I. Introduction: Position of the British coal industry in 1929, 419; Provisions of the Act of 1930, 420; Nature of the machinery established, 421. — II. Regulation of Output: Procedure, 422; Adjustment of output to market conditions, 424; District allotments, 425; Individual quotas, 425; Compliance, 428. — III. Control of Prices: Procedure, 428; Difficulties encountered, 429; Results, 432; Lack of compliance, 433. — IV. Reorganization of the Industry: The Coal Mines Reorganization Commission, 434; Failure of compulsory combination, 437. — V. Summary and Conclusion: Results of the Act, 438; Obstacles, 438; Attitude toward the Act, 439; the social interest, 440; the Act as a permanent policy, 440

Failure to set standards may succeed in postponing the day of reckoning, but not for long. Regulation of the U.S. Securities and Exchange Commission affecting corporate reports, no matter how wise may be the language in which they are couched, will cause the accountant many perturbations. The accountant will not be ready for them. The accountant will again consult his attorney. A committee of the American Institute of Accountants will protest mildly the Commission's unnecessarily harsh and untrustful attitude toward the profession. There will be a revival of talk to the effect that after all the old order was best, the securities act and the securities exchange act need drastic modification. But nobody will come forward with concrete suggestions as to the precise nature of the modification needed. And the failure to accept the public generally as a third party to every accounting engagement will continue for as long a time as possible. Lawyers and accountants will cry unrestrainedly on each other's shoulders. But regulations will be followed and thus a new era will dawn for the accountant, however weakly and fatuously he may resist its coming

Under the spell of rumored drastic regulations of the federal Securities and Exchange Commission, professional accountants are exhibiting a bad case of nerves. Many damage suits against leading firms of practitioners are already in courts and reports of more and larger suits are rife. Attorneys, preparing hastily conceived opinions and having insufficient knowledge of traditions and conventions of the profession, are emphasizing to its members terrors of the strike-suit racket. And, what is worse still in an emergency like the present, the almost universal dependence of accountants on the views of others offers convincing evidence that the profession is either unwilling or incapable of doing any straightforward thinking on its own behalf. To instructors in accounting, this condition of affairs should offer a challenge. Now, more than ever, the voice of enlightened opinion within the profession is needed. For years it has failed to see problems before it, problems for the complexity of which it alone has been responsible. Years of uninterrupted prosperity for large national firms, with the control of the profession as a natural by-product of their growth, have built up a complacency and sense of security which are now being rudely shaken

The article presents views of the author on novel business and accounting practices in Mexico. These novelties were very amusing and interesting to us and compared strangely with the way of doing things in the U.S. We in the U.S., are complaining about the various records, forms, which have to be kept for purposes of the Revenue, Securities and Securities and Exchange Acts. This complaint would become a mild one, indeed, if our corporations should be compelled to conform to the regulations now existing in Mexico. In the auditing of the cash account we encountered a strange procedure that is followed by the banks in that country. The banks do not return the canceled checks with the bank statement. The reason behind such practice is that the canceled check is the only evidence the bank has for the charge it has made to the company's account and therefore it keeps the check for its own protection. At first such a practice appeared amusing, but on second thought one can not deny that banks were following a safer policy in this respect than our own do. In the U.S. it would be an easy matter for a customer on receiving his canceled checks from the bank to abstract one and then claim that the bank had erred in charging his account for the amount of the check he had abstracted

IN addition to their customary significance for the interpretation of economic conditions, commodity prices have at present a peculiar importance because of the emphasis placed upon them in the discussion of official attempts to stimulate recovery. During the formulation and operation of the recovery program, great emphasis has been laid upon the supposed necessity of inducing an advance in prices. Destructive price cutting was listed as a chief form of excessive competition, and stable or advancing prices were regarded as necessary in order to bring to an end the wave of liquidation. The advance of particular types of wholesale prices, especially those of agricultural and some other basic commodities, was accepted as a means of achieving at least in part that redistribution of wealth (income) which was one of the announced objectives of official policy. Officialdom did not overlook, moreover, that advancing prices are generally considered a symbol of improving business, and would therefore have a favorable psychological effect. Various items of official policy accordingly had the elevation of prices as an important, if not their main, objective. These policies appeared not merely in'the handling of the money problem, with the actual devaluation of the dollar and the continuing threat of inflation, but also in numerous phases of the attempted control of agriculture and other industries. The systematic purpose to raise prices was so frankly and clearly indicated in the so-called recovery legislation, in the related administrative regulations, and in the frequent and emphatic official pronouncements, that it seems almost unnecessary to recall the facts. Through it all the official mind 'clearly supposed -or wished to be thought to suppose that there existed somewhere between producer and consumer a great slack which could be taken up, so that the advance of prices received by producers need not be transmitted in full and in all cases into an equivalent advance of prices paid by consumers. Allegedly excessive increases in prices to consumers were frowned upon, and somewhat energetic measures were taken to prevent or discourage such increases. It was a no time officially' promised, however, that consumers would not be called upon to foot a large portion of the bill for recovery ultimately, if not immediately

SOME months ago it became apparent that important basic industries were lagging behind in the process of economic recovery which seemed to be under way in the United States. Throughout the entire depression trade has been slackest and unemployment greatest in industries producing durable goods. This has occurred in spite of the efforts of our governments, federal and local, to carry through ambitious programs of public works; and it becomes very striking when the low level of production in these industries and others largely dependent upon them is compared with the levels recently obtaining in industries that produce goods of a relatively perishable character. The employment indexes of the Bureau of Labor Statistics show that a group of large industries producing such commodities as beverages, butter, meat and meat products, wirework, explosives, chemicals, soap, and rubber goods (other than tires and shoes) were in November employing numbers of laborers that ranged from 2.7 to 36.6 per cent in excess of the number employed in the basic year (I926) used in constructing the index. In exceptional cases, where for special reasons there exists a very strong upward trend, much higher increases are recorded, ranging from 69.3 to I89.I per cent. But, when one turns to industries producing durable goods such ,as cast-iron pipe, steam fittings and heating apparatus, structural metal, agricultural implements, railroad cars, locomotives, lumber, brick, tile, cement, and stone, the number of people employed last November ranged from 20.2 to 50.0 per cent of the number employed in the base year I926. Equally startling is the record of industrial production shown by the Federal Reserve Board's index which, unlike the employment data just used, is adjusted for seasonal variation. Production of consumption goods such as textiles, shoes and leather, rubber tires, food products, paper and printing, tobacco, and petroleum products ranged last October or November1 from 89 to I52 per cent of the production in the base years (I923-25). At the same time production of iron ore, lumber, automobiles, cement, iron and steel, lead, and zinc, ranged from 23 to 72 per cent of average production in the years chosen as a base. It is too clear for all doubt or cavil that, in considering what should be done with the Securities Act, we must take into account the fact that industries producing either durable consumers' goods the marketing of which requires the use of consumers' credit, or capital goods the sale of which depends upon the ability of industries to finance their capital requirements, will be seriously affected by any measure that restricts the flow of capital into industrial enterprise. The unfavorable showing of this important group of industries is one of the discouraging factors in an economic situation which upon the whole shows decided improvement. No single cause accounts for it. Provisions in some of the codes, by which restrictions are placed upon the introduction of new machinery or effort is made to restrict excessive production, cannot but react unfavorably upon certain basic industries. Debasement of our currency, beside impairing general confidence, makes it difficult to look very far ahead, and so injures the construction industry and others dependent upon it. Finally the Securities Act of I933 interferes seriously with the flow of capital into industries that require financing upon any substantial scale. The Act is not the only reason for the extremely small volume of financing in I933, but it reacts unfavorably upon the very industries that now lag behind the general economic recovery. The need of federal regulation of security issues is patent, and the general procedure prescribed by the Act seems appropriate and effective. The difficulty is that some of its provisions impose liabilities that issuing houses and security dealers would be foolish to assume. In investing one's own funds it is impossible to avoid mistakes, and the same is true with the business of buying securities for sale to others. The facts presented in any prospectus or oral communication are frequently of a sort that does not admit of exact determination but must depend upon someone's judgment which, with the best of intentions, may turn out to be bad. To sustain the burden of proof that he did not know, and in the exercise of reasonable care could 1 In some cases November figures are not yet available