Knowledge that Transforms

Abstract The recent creation of a new form of business incorporation in France, same as the corresponding differentiation of forms in Germany and Great Britain, has followed the development of protective devices set up in the interest of the general public. First, in the historical view, one can witness the development of easy incorporation by mere procedure. Second, safeguards have been developed, applicable to all corporations, but safeguards which were particularly directed toward those problems which arise when there is an appeal to the general public for investment funds, safeguards for bond holders and other creditors against the whole proprietary group, and for shareholders against promoters and managers. Third, there has occurred a relaxation of control devices of the second class, a relaxation based on the idea that fewer safeguards are needed when the intra-corporate relations of the members are intimate and private. It is not the function of this paper to trace in detail the steps in this process of competition. Suffice it to say that two important processes took place, the one with respect to the utilization of the limited partnership, the other with respect to that of the corporation.

Abstract Two opposing hypotheses attempt to explain the effects of inflation upon business enterprise. The first maintains that business profits by inflation due to the rise in prices which it engenders. The second affirms that inflation is a grave danger to business, gutting enterprises of their working capital. The first of these two hypotheses has recently been attacked by a number of German and French accounting theorists who have attempted to demonstrate that the standard accounting calculation of profits does not give accurate results during periods of rapidly changing prices. The second hypothesis is indeed most seductive, but, unfortunately, it has never been verified by a positive study of the facts. The object of this study is to investigate quantitatively the extent to which the one or the other of these theories found application in the French inflation of 1919-1926 and to discover the net effects of inflation upon the financial position of French enterprises. Several factors such as reconstruction, tariffs, improved industrial techniques, have all played an important part in these changes.

Reviews the book "Economic Cycles and Crises, an American Plan of Control," by William C. Schluter.

Reviews the book "Corporation Finance," 7th ed., by Edward Sherwood Mead.

Reviews the book "Neue Deutsche Wirtschaftsführung," by H. Nicklisch.

Reviews the books "The Rationalization of Movement in German Industry," by Robert A. Brady and "Trade Associations and Industrial Control," by Simon N. Whitney.

Reviews the book "Chain Store Expenses and Profits, an Interim Report for 1932," by Malcolm P. McNair.

Abstract Accounting is usually regarded as an adjunct of commerce or industry which has at the most a tenuous relationship to the structure and theory of science and slight discernible similarity to of political organization. It was no accident that the double entry system of accounts was introduced in Italy. Accounting centers around two classes of records, the balance sheet and the profit-and-loss statement. Taken together they exemplify the mechanical theory of physics as well as the physiological or organic theory which is associated with evolutionary processes in which time is cardinal. An initial and fundamental point of contact and the basis for both the physical sciences and accounting is present, to begin with, in the number system which is common to both. The number one is primary in that every other number is divisible by it, thus presuming the homogeneity and divisibility of those things to which the numbers are assigned. Their homogeneous and divisible character is further amplified by the operations of addition and subtraction.

Abstract The National Committee on Municipal Accounting is a joint committee of representatives of the leading national associations of professional accountants, public officials and citizens groups. The representative of each association in the joint committee is the chairman of an advisory committee set up in each association. The general purpose of the committee is to formulate principles of municipal accounting, to develop standard classifications and terminology for municipal reports, to outline the principles and procedure relating to municipal audits and to promote the recognition and use of these standards. A preliminary outline of the general principles of municipal accounting has been prepared by the committee as a tentative basis for the development of classifications and procedure. According to accounts should be centralized under the direction of one officer, who should be made responsible for keeping or supervising the keeping of all financial records and preparing all financial reports. Although this is not strictly an accounting principle, it is nevertheless an essential feature of organization necessary to secure good accounting. At present many officers and departments in a municipality keep accounts and issue reports.

Reviews the book "Recovery and Common Sense," by O.M.W. Sprague.