Knowledge that Transforms

During the past eighteen months two proposed changes in department store accounting procedure have attracted the attention of controllers and other executives in large-scale retail enterprises. Both these proposals originated with Carlos B. Clark, Controller of the J.L. Hudson Company in Detroit, Michigan. By reason of his long service and noteworthy contributions to the field of department store accounting, Clark is virtually the dean of department store controllers. His suggested innovations in the usual retail accounting procedure have therefore been widely discussed. From an economic standpoint, Clark reasons correctly about the relation of an individual selling department to the store as a whole, and he is on firm ground in suggesting a line of thought which executives should follow in deciding whether to add or discontinue departments. But it is by no means the sole purpose of departmental cost finding to furnish data for the use of executives on the occasions when such decisions are necessary.

Reviews the book "The Great Depression," by Lionel Robbins.

Survey courses are limited, apparently, to one semester or less and under such conditions it becomes educator's rather difficult and painful duty to devise teaching methods, which will, in the brief time allotted, convey a reasonably intelligent concept of basic principles and procedures. Results are unsatisfactory if the survey course is merely a duplication of the first semester of a standard one-year course. The usual and better procedure, the author believes, is to abridge the year course by a careful process of elimination and condensation. The author suggests, timidly, the elimination of any extended discussion of notes, bills of exchange, note registers, location of errors, business papers, merchandising activities, and various unusual and complex transactions. The purpose of a survey course differs entirely from that of a one-year course and it is not illogical, at least, that teaching methods in the two courses should differ. The author believes that a survey course should emphasize statements and if, by reason of a time limit, something must be slighted in the last few weeks he would prefer that material to be other than statement preparation and analysis.

Reviews the book "Federal Securities Act Procedure," by J.K. Lesser and J.A. Gerardi.

Reviews the book "Financial Organization and Administration," by W. MacKenzie Stevens.

Reviews the book "New York Laws Affecting Business Corporations," by J.B.R. Smith.

Reviews the book "Money and Banking in the United States," by Louis A. Rufener.

Reviews the book "German Monetary Theory, 1905-33," by Howard S. Ellis.

Reviews the book "Liquid Claims and National Wealth," by A.A. Berle and Victoria J. Pederson.

The new Dominion of Canada Companies Act, which came into effect in October of 1934, is a distinct advance on the law as it stood with regard to the prospectuses and the accounting of companies; but in so far as, so-called, "Distributable Surplus" is concerned, it only ameliorates a dangerous condition and does not remove it altogether. The phrase "Distributable Surplus," used as it is in Dominion of Canada Company Law, is not a good one. It's meaning is limited to the surplus contributed by shareholders, when paying for their no-par-value shares. It has been pointed out that "Distributable Surplus" is desirable, where a holding company is taking over a subsidiary, the shareholders of which have not had a dividend for the period just closed. They are to be paid their dividend out of the "Distributable-Surplus" set up. With regard to profits and losses of the company and its subsidiaries the auditor must report on their nature and source for the three preceding years, or for less, if the company has been in business for less than that period. The same must be done for a business, which it is intended to purchase out of the proceeds of the issue, directly or indirectly.