Payments of this character are not allowed as a charge against profits for Income Tax purposes under Section (100) of Schedule D, 1st Case, Rule 3, and Section (159) of the 1842 Act. A number of cases on this subject have been referred to above under the heading of ” Deductions,” viz., Reid’s Brewery Co. v. Male (1891), see page 960; Southwell v. Savill Bros. (1901), see page 961 ; Watney v. M us grave (1880), see page 961 ; Royal Insurance Co. v. Watson (1897), see page 962; Alianza Co., Ltd. v. Bell, see page 962 ; and City of London Contract Corporation v. Styles (1887), seepage 962.

The firstmentioned are not assessable, and capital losses are not allowed as a deduction in arriving at the assessable profits for assessment purposes. Capital profits would include those as may be received on the sale of investments, where dealing in securities is not part of the business of the person to be assessed. The profits made on sale of investments by a trust company, which makes a practice under power of its Memorandum of Association of realising securities, are assessable to Income Tax thereon. Depreciation of other securities may not be charged in arriving at the amount upon which assessment should be made. (See Scottish Investment Co. v. Forbes (1893) 3 Tax Cases 231, and Northern Assurance Co. v. Russell (1889) 2 Tax Cases 571.) Examples of Capital Profits and Losses. (1) If a firm or business disposes of any of its capital assets (such as its buildings, its plants and machinery, or its lease of premises) and makes a profit, this would be regarded as a capital profit, and would not be assessable. (2)A company purchased an estate for the purpose of producing rubber. It proceeded to develop it, intending to bring it into bearing and selling the produce for the benefit of its shareholders. The rubber boom came along, and, taking advantage of the market, the company disposed of its whole concern and realised a substantial profit over and above the cost of the estate and all outlay thereon in connection with developing it. No Income Tax was charged on the profit. (3)If, however, a syndicate had purchased the estate with a view to selling it as a whole, and a profit had been realised under similar circumstances, the profit would be assessable. Gifts received (i.e. receipts in respect of which no consideration is, or has been given) are not assessable to Income Tax, and even where they take the form of a voluntary annuity, they will not be charged with duties unless it is given under a deed or in respect of past services (e.g. a retiring allowance made to an old clerk or servant).

The simplest examples of fraud are those which may be carried out by the cashier of a business, and particularly us this the case in small businesses where the casluer not only receives and pays cash but acts as clerk also, because, acting m the dual capacity, it is easier for him to manipulate the books in order to cover his embezzlement of cash In cases such as these, it is sometimes found that a cashier has passed through his Purchases Book would be far more difficult for him to obtain a crossed cheque which would previously have had to be signed and scrutinised either by the partners in the firm or by the directors of the company employing him. Furthermore of the cheque when presented for payment had been specially crossed or marked ^ negotiable ” it would have been still more difficult to negotiate.

The different sources of income under the Income Tax Acts are classified under five schedules, viz., A, B, C, D and E, which may be conveniently explained as follows 1.Schedule A deals with the income of owners of houses and land based upon rent or annual value. 2.Schedule B deals with the income of occupiers of land as regards the profits of such occupation, based, as in the case of Schedule A, upon rent or annual value, the duty, however, being charged upon twice the gross annual value, including tithe, subject to the right where the occupation is for the purpose of husbandry only (a) to be assessed on the actual profits of the year of assessment, if proved at the end of the year of assessment (see Income Tax Act, 1918, Schedule B (6) ; and (b) to be assessed under Schedule D if within two months from the commencement of the year of assessment, the election to be so assessed is signified to the Inspector of Taxes for the District (see Income Tax Act, 1918, Schedule B(5). 3.Schedule C covers the tax of income from Imperial, colonial and foreign public revenue, which is levied upon the amount received. 4.Schedule D, sub-divided into six cases (set out below), charges the profits of any trade, profession or other occupation not included in any other schedule. Cases under Schedule D Case 1 has reference to the profits of any trade, manufacture, adventure, or concern in the nature of a trade. Case 2 covers the income from professions, employments or vocations not contained in any other schedule. Case 3 embraces profits of an uncertain annual value not charged in Schedule A. Case 4 deals with interest arising from colonial and foreign securities other than that to be charged under Schedule C. Case 5 covers income from colonial and foreign possessions. Case 6 treats with annual profits or gains not falling under any other schedule. Income falling under cases 1, 2 and 5 is generally charged upon an average of three years, that under cases 3, 4 and 6 being generally upon one year’s results. 5.Schedule E forms the charge for income of persons employed under the State, or otherwise publicly employed, such as officials of public corporations or companies. Incomes not Chargeable. Certain income is not assessable to Income Tax, the chief instances being (a)Rents, dividends and other income devoted to charities, hospitals, etc. The buildings of almshouses, hospitals, etc., are also exempt in respect of tax under Schedule A. (b)Similar to income under the previous heading, that of friendly, industrial and provident societies is exempted, and the universities and similar institutions, including the British museum, are not taxed in respect of public buildings belonging to them. (c)Trade unions, approved societies under the National Insurance Act, and savings banks, all can claim relief from Income Tax. Rates of Income Tax and Super-tax. The Finance Act, 1921, continues the standard rate of Income Tax at 6s. in the

Collectors and travellers, where the latter also act as collectors, are in very much the same position as the cashier of a business, except that they have far more freedom of action, and spending their lives in an environment which may possibly lead them into a mode of living in excess of their income, are more susceptible to misappropriation of funds in their hands than is the cashier of a business over whom more control can be exercised. In such cases the best preventive is to pay the official a salary commensurate with his responsibility and insure him for the maximum sum which he is likely to have in hand at any time. “Where there is an absence of strict supervision, there is a large scope for fraud in connection with the accounts of branch shops and agencies, either by embezzlement of cash or stock, as of necessity the manager must have extensive powers. In certain businesses this is to some extent met by charging all goods to the branch at selling prices, the manager having to account for the same by cash, discount, book debts or stock taken on the same basis, the advantage of this system being that it obviates the necessity of keeping elaborate Stock Accounts. On the other hand, in some cases, goods are charged out to the branch at ordinary prices, and absolute reliance is placed on the manager until such time as the periodical accounts show unsatisfactory results, when it is probably immediately assumed that the man must be either a fool or a rogue, and, neither j being of any use to the proprietor, he is dismissed j on the first opportunity. Fraud very frequently occurs in the Wages Accounts of large undertakings, where in some ! cases the wages bill runs into several thousands of pounds a week. Sometimes names are duplicated, sometimes dead men remain on the wages fist for a considerable period, and sometimes the frauds are due to merely arithmetical errors in the additions or extensions of the wages lists, or alterations in the lists after payment.

Whilst it is generally admitted that so long as human nature is what it is, so long as ambitious persons desire to attain their ends by too speedy and illegitimate means, so long as the slothful desire to place themselves in the position of the industrious without going through the necessary preparation and years of work that the latter have had to undergo, so long will there be some inducement for the unscrupulous and clever to commit fraud and falsification for a time, a course of conduct which often seems to the uninitiated to be fostered by the judiciary when comparison is made between the altogether inadequate punishment meted out in connection with many frauds, when prosecution and conviction has followed, and the heavy penalties inflicted in connection with many minor offences. In the long run, however, whatever may be the nature of the fraud, the probabilities are that it will eventually come to light, to the discomfiture and social ruin of the perpetrator, whether he be proceeded against, or whether he be treated with that generous compassion which is one of the brightest features of modern commercial life.

Cost Accounts are of a nature which lend themselves easily to fraudulent manipulation, especially so in the case where there are not a large number of persons employed upon the summarising of the details and keeping of the Costing Accounts. This is sometimes due to the somewhat illiterate class of person which is chiefly instrumental in preparing the original memoranda from which the Cost Accounts are eventually prepared. Where a large number of contracts are in hand at the same time, and where they extend over a considerable period, it is possible for the labour and materials used and employed upon an unprofitable contract shortly drawing to a close to be charged to some new contract which has only just begun, or upon which there are hopes of making a considerably larger margin of profit. In cases such as these, provided that the firm is continually obtaining new work, and the contracts are of a sufficiently large nature, it is comparatively easy to continue the manipulations between various contracts over a long period of time, but in these cases, as in most others, there comes a day of reckoning, when the manipulations in the accounts are brought to light, possibly by a slackening in trade, whereby an unusually large number of contracts are terminated in a particular financial year, or possibk owing to a detailed investigation of the amounl appearing in the Balance Sheet under the head ol ” Uncompleted Contracts on hand,” owing perhaps, to the large amount to which this asset had in course of time amounted to. Another class of frauds is that in connection with executors and trustees. The obligations imposed upon such persons are usually of an onerous character and their liability, even for quite innocent neglect of duty, is often extremely heavy, therefore any breach in the performance of what is almost a sacred trust is the more to be deplored Especially in the case of trustees, where the beneficiaries are perhaps only young children and the trust extends over a period of years the . trustee, if he is so disposed, frequently has it in his power to deprive the trust of the whole of the estate. How often is it experienced that the capital of an estate has been the meantime being paid until the day arrives upon which the estate is to be handed over to those entitled to it. The great safeguard against such a calamitous state of affairs is to provide that the accounts of the trustee are subjected to periodical audit Somewhat akin to this class of fraud is the concitors of moneys entrusted to their care. These cases are unfortunately of somewhat frequent recurrence but it is satisfactory to note that apart from the action taken by the Law Society towards such of its members as transgress the law, the Courts regard this crime as particularly, despicable, and mete out justice accordingly. So long as those m possession of means do not protect themselves against such frauds, there will always be found unscrupulous persons ready to take advantage when occasion presents itself.

A French term having reference to the forced circulation of irredeemable paper money.

One who possesses considerable means which may be used in his own business or invested in the enterprises of others.

The clearing-house term indicating the checks, drafts, etc., which a bank presents at the clearinghouse, or which it has for collection. Also referred to as collection items.

The Toledo, St. Louis & Western R. R. Co. The name Clover Leaf was suggested by some imaginary resemblance of the three States in which this road is located

Actual money on hand or within easy reach. Property quickly convertible into money is often included. Cash Book. One of the account books used in bookkeeping, and one of original entry. In it are directly entered every transaction involving receipts or expenditures of cash, with a full explanation of each item. It is customary among many bookkeepers to balance this book at the close of each business day. The balance at such times should equal the amount of actual cash on hand.

All Europe, exclusive of the British and other Islespaper money, issued by authority of the Congress during the Revolutionary War, and used to defray the greater part of the expenses of that warAn enormous amount of it was put out, the sum total being about $360,000,000The market became so glutted with it that it depreciated tremendously, and finally became almost worthless, one instance being reported where $1,000 in this currency was given in exchange for $1.00 in silverThis explains our common expression don’t care a continental.

A method used in telegraphing or cabling, by which one word may be interpreted, by the use of a key, to mean several words or an entire sentence, thus not only reducing the cost of the message, but at the same time enabling the .contents of the message to be kept secret, supposing a private cipher code to be used. There are, however, many codes upon the market which are in general use: but the sender of a message in such a code should refer to the name oi the code used as the first word in his message, unless it is understood between the sender and the receiver the particular cipher code from which the message was compiled.

An English institution which formerly issued checks to persons desiring to remit money to a distant point. A postal money-order or express money-order in this country serves the same purpose. Further functions of this institution were as set forth by one well-known financial writer as follows: The Cheque Bank proceeds on the new principle of issuing cheques which can be filled up only to limited amounts, as shown by printed and indelible perforated notices upon the forms. These cheques, too, are only to be had in exchange for the utmost sum for which they can be drawn, which sum is retained as a deposit until each corresponding cheque has been presented. It follows that each cheque, when duly filled up and signed by the owner, is as good as a bank-note issued against a documentary reserve.

An order received to buy and an order to sell the same stock at the same price by a broker, in which event he might let one order offset the other and not fill them upon the exchange at all. It is contrary to the rules, however. Suppose Jones & Co. receive an order to sell lO’O shares of a given stock at 90; at the same time they receive an order for the purchase of a like amount of the same stock at the same price. All transactions by a member of the stock exchange, in what are known as stock exchange securities, must be made on the floor of the exchange, and the quotations made. It would be perfectly proper for Jones & Co. to match up, as it were, the purchase of this stock against its sale, provided that there was no other like amount of the same stock offered at a lesser, or bid for at a higher, price on stock exchange than 90. In actual practice, the broker goes to that part of the exchange where the particular stock is dealt in, and declares to the other brokers that I will take to myself 100 shares of

This is explained under Lombard Street.

Acting contrary to the tip, or information received.

Galveston, New Orleans, Mobile, Savannah, Charleston, Wilmington, etc.

Changes in prices by small fractions; or a difference between the bid and asked price of but, say, 1-8%.

Any bonds which have attached interest notes or coupons which may be presented for payment at stated intervals as the interest becomes due, and which notes or coupons are made payable to bearer. (See Coupon.)

Securities which, at the option of the holder, are convertible, under certain conditions, into some other security, issued, usually, by the same corporationFor examples see Convertible Bond, Convertible Collateral Trust Bonds, and Convertible Debenture.

Some large banks have the work so subdivided that a special clerk known as a coupon-clerk attends to the collection of bonds and coupons, whether such are among the bank’s deposits or left by its customers for collection. If there is a corresponding clerk in the bank, the coupon-clerk would turn over to him bonds or coupons payable out of town. The coupon-clerk has minor duties to perform, but those already mentioned are the principal ones.

A note that is secured by a mortgage on stock cattle, or cattle in the feed lot; that is, cattle which are being prepared for the market either by the producer or breeder, or by the feeder who takes developed cattle and fattens them. These notes are almost invariably secured by a mortgage on the cattle, and are not usually discounted (see that subject), but with interest running from date. A chattel mortgage securing the note includes, in some cases, the corn which is being fed to the cattle. Strictly speaking, cattle paper would not include a note secured by a mortgage on dairy cows. These notes are mostly made by banks situated in, or tributary to, the grazing section of the country.

Bonds called for payment or redemption. In many issues of bonds the right is reserved to pay off all, or a certain portion of the issue, under conditions and at such times as may be specified in the bonds and deed of trust. Bonds which are callable, that is, subject to this right of prepayment, are oftentimes considered undesirable, owing to the fact that the notice of a bond being called may not reach the attention of the holder, and, as a result, he may lose interest by not discovering that it has ceased until the time of presentation of the next coupon. It is important, therefore, that the holder of a bond subject to redemption previous to its actual maturity, shall be conversant with the terms under which such bond may be called, and ascertain from time to time whether or not the call has actually been issued. It is proper that the banking house selling such a bond should itself keep track of this matter, and notify its customer in case of a call being issued affecting any of his securities, and many bankers try conscientiously to do this; but in spite of their best efforts calls are apt to pass unnoticed (and if so, no blame should be placed upon them), so it is wise for each holder to protect himself in this regard.