Provisions of the agreements of 1883, 309. — Distinction between statutory interest and dividends, 311. — Terms of state's guaranty of earnings, 312. — Results for the Eastern, P. & 0., and Southern companies up to 1914, 316. — Results since 1914, 319. — Results for the Northern and P. L. M. companies up to 1914, 321. — Results for the same companies since 1914, 321. — Measures of relief suggested for the Eastern and Northern lines, 324. — Proposal for advance of rates on all roads, 327.
This article discusses concepts of capital and income. In December 1936, a joint session of economists and the accountants was held in which they discussed fundamental concepts and theories of capital and income. Since both the economists and the accountants deal in large part of common group of phenomena, it is important that any gaps, which may exist between economic theory and accounting theory, should be unbridged. The concepts of capital and income lie at the very heart of many economic and accounting problems that are of great concern from the standpoint of formulation and administration of public policies. In the session, economist Frank Albert Fetter discussed his major's interest of career and he elaborated the introductory marks on the study of economic theory, terminology and their history. Accountants can most effectively genre both their private clients and the public interest; they can develop accounting principles that have a secure foundation in sound economic theory. Economists can better explain a profit-seeking economy.
The article presents the author's comments on studying accounting in a liberal arts college. He speaks in the defense of the subject. The author asserts that accounting in the liberal arts college has struck deep root and is there to stay. It has inherent qualities that justify the position it now holds in the liberal arts curriculum, and it may be a factor in inducing changes within the college in the direction of a more frank facing of the situation regarding the problem of professional education. The author also finds himself somewhat unprepared to accept the implications of the reference to professional education. He do not think that the case for accounting as a subject making a contribution to a liberal arts curriculum is strongest when put in terms of professional education or of a possible revision of liberal arts curricula looking toward more professional training, as this expression is commonly accepted. According to the author the most valuable contributions which accounting can make toward the enrichment of a liberal arts curriculum are those which can be made within the framework of a conception of this curriculum which has little, if anything, to do with professional or vocational education.
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.
Reviews the book "Quelques documents et quelques ouvrages français antérieurs au règne de Louis XIII, ayant trait à la morale, à la doctrine et à la comptabilité commerciales," by Albert Dupont.
The French Code de Commerce, a law promulgated in 1807, contains a striking instance of an official changing of usage in a matter of business terminology. In making legislative recognition of the business corporation, the framers of the code applied to the corporation, as its official designation, the term "société anonyme," which means anonymous society. In so doing they appropriated a term which hitherto had been employed both by laymen and by members of the legal profession to designate various types of informal associations of business men, not one of which at all resembled a corporation. These forms of association were, in fact, characterized by features which are diametrically the opposite of those which characterize the business corporation. Yet the change in the official meaning of the term, société anonyme was effected, and the new meaning has apparently entered into common usage on a permanent basis. One of the earliest forms of the société anonyme appeared as the association of persons who participated secretly in the farming of taxes. The tax farmer for a town, city or other district associated with himself several capitalists to participate in the profits or losses of the undertaking.
In 1669 the merchants of Paris, feeling the need of an improved body of commercial law, applied to the king, Louis XIV, for constructive action. The commercial law which the Ordinance of 1673 established in France was from this time on founded on bases so solid and usages so broad and so rational that not only did the Ordinance suffice up to the end of the old regime for the affairs which it controlled, but also the "Code de Commerce," which was promulgated in 1807 and which, with the exceptions of certain parts such as the chapter on failures and bankruptcies, is still in force, made very numerous borrowings from it and even often textually reproduced its articles. The Ordinance of 1673 dealt with the topic "Des Sociétez" in Title IV, which contained fourteen articles. Individuals at an early period in European business history grouped themselves together for collective trading in the fields of banking, tax farming, ordinary trade or trade overseas. The Roman law had established the principle that any partner acting as such within the limits of the legitimate objectives of the enterprise might bind the society.
The publication "An Epitome of Bookkeeping by Double Entry," by Thomas Turner, Professor and Teacher of Bookkeeping, at Portland, delineated on a scale suited to the faculties and comprehension for Senior School Boys and Youth designed for the Mercantile line. It is one of the earliest American specimens of textbook production in the field of commercial subjects. It has its place in the literature of education. Book-keeping by Double Entry is a system of charge and discharge. A Charge is a single entry, exhibiting the debtor side only, and does not form a complete account without the discharge amount of charge. The discharge, must be always equal to the amount of charge, consequently the total amount of the additions on the debtor side of all the accounts open in the ledger when posted up, must be equal to the total amount of the additions on the credit side, or otherwise there must exist an error either in the wrong addition of the sundries in the journal, or a wrong posting there from in the ledger.
The separation of liberal from non-liberal studies may be attempted on the basis of the content of the several subjects offered. In most conservative quarters "liberal arts curriculum" means a course of study in which emphasis is laid upon linguistics and literature, especially upon the classics of Greece and Rome. Mathematics is by tradition admitted to the liberal arts fold, perhaps because of its disciplinary value, perhaps because by the mastery of its principles one acquires a tool for use in the pursuit of the natural sciences. There appear to be at least three specific objectives of accounting instructions as offered by a liberal arts department of economics. First, it provides students the mastery of a tool which is most useful in the pursuit of other economic studies. In this respect accounting is not unlike a course or courses in statistical method. Secondly problems of taxation, public regulation, and public administration, for example, require for their solution informed intelligence of accounting as well good intentions. Third, accounting study and instruction is not without its disciplinary phases. Many of the most fundamental concepts of accounting are abstractions, as for example, proprietorship, net worth, equities, revenue, expense, profit, loss, gain, income, surplus and reserves.