MR. HOGAN: We have had several cases where constants had been overlooked in billing and after thoroughly investigating the reasons for the mistakes, have been able to collect our accounts for back bills. I call to mind a case in New Jersey where a company had been rendering bills to a large manufacturing plant on a unit basis instead of a constant of 10. The matter was taken into the courts which ruled in favor of the electric company, because it was an innocent error and there was no misrepresentation. I do not think that any company should hesitate to collect what is due to it because of an error of this nature.

MR. FOWLER: If it is possible to improve on this routine we should do so in order to keep out of the courts and also to save us the expense of continually watching for these errors. The number, of course, is extremely small on a percentage basis, but those that happen are usually disagreeable. If the Accounting Section should present the matter to the Meter Committee, some improvement might be made in the situation.

CHAIRMAN EDWARDS: Why is it that the manufacturer puts a constant on a meter? It is a mechanical reason, of course, but what happens if he does not?

MR. FOWLER: I am not able to answer that question directly. I believe we can get around some constants by having an idle dial, a dial that is not connected with the mechanism, but set at zero. The cipher would then always be added by the meter reader. As I understand it, the meter manufacturers have cut down the number of meters with a constant other than one, so far as they felt it possible; they manufacture, I think, meters with three different constants only, one, ten and one hundred, all of them 4-dial meters, but I am not very familiar with that situation. I have looked into it a little, and I think that the adding of the extra or fifth dial would in some cases eliminate the use of a constant.

CHAIRMAN EDWARDS: I suppose the idea in using constants is to save in cost of manufacturing. Would the extra dial or dials require a more expensive train of mechanism?

MR. FOWLER: The adding of an idle extra dial, not connected and without any change in the train of mechanism, would not add materially to the cost. I think the makers have tried to confine the meters to four dials. That would mean a

very small saving. Of course, all these meters with constants are the larger capacity meters in which an error made is rather serious.

MR. HERMANN SPOEHRER, St. Louis: My understanding of the reason for using constants larger than one is that the current-carrying parts would have to be so large in the high capacity meters, as to make the meter in many cases of considerable size. In meters having constants only a portion of the current passes through the meter while the rest of it is shunted, and the shunting causes the use of the constant to bring down the total amount of registration.

In connection with the other point, that of underbilling the amount of current by failing to observe the constant, we have in my experience had to go into the courts three or four times, but in most cases we recognize the fact that by rendering lower bills we have encouraged a more extravagant use of current, and for that reason we endeavor to make allowance and compromise with the customer. We do get obstinate cases sometimes when it is plain that the customer knows he is not paying for the current consumed. If he refuses to adjust the account we are compelled to go into court, but invariably in the past the fallibility of man has been recognized and we have obtained judgment.

MR. F. L. LEITNER, Brooklyn: Answering still further the question of meter constants, I might say that the number of meter constants has been considerably reduced during the last few years. It is however still necessary to use constants for large sizes for the following reason:

Meter speeds must be kept within a given range regardless of size. A speed too high will cause brushes to spark and jewels to wear rapidly, and a speed too low will cause the meter to register low on light loads. A 10-ampere meter should therefore run at the same speed at full load as a 1000-ampere meter at its full load. The only way to do away with this is to change the gearing in the clock-work of the dial at a ratio of 100 to 1. This would require more gearing, introduce more friction on light load and increase the size of the dial, hence the most practical plan on meters other than the shunted-type is to use a constant, and by doing this, keep the speed of the meter down to about 40 revolutions on all sizes. This speed

has been found to be best suited for both commutator and jewel operations.

MR. J. R. MALONE, Long Island City, N. Y.: We have adopted the plan of a separate register for all meters with a constant, which record is checked quarterly and every meter with a constant accounted for, whether on consumer's premises or in stock. All accounts covered by meters with constants are also checked at the same time and the constant used in billing is verified. Meters with constants are also listed on colored index slips and readers are instructed to watch for and report all meters with constants not so listed. These colored slips also bring to the attention of the billing clerk the fact that the consumption as shown by the reading is not true consumption, and that a constant, as indicated, should be used.

Before adopting the system as outlined, we had a few cases where the constant was not used in billing and in each instance we asked the customer to pay the bills as corrected.

I do not think that any company should hesitate to collect where an error has been made in a constant, as it is similar to an error in multiplication or addition which, of course, should be subject to correction.

(On motion the report was received)

REPORT OF COMMITTEE ON PURCHASING AND STOREROOM ACCOUNTING

H. F. FRASSE, CHAIRMAN

DISCUSSION

(See report, page 130)

MR. F. J. FARLEY, Brooklyn: An important point in connection with storeroom accounting to which the Committee makes no reference in its report is the method of accounting for storeroom expenses.

In Brooklyn our storeroom expenses are distributed over jobs on a percentage basis and our Storerooms are under the control of three departments, each of which adds a storeroom expense percentage to the cost of all material delivered from its stock. As most of the stock material carried in the Storerooms of the other departments first passes through the Purchasing Department Storeroom, expense percentages are often added two or three times.

It has been felt that this method is rather too elaborate and that it complicates unnecessarily our ledger entries and determination of unit prices, and a procedure is now under consideration whereby an expense percentage large enough to obviate the necessity of adding any additional percentage will be added to the cost of material at the time of purchase and credited to a Storeroom Expense Credit account carried in the Material and Supplies division. Against this credit account the storeroom expenses of all departments will be periodically charged off.

Under this scheme only one summary entry is made at the end of each month charging the individual stock accounts with the expense percentage and crediting Storeroom Expense Credit account. As material deliveries are priced to include this percentage, no handling expense need be taken into consideration in entries recording the movement of stock material.

As the methods of treating this important part of storeroom accounting undoubtedly vary among the member companies, I would recommend that the Committee take the matter

under consideration. I would also like to know of the experience of other companies that are following systems similar to the one we have in use or the one under consideration.

CHAIRMAN EDWARDS: As I understand it, the point is that you have three different Storerooms not under the control of a General Storekeeper. Your overhead expenses are segregated, and the invoice price of the material is increased by adding storeroom expense percentage. Do you carry the material in stock at that increased value?

MR. FARLEY: At present we do not; we carry it on stock at 100 percent value, and add the storeroom expense percentage to the value of the material as it is delivered from stock for use on jobs.

MR. LEITNER: The appointment of a Committee on Purchasing and Stores Accounting indicates that the subject of purchasing and storing supplies is receiving more attention at present than it has during the past.

Steam railroad operators a number of years ago began to investigate the problem of storing supplies, and at present, the leading railroads have consolidated all storehouses under one general head. They have found that this is the most logical and most efficient plan. Under a system where each division or department operated its own Storeroom, considerable material was kept in duplicate quantities, and at any time when new material was to be ordered, it was necessary for the Purchasing Agent to go to each department to acertain the quantity on hand.

In most large companies the Purchasing Agent has control over all Storerooms, the storekeeper being responsible for all materials and reporting to the Purchasing Agent. This plan makes it easier for all departments because there is one place only to obtain information regarding material instead of several.

In our business considerable material becomes obsolete, due to changes in practice, and to underwriter and city regulations. Here again there is a chance for considerable loss by having Storerooms under each department for the reason that the change may affect one department and not another. In most cases when a change is made, each Storeroom has a considerable quantity of the same material on hand.

When one department has control over all Storerooms many losses may be eliminated.