same place. It appears that on these subjects involving interlocking directorates the Special Committee was so divided in opinion that it made no recommendations but the expression of the Chamber was as above.

"Another declaration (this by vote of 432 to 75) was that corporate ownership of stock, directly or indirectly, of competitor corporations should not be prohibited unless elimination of competition among the corporations in question would constitute a violation of the Sherman act, except in such instances as the Interstate Trade Commission, or the Interstate Commerce Commission in the case of railroads, might determine are not detrimental to the public interest.

or

"The Senate and the House bills are alike in dealing with two situations," says the Committee. "(1) where a corporation buys stock in a competitor corporation and (2) where corporation buys stock in two more corporations which are competitors among themselves. In the latter instance only is the purchasing corporation usually called a 'holding company'. The bills are also alike in making such a purchase of stock illegal only if the result is to lessen competition in a substantial degree. There is dissimilarity, however, in that the House bill would leave the question of lessened competition to the courts whereas the Senate bill makes it a subject for administrative determination by the Interstate Trade Commission or the Interstate Commerce Commission, as the nature of the corporations may determine.

"As in the case of interlocking of directors, any proposal for legislation regarding corporate ownership of stock should be so formulated as accurately to reach a situation which is contrary to public policy and to affect no other. The provision for a finding by a commission that the facts in a particular case do not involve detriment to the public interest will permit legitimate corporate ownership of stock in situations where modern conditions leave no practical business alter

nate.

"For example, the laws of some

foreign nations are such that an American manufacturing corporation must organize a selling corporation to do business in each of these countries. It happens, too, that the laws of some states do not permit a corporation organized under the laws of another state to hold real estate and

a local corporation becomes a necessity. The laws of some states by placing discriminating burdens on corporations of other states that do business within their borders in practice compel the creation of a local corporation. These are but instances of situations in which corporate ownership of stock in other corporations is a prerequisite for doing business upon an equitable competitive basis."

The Chamber also (by vote of 445 to 74) declared that there ought to be no attempt to regulate the shares of stock issued by corporations engaged in interstate commerce. "Watering of stock by business and industrial corporations," says the Special Committee, "is the subject of a provision in the Senate bill. The Senate bill declares that no corporation, except banks and banking institutions engaged in or affecting commerce which Congress has power to regulate under the Constitution, can in the future issue stock unless it is paid for in full at par or unless there are contracts on the part of responsible subscribers to make such payment. Furthermore, if any such corporation proposes to accept services or property in payment for stock, it must obtain from the Interstate Trade Commission a certificate of actual value, and take payment only at this value.

"No argument is known which supports this proposal. If an interstate trade commission is created with power to require annual reports of all corporations corporations engaged in interstate commerce, the publicity given to these reports will be an effectual corrective of any abuses that may exist. Enactment of the proposal of the Senate bill would impose upon the Interstate Trade Commission a task of great proportions, at the beginning of its career. Federal laws on the subject do not seem necessary. The states which

create the corporations have laws regulating issue of stocks, and some of the states have corporation commissions. Furthermore, legislation of this sort, being largely for protection of investors, belongs peculiarly within the jurisdiction of the states. If there is to be federal legislation in accordance with the Senate bill, it should be enacted as part of a broad program of federal incorporation of businesses which engage in interstate commerce."

With reference to the provisions of the House bill that are intended to exempt labor, farmers' and other organizations from the provisions of the anti-trust laws and to limit the power of the courts in certain cases to issue injunctions, the Board of Directors of the Chamber has adopted the following resolutions:

"Whereas, in response to Referendum No. 3 this Chamber, by a vote of 669 to 9, declared itself opposed to legislation which places the laborer and the farmer under a different rule of law from the merchant, manufacturer and miner, and

"WHEREAS, the Sundry Civil bill now before the House contains the identical clause which in the same bill of last session was the occasion of Referendum No. 3" (this bill containing the clause referred to has since become a law), "and

"WHEREAS, the Clayton bill to regulate trusts and monopolies, which has now passed the House and is before the Senate, contains clauses discriminating in favor of associations and organizations of laborers, agriculturists, horticulturists and consumers and the members thereof, and

"WHEREAS, these clauses in the said Clayton bill constitute the second step in the progress of legislation which is arraying the employer against the employe, the farmer against the merchant, the horticulturist against the manufacturer, the consumer against consumer against the producer, and is not only wrong in principle but so harmful and far reaching in its effects as in our judg ment to gravely endanger the stability of a government founded upon equal rights to all men, and

"WHEREAS, it is the duty of this

Board under its constitution and bylaws to do all in its power to make the voice of the Chamber, as expressed in response to its referenda, heard and heeded,

Now BE IT RESOLVED

"1. That a memorial and protest be presented to the President of the United States.

"2. That a memorial and protest be presented to the Judiciary Committee of the Senate inasmuch as no hearings are being held by that Committee.

"3. That the special attention of the constituent members of this Chamber be called to the form as well as to the substance of the first of the clauses in the Clayton bill above referred to a form said to be adopted because of its doubtful meaningsome contending that it will legalize violations of the Sherman act when made by certain associations and organizations therein referred to and by the members thereof, while making unlawful the same acts when committed by all other association and organizations or the members there-of others contending that it merely declares such associations and organizations not to be ipso facto conspiracies in restraint of trade, but does not legalize any act which they or their members may commit in violation of the Sherman act or of any other law.

"If this clause is to be accepted as excusing the misconduct of the organizations named, it constitutes a partial repeal of the wise and comprehensive inhibitions of the anti-trust laws. If it is to be construed as merely legalizing the existence of these organizations it is useless because the anti-trust lazes do not challenge them. In either event, this clause is unwise, first, because it represents a distinct and affirmative recognition of one class of organizations when similar recognition for other organizations is denied, and this discrimination must prove as unfortunate for the first class as it is unfair to the other; and second, because the adoption of the clause would throw upon the courts the burden of interpreting the intention of Congress when Congress has obviously

no definite intention, and thus tends to discredit and cast odium upon the courts. Moreover, the clause unquestionably furnishes embarrassment to the Executive Department in the impartial enforcement of the law.

"4. That a copy of these resolutions and of the memorials above referred to be sent to each member of the Chamber-constituent and individual-with the earnest request that such steps be promptly taken by them as they may deem proper in support of the spirit and purpose of these resolutions."

CONSERVATION

The Importance of Forestry and Lumbering to the Industries

In an address to the recent Conservation Congress, Mr. E. T. Allen, of Portland, Oregon, Forester of the Western Forestry and Conservation Association, called attention in a striking way to relative lack of knowledge. by the general public of the vitally important questions of economy that are involved in lumbering and the allied industries. According to Mr. Allen, lumbering is the greatest American industry and is exceeded only by agriculture in supplying the essentials of life.

He pointed out that forest preservation cannot be conducted wholly by business managers or boards of directors. "It is a mutual co-operative enterprise," he explained. "requiring daily participation by all concerned. The American forest policy must exist, not because a few say it should, but because a majority of citizens understand what is needed and why it is needed and put the policy into effect. The only reason the average citizen does not realize the importance of forestry and does not give it the same active and intelligent interest that he gives his home town problems is that he cannot see it so clearly. The very immensity and importance of the lumber industry causes its several processes of growing, manufacturing and distributing to be conducted separately,

and this confuses the public mind. Different communities see different parts of the whole process, but get no thorough grasp of forest eco

nomics.

The

"In many a little German village the whole community sees the forest grown, cut, manufactured and used. Those who do not actually participate serve or supply those who do. Their forestry needs no propaganda. people could not understand the need for it any more than of propagand: for raising wheat and making bread. We talk too much about forests as though they were an end in themselves. We might just as well talk only of land when trying to improve agricultural conditions, or of water when urging the protection and propagation of food fishes.

be

"The average citizen must brought to consider all forest production and all forest use as little or no different from the production and use of any necessary crop, obviously to be encouraged and stabilized on a permanent basis profitable to all concerned. Whether he is a private citizen or a law-maker serving private citizens, he must be familiar with all the factors. As long as he thinks an uncut forest is forestry, and that such forestry is good and all lumbering bad, there will be no real progress.

"There is little trouble in passing laws for the protection and advance of agriculture, horticulture and dairying, because people understand the governing conditions of these industries and see the point of such laws readily. To succeed in the United States, forestry must be so closely allied with lumbering that neither forester, lumberman nor the public shall make any distinction. This being true, the need is to teach the principles of the business from start to finish. Every process, its cost, and its relation to other processes and to the final price of the product should be common knowledge. The education of the public along these lines is the greatest need in forestry today."

The efficient manager has one object constantly before him: The elimination of waste. He realizes that every bit of material in his place can be used at 100 per cent efficiency or less; that every bit of energy that he pays for can be used at 100 per cent efficiency or less, and that time can be used in the same way.

He knows that things do not happen, that there is a cause for every effect, He knows also that men can be taught, for he is teaching them. He knows that stenographers in an office can be taught accuracy, speed, English, or how to write a letter. He takes from his department manager the time-wasting job of acting as primary school teacher to his stenographers.

He knows that foremen should simply supervise, they should not be expected to teach men the best ways of doing work. He knows that men vary in capacity, but he knows also that men learn to do better work at twenty-five than they did when they started as apprentices; that the best men have a certain way of doing things that can be taught to others, and, therefore, that a plant can be taught how to increase production. It is a question of analysis, planning and executing. Therefore, he goes at the proposition of raising efficiencies in a definite, concrete, tangible way, something like this:

1. He makes time studies of the work.

2. He places these studies in the hands of trained thinkers and scien

tific men who plan the work and fit. the schedules.

3. He establishes the idea of functional foremanship.

4. He makes improvements in shop. methods necessary to get the greatest possible product from the worker.

5. He puts a wage system at work that will place a premium upon the man who exercises the greatest efficiencey.

A big problem? Of course it is, but it must be solved as nearly as may be, must it not? Its bigness does not affect its pressing call for a solution.

The efficient manager, after analysis, adopts a plan starting with the Taylor System, or the Emerson System, or some one of the many, which all come under the general term of scientific management. He starts from somewhere to go somewhere in his management. Suppose he decides to start with the Emerson System. He tests his present management against the twelve principles of efficiency as Mr. Emerson calls them:

1. Definite Plans and Ideals.
2. Supernal Common Sense.
3. Discipline.

4. Competent Guidance.

5. The Fair Deal.

6. Despatching.

7. Reliable, Immediate and Adequate Records.

8. Determination of Standards.

9. Standard Practice Instructions. 10. Standardized Conditions.

11., Standardized Operations..
12. Efficiency Reward.

While this is not a treatise on efficiency but on cost keeping efficiency, intended to show how to eliminate the waste of time, work, thought, material (all of which spell m-o-n-e-y in business) in the handling of costs, yet it is necessary to explain the philosophy of efficiency if we are to handle costs efficiently. No manager can escape the necessity for knowing the value of what he does when it comes to costs any more than he can of any other part of his work. "Increase the net!" is the cry.

THE PHILOSOPHY OF IT

The efficient manager realizes that all work in a factory, in an office, goes by dependent sequence. No man's work stands alone. The other day a manufacturer was asked what he thought his efficiency was in different departments. He said he thought that his efficiency was "75 per cent at least". He forgot the law of dependent sequence. If the raw stock department was 75 per cent efficient, and the department to which it first went 95 per cent efficient and the next two were each 75 per cent efficient at the end of the fourth operation, the end result would be only 40:1 per cent efficient. If each of the four departments were 80 per cent efficient, the end result would be 41 per cent efficient. If one department were 75 per cent efficient and another depart ment 125 per cent efficient, the end efficiency would only be 93.75 per

Out of that will come the best1. Rate of pay for each man or

woman.

2. Number of people to be employed in doing a particular work.

3. Kind of men or women for each kind of work.

4. Standard time for the operation.

These standards should be indicated on the same records by which the system tells the actual things that were done in the work. In other words, it should show standards as well as performance on each record.

If the comptroller is necessary to show where money goes, then the efficiency manager is necessary to show what is obtained for the money. The cost accountant should be concerned principally with arranging his systems of cost-keeping so that reliable. immediate and adequate records may be kept of the value of the commodities received for the money invested.

The same record should show:
(a) The comptroller or auditor
where the money goes.

(b) The manager where standards
of value have been realized,
and where losses are occur-
ring in-

1. Time.

2. Labor.

3. Material.

He

In the past the cost accountant has too frequently been merely a man of figures, having little or no conception of what the figures really meant. was essentially a bookkeeper who didn't know the significance of the things he was handling. He was only concerned with totals, averages, percentages. So long as he secured his balance, he was satisfied with his results. He knew of no standards for comparing with values. He failed to realize that accounting really was balance sheets which are used as efficiency charts.

Balance sheets can be veritable mines of misinformation. Paper profits have mislead many a manager. A plant can be made to show fine profits on the balance sheets for a time. Efficiency charts would show up the real starvation at a glance.