That on December 1 1906 it paid a nine per cent. dividend.

That the Trust in July 1906 sold ice at an average price of 4.78 dols. per ton that cost only 1'94 dols. per

ton, and earned 71 per cent.

That it has a monopoly of the natural and artificial ice output, especially in Greater New York.

That it secured control of the Maine ice fields, and cut the harvest last year from 1,500,000 to 500,000 tons. That it similarly controls the other sources of supply. That by means of its control of the landing places in this city it increased the price per ton at the wharves

from 120 dols to 5 dols. and 6 dols.

That by these means the price of ice to the poor was from 10 dols. to 14 dols. a ton.

tection, from the hands of Parliament, and the longer it is delayed the greater will be the multiplication of unqualified practitioners whose entrance is unhampered by any of the restrictions which obtain in other professions.

Any scheme of registration should, I think, provide in the first instance for such persons as have qualified by examination, or are actually and have for a stated period been in practice as public accountants or who hold the position of accountant to a company, and future admissions would, no doubt, be regulated by a system of examinations controlled by a joint Board of

Correspondence and Enquiries.

All communications to the Editor should be by letter only.

[We are at all times ready to insert correspondence on matters of interest to the Profession, but we do not of course hold ourselves in any way responsible for the opinions expressed by our correspondents. Correspondence intended for current issue must reach us at the latest by Wednesday afternoon; and must in all cases be accompanied by the name and address of correspondents, not necessarily for publication, but as a guarantee of good faith.]

Registration for the Profession.

(To the Editor of The Accountant.)

SIR, In addition to the well advanced arguments in favour of registration as a means of deterring persons of somewhat doubtful repute, and qualifications which are conspicuous by their absence, from their present privilege (when every other profession is closed to them) of describing themselves as "accountants," in the hope of inducing business of any description in their direction, may I advance another reason which I have not yet seen used. That is, the fact that all clerks employed in the accountants' departments of our great companies are at liberty to, and do, describe themselves as accountants, and I may instance as a case in point one of the leading railway companies, where, in a department employing some hundreds of clerks, all arrogate to themselves the term "accountant." This alone is a sufficient reason for the profession to combine in securing a legal status

Income Tax on Bank Interest.

(To the Editor of The Accountant.)

SIR,-I have read the letter of "Burgh " in your issue of 5th inst. It would appear to me that the question of the arrears must be determined by the fact whether or no your correspondent gave regular notice of appeal year by year. If he did not do so, I fear he would be unable to reclaim, although it might very reasonably be hoped that the Board of Inland Revenue, in view of the circumstances, would have decided otherwise. Yours faithfully,

5th January 1907.

F. LODGE ROSSER.

(To the Editor of The Accountant.) SIR,-In reply to your correspondent "Burgh," if the bank is one within the United Kingdom, and the overdraft is a fluctuating amount, the bank will have charged the interest in full and returned it for income-tax purposes in their own return, and the company was quite justified in its protest, that the amount should be allowed as a charge against its profits. The only means of recovering the tax paid for past years would be to send in a detailed claim to Somerset House showing the amounts of interest and the tax overpaid, accompanied by a certificate from the bank that these items of interest have been accounted for in the bank's return for income-tax purposes. It is possible that the Inland Revenue authorities might allow the amounts overpaid during the whole period, but it is more probable that

B. W. Hardcastle, J. S. Harmood-Banner, M.P., A. C. Harper, D. Hill, W. C. Jackson, F. A. Jenkins, H. Woodburn Kirby, G. Walter Knox, J. G. Litton, J. Mather, A. O. Miles, F. W. Pixley, W. Plender, F. J. Saffery, T. G. Shuttleworth, G. Sneath, J. M. Wade, E. Waterhouse, and F. J. Young.

Mr. Walter Sydney Hunt, A.C.A., of 375 & 376 Birkbeck Bank Chambers, Holborn, W.C., having been adjudicated bankrupt, was excluded from membership of the Institute.

At the ordinary meeting of the Council, held at the conclusion of the special meeting, the Examination Committee reported the results of the examinations in November and December 1906 as follows:

:

Passed Failed Total

Examination Gems.

(To the Editor of The Accountant.) SIR,-The following "howlers" may contribute to the gaiety of your readers. I selected them from some papers I recently had to mark in a "Bookkeeping" examination :

"Goodwill "-The difference between the amount of a business as purchased, and the amount it is afterwards found to be worth!

"Bank Discount" is charged for giving cash for a bill before it is due, because the bankers have to wail (sic) a long time for the money.

"A Counterfoil" is affixed by a perforation to the left side of a cheque.

8th January 1907.

Yours faithfully,

F. C. A.

The Institute of Chartered Accountants in England and Wales.

Ar a special meeting of the Council, held on Wednesday, the 9th January 1907, at the Hall of the Institute, Moorgate Place, E.C., there were present :Mr. W. B. Peat, President, in the chair; Mr. J. B. Ball, Vice-President; and Messrs. W. Ashworth, J. W. Barber, J. H. Blackburn, W. Blease, E. M. Carter, Ernest Cooper, Sir John Craggs, Messrs. W. H. Fox, John Gane, A. H. Gibson, T. Gregory, J. E. Halliday,

Ward, H. B. (E. Hart), London.

Final Examination.
Prize and First Certificate of Merit.
Carder, F. W. (T. H. Gough), Dudley.

Certificates of Merit in Order of Priority.
Bristol, C. F. (W. Thomas), Birmingham.
Yeoman, L. J. (G. Clark, junr.), London.
Cross, J. G. (J. Benson), Newcastle-upon-Tyne.
Spark, F. V. (E. Sparks), Newcastle-upon-Tyne.
Raymont, F. R. (E. P. Chevalier), Liverpool.
Bairstow, E., (B. Turney), Halifax.

Garratt, A. (A. E. J. Lark), Great Yarmouth. Wood, W. T., B.A. (H. Woodburn Kirby), London. Chandler, G. L., B.A. (A. A. Adams), London. Anderson, C. (W. C. Jackson), London.

ment will be apparent from the supplementary observations I will make in closing this address.

I desire to express my wish to avoid any remarks of a political nature in dealing with this complicated and difficult subject.

We know that whatever party is in power the Government of the country cannot be carried on without money; and we all agree that taxation should be adjusted, as nearly as possible, proportionately to the means of each individual, that the burden should be made to fit the back which has to bear it, so that the strong shall carry the heavy load and the weak the lighter one.

But when we begin to consider how it is to be done our difficulties commence, and they thicken fast as we grapple with the practical aspects of the problem; for we have to deal with indirect as well as direct taxation, in order to arrive at a just conclusion, whereas income-tax itself comes only under the latter heading.

My reasons for choosing this subject, "Graduation of Income-tax," are twofold.

First, a Select Committee of the House of Commons has been engaged during the past six months or more in investigating the practicability of graduating the income-tax, and of differentiating between permanent and precarious incomes. The Committee has finished its work, as regards taking evidence, and is now compiling its report.

Second, as it is necessary to understand the structure

tants Students' Society.

Graduation of Income-Tax.-To what extent is it Expedient and Practicable?

By Mr. C. E. ISAACS.

A PAPER read before members of the above Society on December 5th 1906.

Introductory.

The preparation of this lecture was completed before the Select Committee of the House of Commons, appointed to inquire into the subject, had made its report to Parliament on the 30th November; but I have decided to deliver it unaltered, as the Committee's conclusions have not modified mine in any way.

Where we agree, I am glad to see how largely I confirm their views; where we differ, the reasons for such disagree.

which it is founded, to be able to determine how far graduation is practicable as well as expedient, it is my desire to convey, in a form which will interest you, some serviceable information.

I will now state my views, which are based not merely upon theory, but on expert knowledge and experience, gained during thirty-nine years over a very wide area.

Every one derives benefit from settled government, and should contribute in a fair degree to the cost of it.

The income-tax appeals at once to the popular mind as the fairest mode of taxation.

Some say, "Let every man pay a uniform tax on his income." Others would differentiate between what is earned and what is enjoyed without labour.

Meaning of the Terms "Graduation" and "Differentiation."

Strictly speaking, "graduation " means the imposition of a small rate of income-tax on small incomes, and a scale of rates ascending as incomes increase.

"Differentiation" means making a distinction between

earned and unearned incomes, and charging the latter at higher rates than the former.

My remarks will relate mainly to graduation"; but as " differentiation" cannot be entirely separated from it, I have to include it within the scope of my lecture.

I.-IS GRADUATION OF INCOME-TAX EXPEDIENT?

It may be conceded at once that graduation of taxation, in its broadest sense, is both expedient and necessary; and, so far as income-tax in this country is concerned, the principle is already recognised in financial legislation.

Enormous masses of our population are so poor as to be unable to pay any direct taxation whatever.

Others, who can afford to pay something, suffer hardship or inconvenience if only an extra penny is added to the rate of duty.

Others, again, are so wealthy that if the rate were doubled or trebled, they would feel no pressure whatever. The law already recognises all this, and provides accordingly that graduation shall be applied, not, indeed, by charging a higher rate of duty to a large income, and a lower rate to a small one, but by applying a system of partial exemption, called abatement, in connection with a uniform rate of duty.

Take, for example, a man who has a total income of £200 a year, consisting of salary only, and another who, besides a salary of £200, has likewise sources of income otherwise taxed, bringing his total income up to, say, £800. In the first case, an abatement of £160 would be granted, and tax would be required at 1s. per £ on £40 only, equal £2. In the second case the tax would be required on the salary of £200 in full, amounting to £10.

Graduation is obtained whether there is a varying rate without allowance of "abatements," or whether there is the allowance of "abatements" in connection with a uniform rate of duty. As to the latter method, we can see its effect in the examples given above.

In the one case the total income from all sources is £200, on which 2 duty is chargeable, equal to 2gd. per £.

In the other case the total income from all sources is £800, and the £200 salary, which forms part of it, is consequently charged £10—that is, 1s. per £.

Moreover, by the application of the system of abatements already in force, in connection with a uniform rate of duty, the graduation is granted automatically in a more equitable and perfect way than what is practicable by introducing varying rates of duty.

For example, assuming that a 4d. rate is laid on incomes between £200 and £300, the income of £201 gets no more

benefit from graduated rates than the one at £299, though the latter income is practically half as much again as the former; but under the system of abatements the lower income would pay 13s. 8d., while the latter would pay £2 6s. Sd., about three and a-half times as much, equalling a rate per of about four-fifths of id. and 2d. respectively-obviously a far more equitable result of graduation than what is attained by varying the rate. Instances might be easily multiplied, but I submit I have shown that graduation of income-tax is already in practical operation under existing law, and in the most effective form.

To render the tax absolutely just in its incidence, it would be necessary to consider not only the amount of a person's income, but what he has to do with it,—what burdens and liabilities he is subject to, and in what manner and to what extent he contributes in other ways to the revenue by means of indirect taxation.

A bachelor with £150 a year, who pays no income-tax, can better afford to pay, as a rule, than a married man who maintains a large family on an income of £180, and who has to pay not only income-tax, but also more in the way of indirect taxation than the single man, especially if the latter consumes neither alcohol nor tobacco.

One person may have sick or aged and helpless relations dependent on him, from which burdens another person may be entirely free. One person may have to pay out of current earnings old debts caused by sickness or misfortune, while another is able to devote all his income to the present benefits of his family and himself.

Income-tax cannot be assessed with absolute justice, without weighing in detail the circumstances of each individual case; and it is clearly impracticable to attempt such a task.

It is impossible for considerations of this nature to be allowed to enter largely into matters of income-tax assessment; but if they could be, they would seriously affect the case in estimating the taxable capacity of each person.

Extension and Enlargement of Abatements.

The present system may be adapted to attain the object for which graduation is proposed to be introduced, by extending and enlarging the abatements; but it will be futile to attempt to remedy existing inequalities by means of a scale of rates, as I shall illustrate a little later on.

The constant efforts made by Parliament, since the modern income-tax was introduced in 1842, to remove from it all elements of hardship and injustice have added largely to its complications, so adverse to its smooth and simple working.