they should be separated and filed in 
 their respective divisions. This fact must, of course, 
 be noted in the index. — Wm, A. Ingram, 
 
THIS BOOK IS DUB ON THE LAST DATE 
 STAMPED BELOW 
 
 AN INITIAL FINE OF 25 CENTS 
 
 WILL BE ASSESSED FOR FAILURE TO RETURN 
 THIS BOOK ON THE DATE DUE. THE PENALTY 
 WILL INCREASE TO SO CENTS ON THE FOURTH 
 DAY AND TO $1.00 ON THE SEVENTH DAY 
 OVERDUE. 
 
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 UNIVERSITY OF CALIFORNIA LIBRARY