UNIFORM MUNICIPAL ACCOUNTING.

JAMES BLAKE CAHOON, SYRACUSE, N. Y.

President, National Electric Light Association.

In discussing the able paper of Mr. Baker on uniform municipal accounting, I wish first to state that I am in entire accord with the views expressed by Mr. Baker, and only wish to emphasize and elaborate some of the principal points which stand out from the balance of the paper. The first point is the aid toward uniform accounting which might be rendered by voluntary organizations, especially if a scheme of co-operation could be devised.

During my business career, it has been my good fortune to be placed in charge, as manager, of all branches of quasi-municipal corporations with the exception of a telephone company, and for the past four or five years the point that has stood out most distinctly at conventions of the several societies of which these corporations were members is that of accounting and the lack of uniform accounting. At the time the National Street Railway Accountants' Association was organized, the divers ways of carrying out the accounting of street railways was brought forcibly home to me by reason of the auditor of our companies being on the committee on forms.

There were mutual concessions made back and forth between the accountants in an endeavor to secure a system which should have uniformity and simplicity, and while I do not agree with some of their forms of statements, yet a marked advance has been made towards securing uniformity, and the rest will follow. The railroad commissioners of several states have been so impressed with the earnestness shown and the excellent results produced that they have practically adopted the recommendations of the Association for the making up of their annual reports by

street railways, and very much the same form is required of steam roads.

Mr. Baker tells what has been done on the question by the three water works associations; I will merely add that the gas associations are agitating this question strongly, and at the last annual convention of the National Electric Light Association a paper by the present writer was presented, advocating the adoption of a uniform system of accounting by all members of the Association and presenting a system of accounting for both electric light and gas companies.* This was so well received that the entire morning was taken up in its discussion, and there was not a dissenting voice.

One of the points emphasized by the author was the necessity of publishing at frequent intervals a clear statement of all receipts and disbursements, giving the operating expenses in detail and showing just exactly what profit there is in electric lighting under a proper system of accounting, also advocating the placing of all public utilities under state control.

Mr. Baker touches only lightly on the determination of true cost, and I believe that every student of economy who has given this matter due thought is agreed that the determination of the true cost is the prime factor in settling the much vexed question of municipal ownership. For instance, Mr. Allen Ripley Foote, pursuing the subject from an editorial standpoint and myself, studying it from the more selfish point of manager of several corporations, arrived at the same conclusion,-that in order to show the true cost, it was necessary to include therein interest on investment, taxes, or if not paid, taxes relinquished, interest on money borrowed temporarily, and investment insurance, or depreciation as it is often termed.

Having determined the true cost in this manner for either a private or public company, it then becomes an easy matter to show whether it is better for a community to place the operation of public utilities in the hands of public officers or in the hands of private corporations. We are all seeking-that is, those of us who are serious in the matter-the path that is productive of the most good to the greatest number, and if it can be shown in

*Copies may be obtained from the National Electric Light Association.

this manner that public utilities can be operated cheaper and better by municipalities themselves, there can be no question but that private capital will abandon the field; but private capital does not as yet concede this, and in order to determine this point the National Electric Light Association made a proposition to the League of American Municipalities at their convention in Syracuse in September, 1899, in effect that they would be willing to stand one-half the expense of a careful examination of the subject and determination of the true cost of operation of municipally owned plants, this to be determined by independent engineers selected jointly by the presidents of the two associations. The cost as thus determined should then be compared with prices charged by the private company for plants of similar size and operating as nearly as may be under similar conditions.

An excellent point which Mr. Baker makes is that a senate or joint committee of all associations interested in municipal affairs should be formed, which committee will work for the adoption of uniform schedules for each branch of accounting, and ask the legislature of each state to organize a committee or board of control which shall have power to prescribe the manner in which the accounting of public utilities shall be rendered, and compel them to make a full report at least annually, which shall be published for the information of the public. I am in most hearty accord with this, and I know that the National Electric Light Association as a body will gladly co-operate with such committees.

By resolution introduced at the last convention of the National Electric Light Association, a committee on accounting was authorized, and the president of the Association has appointed as such committee four of the leading expert accountants of the county. They are authorized to go over the whole subject of accounting, and formulate a system which they are to present at the next convention for adoption. This committee stands ready to meet the committees of other associations and to do all in its power to secure a uniform and concerted action, formulate the necessary resolves to be presented to the legislatures of the different states for their adoption and making into laws to secure a uniform system of accounting and uniform method of control under a state board or committee.

The subject is so comprehensive, vast, and far-reaching in its results, that, as Mr. Baker says, only specialists should be enlisted in the work. This subject has been agitated for some time without much of any progress being made, and I think Mr. Baker has brought it to a head with his suggestion of the getting together of committees from the different associations, who will form a joint committee to take this matter up and push it through to a conclusion; in order to do this, however, the Association appointing committees must give them not only power to settle disputed questions of accounting, but agree to abide by the decision of the senate or joint committee, or, in other words, appoint their committees with the distinct understanding that they shall have full power to act in the matter. Give them this, and that joint committee will accomplish the result desired up to the point of presenting the necessary resolves to the different state legislatures—then the associations as a body must put their shoulders to the wheel and secure the passage of these resolves and the making of them into laws.

UNIFORM ACCOUNTING AND STATE EXAMINATION OF PUBLIC ACCOUNTS.

HON. HARRY B. HENDERSON, CHEYENNE, Wyo.,
State Examiner for Wyoming.

The privilege I enjoy of speaking in this Convention is appreciated. It is a high honor to have a place in your counsels, to listen to, and meditate upon the forcible and impressive addresses presented.

I am here upon the very kind invitation of your Secretary and have already profited by the proceedings of this meeting.

The subject you here discuss is one that deeply interests me, and I believe that it is one of the most important of the age in our public affairs. Uniformity in accounting has long since been recognized as essential by practically all the larger corporations of this and foreign countries. The banking interests, railway and insurance companies and other corporations all employ a uniformity peculiar to their respective business interests.

It is admitted in the addresses presented that to attain to the highest standard in governmental affairs, uniformity in classifying the receipts and disbursements of public corporations is necessary. This conclusion is shared by many similar organizations and by all those having the interests of the tax-paying public at heart.

The question, how to accomplish this end, is the one that is uppermost in our minds. It is a vexatious proposition and has been the subject of deep and earnest thought on the part of many of our leading men. The preparation of a system of uniformity in accounting that shall meet the requirements of the village,