(To the Editor of The Accountant.) SIR,-In response to the invitation contained on P. 37 of your issue of July 14th, I beg to offer a brief description of how a check-figure system is practically applied in posting account books, and I do this the more readily because I am in the interesting position of having purchased, on behalf of my company, the right to use both the methods to which you call particular attention, as well as having taken a share in a considerable amount of experimenting in the subject before purchasing either method.

There are naturally differences in the two systems, but, as one of them may not be publicly disclosed, I am not able to offer any comparisons except to say that in this matter, as is frequently the case, the first cost is by no means the only thing to be considered. The best system is, of course, that which will enable the Ledger clerk to ascertain the check quickly and with the minimum of effort, and at the same time leave the least amount of room for probable errors, but, whichever system is adopted, the method of applying the check may be described as follows:

The clerk who is posting into the Ledger ascertains the check figure (which may consist of one or two figures, but never more than two); he calls out this check to the assistant who is at the subsidiary book (i.., Day Book, Cash Book, &c.), who records it against the proper item in the book being posted from. These check figures are added up at the foot of each page of the subsidiary books, and if they do not agree with the check figure of the total of the page, the fact is revealed that an error has been made in one or more of the postings. Instead of calling over the postings with the Ledger, a very rapid comparison can be made between the amounts and the check figures in the subsidiary book, and the error located to the particular account in which it has been made. Thus the work is proved, page by page, of the original books of entry.

Whilst experimenting with check-figure systems generally, I made inquiries from several firms who have large numbers of Ledgers in use, and in each case was assured that they had not had to call over Ledger postings at any balancing period since adopting the particular check system in use.

The practical utility of such methods is, therefore, fully assured, and it is simply a question of which system to adopt to secure the undoubted benefits.

The word "it" to which you call attention as being used in an ambiguous sense, no doubt refers to the amount being posted, the check-figure of which can

certainly be ascertained mentally in no more time than it takes to write down the amount itself.

I am, dear Sir,

Yours faithfully,

W. H. STAFFORD,

Secretary Siemens Dynamo Works, Lim.

London, 17th July 1906.

Graduated Income Tax.

(To the Editor of The Accountant.)

SIR,—In answer to a recent letter signed “Fraction,” it must be remembered that my figures and law only refer to Prussia.

The following deductions are allowed :(1) The expenses incurred in making, securing, and retaining the income, including town taxes. (2) All direct State taxes on landed property, mines, and businesses, also such indirect charges which should be considered trade expenses. (3) The annual deductions for wear and tear of buildings, machinery, &c., if not already charged as trade expenses.

(4) Old age and invalid insurance premiums legally payable.

(5) Accident and life insurance premiums, if they do not exceed 600,00 marks per annum. (6) Interest on loans and mortgages. The following must not be deducted :(1) All charges incurred in improving the income, payments for increasing the business, investments or amortisation of capital.

(2) Household expenses of the taxpayer.

In assessment, the income (if over 900 marks) of members of one household is added to that of the head of the household.

If the income of the head of the household does not exceed 3000,00 marks per annum, he is allowed to deduct 50,00 marks for each child under fourteen years of age, if the child is not separately assessed. A separate assessment must be made :

(1) For wife permanently living apart from husband. (2) Children or other members of the household if they obtain an income not under the control of the head of the house, whether in his business or from other sources.

In the assessment the total income must be stated from all sources.

Fixed incomes must be stated at the exact amount; varying incomes, including taxable incomes of limited

liability companies, must be stated according to the average of the last three years.

Yours faithfully,

Berlin, 10th July 1906. ERIC. L. HEATHCOTE.

Vacant Auditorship.

(To the Editor of The Accountant.) SIR, I shall be obliged if you or any of your readers can tell me the usual practice adopted when an auditor dies, after completing an interim audit of a company's books, and another is appointed for the remainder of the year :

(1) Is it usual for the incoming auditor to re-check the books checked by the deceased auditor if the latter is a qualified man ?

(2) Have the outgoing (deceased) auditor's representatives a legal claim against the company for charges in respect of the portion of the audit completed, the auditor being appointed for the year?

(To the Editor of The Accountant.) SIR,-Referring to the letter of "Anaca," p. 12, issue of 7th July 1906, if the X. Y. Z. Co., Lim., was not incorporated until 11th February 1906 it did not exist before that date, and therefore could make no profit or loss from the 31st March 1905 to 11th February 1906. Any profit or loss made between those dates should be ascertained and be added to or deducted from goodwill.

If the vendors wish to bear the loss by surrendering shares allotted to them they should most certainly be allowed to do so, as they do not appear to have "sold the company a gold mine," but the company will probably have to obtain permission to reduce capital before they can do so.

Why do the directors' salaries and fees, &c., commence prior to the incorporation of the company ? Yours truly, H. T. L.

16th July 1906.

Some years ago I purchased shares in a water company for which I paid considerably above par. It has now been decided by a general meeting of shareholders that the directors of the company be empowered to transfer the concern to the town corporation, who purpose issuing share capital to the present shareholders, which although in value will exceed the par of original shares, and will yield dividend equal to that which I have been receiving, yet will be considerably less in value than what I originally paid, and unless the shares advance after the transfer I stand to lose heavily. Can I compel the company to pay me the full amount which I gave for my shares before the transfer takes place, or have I no redress and must accept what is offered me in exchange with a good grace? Yours truly,

Monday INSTITUTE OF CHARTERED

The Council has now to submit to the members its Report for the year ended 30th April 1906, together with the Balance Sheet and Revenue Account, duly audited, and in doing so would point out that the Institute has now completed its twentieth year.

The Council has held 11 meetings during the year, and members of Council have been called to the number of Committee meetings shown opposite their names. The attendances at both Council and Committee meetings are shown in the following table :

Leave of absence was granted to Messrs. Balfour Melville, Holmes, Morley, Smith, Strangward, and Warnock from one meeting each; to Messrs. Howden, Meudell, Wilson, and Woodward from two meetings each; and to Messrs. Cleveland and Higgins from four meetings each. Register of Members.

The names of the following deceased members have been removed from the Register, viz. :-Mr. E. P. Hastings and the Hon. Edward Langton, both founders of the Institute and ex-members of Council, Mr. Langton having held the office of President, and Mr. Hastings that of VicePresident; Mr. D. Herald and Mr. M. A. Ridge, both Fellows of the Institute; and Mr. N. R. Wright, an Associate of only a few months' standing. The names of two Fellows have been struck off for non-payment of their subscriptions.

One Fellow has been admitted ad eundem statum, and 42 Associates and 13 Licentiates have been admitted by examination.

At the close of the year the Register contained the names of 330 members, of whom 105 were Fellows, 200 Associates, 13 Licentiates, five Corresponding and seven Honorary Members, an increase of 49 being shown for the year. Examinations.

At the Final Examination held in November last 43 candidates presented themselves for all the subjects, whilst seven came up for bookkeeping and auditing only and 17 for bookkeeping only, these having previously passed in the other prescribed subjects. Of the total of 67 candidates, 37 succeeded in passing, and 15 of those who failed were, on the recommendation of the Examining Committee, granted permission to come up at a subsequent examination in the subject of auditing only.

For the Intermediate Examination in November 67 candidates presented themselves, of whom 36 were successful in passing; one candidate came up for the Preliminary Examination, and succeeded in all his subjects.

At the request of the Incorporated Institute of Accountants of New Zealand, the Council agreed to make the examination papers set for the usual April examination available for candidates for admission into the New Zealand Institute, except those on subjects governed by local legislation. The examination was held, practically simultaneously, in Melbourne and at the various centres in New Zealand, the answers to the papers set in Melbourne being forwarded here to be dealt with and assessed. Owing to the short notice that could be given, only 29 candidates for the Final and 15 for the Intermediate submitted themselves in Melbourne, and out of the 29 Final candidates only seven took the full number of subjects, the remainder coming up in single subjects to complete their examination.

The Examining Committee is now fully engaged in the task of dealing with all these papers, and hopes at an early date to be in a position to make its report.

Parliamentary and Law Committee. Early in the year a copy of a Bill introduced into Parliament by the Tasmanian Government, to provide for the registration of persons practising as accountants in Tasmania, was received. The Council thoroughly approved of the general principles of the Bill and had some opportunities of expressing its approval, but as some of the Bill's provisions appeared likely to hinder a Victorian accountant from undertaking any accountancy or auditing work in Tasmania, the Council made representations on the point, and received satisfactory assurances that if the Bill were proceeded with it would be amended to meet the objections taken. The Bill did not make any progress in the 1905 session of Parliament, but it was stated that it would be brought forward on another occasion.

The Council learned from correspondence received from South Africa that the Transvaal Society of Accountants had declined to admit members of this Institute who were resident in the Transvaal and had applied for admission; and from a perusal of a copy of the Society's bye-laws it appeared that its Council had no option but to refuse our members' applications. The Council at once took steps

to effectively represent to the Council of the Transvaal Society the facts in connection with the history and standing of the Institute, and requested the Council to endeavour to have the Society's bye-laws amended so as to enable the Society to grant reciprocity of admission to our members. The Council of the Society promised to seek power to admit the members of our Institute, being residents of the Transvaal Colony, without further examina. tion. Advice has not yet been received that this promisc has been redeemed, but the Council is aware that the Transvaal Council has had its hands very full during the past year.

There is a prospect that the Commonwealth Government may, at the request of the States Governments, take up the subject of company and insolvency legislation with a view to passing Federal Acts to supersede the State Acts and make the law on these subjects uniform throughout the Commonwealth.

Under the circumstances the Council is taking steps to have some preliminary consideration given to the subject. Proposed Charter.

At the date of the last report it was thought that the most serious obstacles in the path of the petition for a Charter had been surmounted, although the possibility of opposition from some of the other States was never lost sight of; and it was ascertained later that the New South Wales Committee of the Society of Accountants and Auditors, the Corporation of Accountants of Australia (of Sydney), the Institute of Accountants in South Australia. and the Tasmanian Institute of Accountants were all opposing it. Such opposing petitions as were lodged were answered, but by this time the petition had reached such a stage that the agents who had the matter in hand in London were able to advise that, apart from the opposi tion, there was little hope of success. Members generally will be aware that the fact that the Charter had been refused was published in the cabled news in the daily papers early in March, and this was duly confirmed.

From copies of official correspondence since received it has been learned that the merits of the case made out by the opposing petitions were not considered, and that even if the petition for a Charter had been unopposed His Majesty would not have been advised to grant it, on the grounds (1) That the object desired could be accomplished by Act of Parliament of the Commonwealth or the State; and (2) That there is no recent precedent for the grant of a Charter to a corporation such as that which was proposed, operating in the Colonies.

Library.

Thirty-three volumes have been added to the Library during the year, including new editions of Williams' Law of Executors and Administrators (the 10th), of Lindley's Law of Partnership (the 7th), and of Smith's Mercantile

Law (the 11th), and including also Local Government Law and Practice, by Collins and Meaden; A Manual of Local Government Law and Municipal Guide (Vol. I.), by Morley and Holmes; and A History of Accounting and Accountants, by Richard Brown, C.A.

Mr. James Martin, corresponding member, has continued to present to the Library the current volumes of the "Transactions" of the London Incorporated Accountants Students' Society and of "The Incorporated Accountants' Journal," whilst the Registrar has presented the bound volume of "The Secretary." The usual series of annual publications has been received from various sources, and placed in the Library without being entered in the catalogue.

Students' Society.

The eighth year of the Students' Society has just closed, and has proved one of the most successful in its history. Nine meetings were held during the year, four of which were devoted to the following lectures :

"Fraudulent Conveyances and Assignments. By Mr. J. G. Latham, M.A., LL.B.

"Principal and Agent." By Mr. A. C. Morley, F.I.A.V., B.A., LL.B.

"Capital v. Revenue." By Mr. G. A. Hornemann,

A.I.A.V.

"Duties and Liabilities of Trustees." By Mr. C. J. Lowe, M.A., LL.B.

The last meeting of the year took the form of a mock meeting of shareholders, and proved very successful, the members being ably assisted by Mr. T. Brentnall, the Society's President, and Mr. J. McA. Howden, who took the position of chairman of directors.

Western Australian Branch.

The branch in Western Australia has now been fully constituted with a local Council of five members, with power to set the company and insolvency papers for local candidates and to assess their answers, and authority to receive all revenue derivable from Western Australia. Mr. S. J. McGibbon occupies the dual position of Chairman and Secretary, and has generously donated his first year's allowance to the funds of the branch.

General.

Mr. Robertson Lawson, C.A., of London, has continued to keep the Council informed on matters of interest arising in Great Britain, and in the year just closed has rendered considerable assistance to the solicitors who had charge of the petition for a Charter.

The Revenue Account discloses a very satisfactory increase in the funds for the year, the sum of £213 5s. 5d. being added to the Accumulated Fund. The amount paid during the year in connection with the petition for a Charter was £13 os. 10d., and this has been charged to Revenue. Since the year closed the solicitors' bill of costs

in this matter has been received, and amounts to about £240. A considerable proportion of this sum will be borne by the other parties to the application, and steps are now being taken to have the several shares agreed upon. The following members of the Council retire at this meeting :-Messrs. T. Brentnall, J. Higgins, C. M. Holmes, H. W. C. Smith, and S. J. Warnock; and the following members have been duly nominated for election to the vacancies thus caused, together with that caused by the resignation of Mr. W. Densham: -Messrs. Brentnall, J. Higgins, C. M. Holmes, A. R. Kelsey, H. W. C. Smith, and S. J. Warnock.

T.

The Hon. Auditors, Messrs. T. McDonell and E. G. C.

Teele also retire, and Mr. W. J. Blyth has been nominated for election to the office.

The Council recommends to the members that one Auditor only, who shall not be eligible for re-election, be appointed for the future, and that a fee of £5 5s. be voted

as his remuneration.

As the nominations do not exceed the vacancies no ballot is necessary in connection with the election. C. B. NORTON,

President.