per share ($100 shares). It is also 7.94 per cent on the total receipts of the year.

All expenses as above reported by the Coöperative Banks, $51,609 08, which is an average to each association of $25,804 54, and to each share (of $100) of $1 06. It is also 1.96 per cent of the total receipts of the year. This low percentage is due to the large volume of business in deposits added to the current Building and Loan Association receipts.

COMPARISON OF EXPENSES.

On the basis of stock we have the following comparison, the figures showing the average expense per share:

On the basis of total receipts we have the following comparisons, the figures showing the percentage of expense to total receipts, except in the case of taxes, when the percentage is shown on the present worth of mortgages (taxable value):

While the Local Building and Loan Associations are quite similar in their general outlines, there still exists a wide divergence between them in their methods of transacting business and their systems of bookkeeping, and in their plans of apportioning profits. In fact, it would be difficult to find any two that are alike in all of these respects.

This dissimilarity is due to the fact that there has been no generally accepted model for the formation of these organizations. The organizers of each have pursued such plan as they had in mind, often following the lines of some Eastern association with which one or more of them may have been connected at a previous time. In some instances an expert has been called in, who has formulated a system of his own. Or, several features of different neighborhood organizations have been borrowed and incorporated in the plan. Thus has grown up this great variety of methods in transacting the business of Building and Loan Associations, while all are striving for practically the same ends.

The most thoughtful and most experienced of the Secretaries have deprecated this lack of uniformity, and have expressed the hope that this Commission might be able to bring about something like a general concurrence in the systems. This desirable end we are willing to promote by any means in our power; but it should be borne in mind that we

have no arbitrary authority in the premises. We cannot prescribe any particular system of bookkeeping and say that all Secretaries must conform to it. Our powers of interference are limited to cases where we find errors in accounts, or the pursuance of methods which will result in injustice to stockholders. Nevertheless we have exerted our influence in a purely advisory way for the adoption of what we deem the best system, and in time, no doubt, this influence, if consistently maintained by subsequent Boards, will result in greater uniformity of methods.

There can be no better way of furthering this reform than for the Secretaries and other officers of the Building and Loan Associations to meet at stated intervals and discuss these matters. They are thus enabled to compare different systems, and draw conclusions as to which is best. To this end we indorse the plan of the State League of Building and Loan Associations, and urge the Presidents and Secretaries of associations to affiliate with it. Boards of Directors can well afford to grant their Secretaries the requisite leave of absence, and defray all necessary expenses while they are attending the annual meeting of this League.

In order to place in the hands of Secretaries and those who are forming new associations an outline of a safe and desirable system, we discuss the principal books which should be kept for a Building and Loan Association, and enter somewhat into details concerning methods of distribution, etc.

THE STOCK BOOKS.

These constitute a separate and distinct system, which should be devoted to the transactions of the corporation, and the stock accounts should never be confounded or intermingled with the commercial accounts of the association.

The Record Book is that in which the Secretary records the proceedings of the annual and special meetings of stockholders, and the meetings of the Directors.

The Certificate Book contains the certificates of stock. Each certificate should have its stub, showing the number of certificate, the date of issuance, the party to whom issued, and such memoranda as may be desirable to trace the stock back to a former certificate, in place of which this one may have been issued.

In every instance the Secretary should require the signature of the party to whom stock is issued, or his authorized attorney, attesting the receipt of same. This receipt is the Secretary's protection against a possible charge of false or irregular issue of stock, and he should never allow a certificate to be taken from the book without the proper signature on the stub.

The certificates and stubs should be numbered consecutively from the beginning to the end of the book, each stub bearing the same number as its accompanying certificate. It is best to have this numbering done by the binder's machine when the book is made. Some associations have a way of beginning each series with No. 1, and thus they have a different set of numbers for each series. This is wrong, and it leads to great confusion when several series are out. An association should never issue two or more certificates of stock bearing the same number; let the numbers run from unity up to as high a figure as may be required, the progression being continuous through the life of the association. When a certificate is transferred from one holder to another, it should be

surrendered to the Secretary, properly indorsed with the name of the original holder. It should be canceled by the Secretary, and a new certificate, bearing a new number, should be issued to the party purchasing the same. It is a great mistake to issue the new certificate under the number of the old one; it is also a mistake to recognize any transfer of stock unless it had been made on the books of the association, as above outlined. When certificates are surrendered and canceled by proper indorsement across the face, each should be pasted back upon its proper stub in the certificate book. When a certificate is lost, and cannot be returned for cancellation, the owner should file an indemnity bond with the Secretary guaranteeing the association against loss in the event that the certificate should ever appear in the hands of a third party. This indemnity bond should be filed, and the Board of Directors should declare such certificate void. The Secretary should make a proper indorsement of these proceedings on the stub of the lost certificate; the stock may then be redeemed or reissued under a new number, as the owner desires. Some Secretaries paste the indemnity bond to the stub of the lost certificate, just as they would paste in the stock, if returned and canceled. This is a very good plan. If a certificate should be spoiled in filling it out, or not taken by the intending purchaser, let it be canceled, both on the face and by proper entry on the stub, and let it remain in the book; or, if it should have been torn out, paste it back; never attempt to make erasures and issue such certificates. Never allow a certificate to be removed from the book without an entry on the stub accounting for it in a legitimate way.

We urge upon Secretaries the importance of keeping the Certificate Book with scrupulous care, as it is the book of original entry in all stock transactions, and may be introduced in Court as evidence. It is the book by which this Commission checks up all statements of outstanding stock.

The Stock Journal is a book in which the Secretary first enters all stock issued and all the stock withdrawn, with the name of purchaser or holder, number of certificate, number of shares, the series, etc.

properly ruled and printed for this purpose may be purchased from any stationer, and an accountant will readily understand the form in which entries should be made.

The Stock Ledger is the book into which the entries in the Journal are to be posted. Stock Ledgers of accepted form may also be purchased from a stationer. In this book there is an account with each stockholder, showing on one side all stock issued to him, and on the other side all stock surrendered by him. This book may, with advantage, be kept in double entry form, with a Capital Stock Account, in which all transactions are entered as an offset to the individual debits and credits, thus balancing the Ledger at all times when correctly posted.

Stock Index.-Some Secretaries of large associations keep a Stock Index Book, in which the names of all stockholders are alphabetically arranged and accompanied with references to their places in other books. But if the Journal and Ledger are properly kept, and the Ledger carefully indexed, we see no necessity of keeping this last named book. Secretaries should study to simplify the system as much as possible, keeping the least number of books consistent with a correct and easily accessible record of their business.

A Transfer Book is required by law; but with proper handling, the Stock Journal or Stock Index may be made to serve all the purposes of a Transfer Book.

THE COMMERCIAL BOOKS.

These are the books in which all the monetary transactions of the association are to be recorded, classified, and arranged in such a manner as to facilitate business, and show the true state of every account. It is in the keeping of these books that the widest divergence between methods is to be found, and it is not so easy to prescribe a system which will suit all associations, as in the case of the stock books outlined above. Varying regulations and restrictions as to transacting business seem to impose various systems of account-keeping, each adapted to the peculiar conditions involved. One Secretary keeps no Cash Book, carrying a Treasurer's Account in lieu thereof, and posting all of his transactions from the Journal or auxiliary books. Another Secretary keeps no Journal, but carries nearly all of his transactions through the Cash Book. Still another may dispense with both Cash Book and Journal, and post from what are ordinarily considered auxiliary books. As yet we have not found any one who has been able to dispense with a Ledger; but every other book in the category is adopted or ignored as suits the fancy and supposed requirements of the Secretary.

It should be borne in mind that the transactions of a Building and Loan Association constitute a plain, straightforward commercial business, and it would be quite feasible to keep account of them in ordinary commercial books, such as a Day Book, Journal, and Ledger. If the business were considerably expanded, the work of the bookkeeper might be facilitated by dispensing with the Day Book, and making the set up as follows: Journal-Day Book, Cash Book, General Ledger, and Petty Ledger; and we might have as auxiliaries a Register of Stockholders, a Bill Book, and an Insurance Tickler. This, in effect, is what the expert bookkeeper in Building and Loan work does, though he gives to some of his books quite different names and quite different forms from those usually in vogue. For example, his Petty Ledger and his Register of Stockholders are combined in one book, which he calls a Dues Register or Installment Register. His Bill Book and Insurance Tickler may also be combined in one book, called a Loan Register. But it would be well for the beginner in this special line to bear in mind that the basic principles of double entry account-keeping are not changed by this more elaborate and intricate system, and that the purposes in view are simply those which might be accomplished through the old-fashioned and easily understood Day Book, Journal, and Ledger.

It would be well for the experienced Secretary to bear in mind, as well, that he should not depart from the original forms of account-keeping, unless he has a good reason therefor, and that reason should be the saving of time and a greater ease and accuracy in arriving at results. There is such a thing as multiplying special books, and involving them in labyrinthine details until the work of carrying them on is greater, and the chances of error increased over the simple though cumbersome Day Book, Journal, and Ledger plan.

All things considered, the simpler and more straightforward a set of books is made the easier they are to keep, and the more accurate they become. With these views in mind, we will canvass briefly the books

which we think are adapted to the requirements of every Building and Loan Association, and none of which should be dispensed with unless something simpler and less laborious can be made to take its place.

The Cash Book.-This should be ruled in special form, with separate columns on the debit side for the entrance of Dues, Interest, Premiums, Fines, Fees, and Sundry Items. This allows the classification and assembling of various items of receipts, so that at the end of every month the aggregate receipts for dues may be posted to the Ledger as one item, and the same with interest, premiums, fines, and fees. This shortens labor and furnishes a justification for keeping the Cash Book in such an intricate form. Some Secretaries dispense entirely with the credit side of the Cash Book, for the reason that all receipts are turned over to the Treasurer, and no money is paid out except through warrant on the Treasurer. But we would not advise so radical a departure from original lines. There should be a credit side to the Cash Book, if for no other purpose than to show that the money has been turned over to the Treasurer. Then a strict balance of the Cash Book is rendered a necessity, and money held over in the Secretary's hands, pending delivery to the Treasurer, will be accounted for at all times.

In cases where the regulations of an association allow the disbursement of cash directly from the office of the Secretary, the credit side of the Cash Book may have several columns to accommodate the principal items of outgo, such as Loans, Withdrawals of Dues, Withdrawals of Profits, Expenses, and Sundry Items.

The Journal. As the Cash Book is the book of original entry for all cash passing through the hands of the Secretary, so the Journal, or the Journal-Day Book, is the book of original entry for all transactions that do not involve the actual transference of cash. For example, if the association accepts a piece of real estate in settlement of a loan, the transaction properly involves a Journal entry, and this cannot be carried through the Cash Book without a violation of the proprieties.

If the rules of the association require that all disbursements shall be by warrants drawn on the Treasurer, then every time the Secretary draws a warrant the fact should be recorded by a journal entry. If a loan is made and a warrant drawn on the Treasurer for the whole amount, the entry would stand: "Loan Account-to Treasurer."

We believe that no special elaboration of the Cash Book or auxiliary books will allow a Secretary to dispense with the Journal. If he does dispense with it, he is liable to go a good ways around in accomplishing the same end, thereby increasing labor and multiplying chances of

error.

The Dues or Installment Register.-This book, as previously explained, is made to serve the purpose of a Petty Ledger and a Stockholders' Register combined. The accepted form of Dues Register, which may be obtained from manufacturing stationers who make a specialty of such books, is so near perfect that there is nothing we can suggest in the way of improvement. It is a book with broad leaves of demy or royal sheets, and is ruled in such a way that there is room on the left for the entry of the names of stockholders. These names being alphabetically arranged by separate series or as a whole, makes the finding of any particular name an easy matter. The broad pages are ruled in sets of columns; one set for each month in the year, and each set comprising a column for Dues, a column for Interest, a column for Premiums (when