The United States Securities and Exchange Commission in a recent release discusses the application of accounting principles to three issues raised by the financial statements, for 1934 to 1937 inclusive, of the Alleghany Corp. These include the handling of bond discount and expense, the treatment of gains and losses on the sale of investments, and the proper recording of a contract between the Alleghany Corp. and the Chesapeake and Ohio Railway Co. covering the sale of securities by the Alleghany Corp. The Securities and Exchange Commission points out that accounting authority sanctions the amortization of bond discount and expense as an additional element of interest cost on borrowed capital, and the setting up of the unamortized portion on the asset side as a deferred charge. However, in a footnote the Commission warns investors that such an item does not constitute a tangible or realizable value. The Commission illustrated the effect of the improper accounting principles originally used in the three instances under consideration by comparing the uncorrected surplus balances for December 31, 1934, with the amended balances.

Reviews the book "Illinois Tax Problems."

The article presents accounting case of Underwood Elliott Fisher Co. The enterprise, one of the leading manufacturers of business machines, was incorporated on March 8, 1910, in Delaware under the name of the Underwood Typewriter Co. On December 29, 1927, the name was changed to Underwood Elliott Fisher Co. The corporation manufacturers typewriters and flat-surface accounting and writing machines, including the Elliott Fisher with flat platen and the Underwood and Sundstrand with cylindrical platen. A subsidiary manufactures tally rolls, carbon paper, ribbons and other supplies for the machines of the parent company. The company's products are marketed primarily through branches in the U.S. and through dealers in foreign countries. During the past ten years the surplus accounts of the Underwood Elliott Fisher Co. has undergone two complete cycles involving transfers between earned surplus and capital surplus, arising in the first instance out of the virtual elimination of intangible assets from books of the company.

On August 27, 1919, the Phillips-Jones Corp. was incorporated in New York, succeeding Phillips-Jones Co. Inc., which had been organized in 1914. The business, dating back to 1887, consists of the manufacture and sale of fabrics, men's shirts, Van Heusen Co. collars, pajamas, and underwear. An examination of the financial statements of the corporation for the past few years reveals a striking transformation in surplus, from a substantial earned surplus and no capital surplus to an even more substantial deficit and a large capital surplus. The marked transition, which occurred in 1938, can be traced through the Statement of Profit and Loss and Deficit for the year ended December 31, 1938. The special charges and adjustments included an inventory adjustment of $326,041.17 arising from a change in the valuation of inventories whereby the basis of the lower of cost or market, was adopted. Another adjustment was necessitated by a change in policy as of December 31, 1938, whereby the outstanding stock of five subcontracting companies was transferred to the Phillips-Jones Corp., and the notes of these companies for which the stock had been held as collateral were canceled.

Reviews the book "Government and Business," by Ford P. Hall.

Reviews the book "Turning Points in Business Cycles," by Leonard P. Avres.

Reviews the book "Secretarial Accounting," by J.F. Sherwood and Clem Boling.

Reviews the book "Land Economics," by Richard T. Ely and George S. Wehrwein.

The article presents accounting case of Gimbel Brothers Inc. Recent financial statements of Gimbel Brothers Inc. disclose several features of interest, which may be discussed under the three general headings of appreciation of fixed assets, handling of earnings of subsidiaries and a group of miscellaneous items of significance, several of them characteristic of a large retail merchandising establishment. The business of Gimbel Brothers, Inc. had its inception in Vincennes, Indiana, in 1842, but the present parent company was not incorporated until August 22, 1922, in the State of New York. The business is primarily of department-store character, including selling of a complete line of wearing apparel, dry goods, and house furnishings in conjunction with the operation of a number of restaurants and other service departments. Books of the corporation reflect two appraisals, both dating back to the early twenties. Immediately after incorporation in 1922, Gimbel Brothers Inc. acquired the net assets of two predecessor corporations and two subsidiary companies.