would be difficult to turn into money. The Clearing House voted to say to all threatened banks that if they would turn over their securities to the Clearing House, then the Clearing House would issue its certificates for the obligations of those banks, and each bank in the Association would receive these certificates in place of cash for the settlement of balances. That was all that was needed. The Metropolitan Bank had to go under, but when Wall Street and the financial world in fact knew that the Association Banks of New York stood behind some of its weaker members, then it was known that the danger was over. The panic was thus ended, and when confidence was restored it was easy for these weaker banks to market their securities, and in that way redeem the certificates which the Clearing House had issued.

The general community did not know at the time, although bankers knew it, that it was the action of the New York Clearing House which prevented a panic that might have been as disastrous as that of 1857 or 1873.

Nearly four years ago the financial world was stunned by a report that the great banking house of Baring Bros. had suspended payment. A crisis was imminent, also during the stringency of 1893 this mighty institution saw that the time had come to make use of its enormous power. On both occasions the board met, took the securities of the tottering banks and issued Clearing House certificates to pay balances, thus this mighty engine with its colossal power was able to stay panic and prevent wreckage.

It has been felt by some financiers that this mighty power could be used to bring about colossal misfortune on which the bankers would reap their profits. And that is true, but before it could be thus used the majority of the bankers composing the Association would have to change their natures and become cold-blooded villains.

Indexing and Folioing. Before beginning to post, take your index and write the Ledger pages of all accounts to which you are about to post. When all the accounts are thus folioed you can lay the index aside, and proceed without reference to it, which will save a great deal of time. As the items are posted they should be checked.

When new accounts are to be opened in the Ledger, first turn to the index and write the name and the page number before writing in the Ledger. By making this a regular practice it will prevent opening a duplicate account and save much trouble to find an account, if you should fail to index it.

Posting Guide. The following cut represents a blotter to be used while posting to prevent posting to the wrong side of the account.

In posting from any book of original entry, make it a special point to post all the debits at one time and all the credits at another, instead of each debit and credit item alternately. By posting one side of the book at a time, it is an easy matter to keep in mind to which side of the Ledger you are to post, thus saving many mistakes which are made otherwise. There is no excuse for posting to the wrong side of an account if this method is used, together with the Posting Blotter, one side of which is marked DR., the other CR. When posting to the debit side, lay the blotter with the corner covering the credit side. When posting to the credit side turn the blotter over and cover the debit side. If this blotter is once used it will never be abandoned.

Dollars Posted as Cents; or Cents as Dollars. If the difference in the Trial Balance be a sum consisting of dollars and cents which, when added together, make 99, omit the cents, add 1 to the dollars, and the sum will be found posted as dollars when it should have been posted as cents, or vice versa. Thus: $73.26. 73+26=99; omit the cents and add 1 to the dollars gives $74. $74 will be found posted as 74 cents, or 74 cents as $74.

Correcting Errors. Never erase a wrong entry, or figures, all cor rections should be made by ruling a light line through the error and writing the correct amount above.

Reverse Posting is a modern feature in the science of accounts for testing the accuracy of the postings. The plan employed by many consists in putting a small colored ticket in the page to which an item has been posted. A Reverse Posting Book is also used, which is ruled with debit and credit money columns. With this book and the colored slips, the bookkeeper proceeds to post, and as he posts an item into the Ledger, he places therein one of these colored posting slips, debit or credit as the case may be. These slips are entered where the posting was made, leaving the ends projecting so as to be easily seen, using red slips for credits and yellow for debits.

When each book has been posted, he takes the Reverse Posting Book and posts into it the items just posted into the Ledger. The postings to the Test Book are then footed, and compared with the footing of the Journal or other book just posted, and if the two footings agree, he concludes that the posting has been correctly performed. The amounts posted to the Test Book are taken from the Ledger as indicated by the posting slips. If the footings of the books of original entry correspond with the footings of the Reverse Posting Book, the Ledger is considered to be in balance, and a Trial Balance unnecessary until the end of the fiscal year, when the books are closed. In using this method each book of original entry must be proven separately. My objections to this plan are the recopying of amounts, the liability to omit a slip after a post has been made, and the possibility of the slips sliding down between the pages out of sight, or getting lost in other ways. I have experienced all of these difficulties, and think that a better method is to dispense with the slips, and as soon as an item of debit or credit is posted, it is also entered in the Reverse Posting Book, the footing of which should agree with the footings of the books of original entry.

Proof Posting and Ledger Proof System. This system of proof posting is the most accurate that has ever been devised. Although it is not infallible, it will detect errors in footing, balances, transpositions, amounts carried forward, omissions, etc. An error in posting can be located at once to the page and account without reference to the Ledger. It can be adopted at any time, in any set of books without changing the system of bookkeeping, without additional books or

labor.

The secret of the system is in reducing the amount posted to a single number less than (11) eleven. This is done by casting out the elevens, or by dividing the amount by eleven, and taking the remainder as the reduced or check number. A simpler way to produce the check number is to add the figures in the odd places and subtract from this sum the sum of the figures in the even places, always beginning at the right. If the remainder should exceed ten it must again be reduced, as no check number can be greater than 10. For instance, to reduce $15.19, we add the figures in the odd or first, third, fifth and seventh places, beginning at the right; 9+5=14, from which we subtract the sum of the figures in the even or second, fourth and sixth places. 1+1=2; 14-2-12. This being greater than 10 mus again be reduced by subtracting the sum of figures in the even places from

the sum of the figures in the odd places, or 2—1=1, the check number. If you will divide 1,519 by 11 you will find the remainder to be 1, which is the number reduced or the check number. If the sum of the figures in the odd places be less than the sum in the even places, then it will be impossible to subtract. But when such is the case, you must add to the sum of the figures in the odd places, 11 or any multiple of 11 or 22, 33, 44, etc. It matters not how much is added, it will produce the right check number. To reduce $19,191.91, we must add 33 to the figures in the odd places, thus, 33+1+1+1+1=37, from which we subtract 9+9+9=27. 37-27-10, the check number. It matters not how large or how small the number, it can be reduced to a single number less than eleven. If the number should be one (1), of course the check number would be 1, because it is the only figure, and being in the odd place there is nothing to take from it. If the amount should be 100, it is readily seen that the check number would also be 1. If the amount should be 1,000, we see that there are no figures in the odd places, but must add 11 and subtract 1, leaving 10, the check number. With but a little practice you can reduce any number in an instant.

After practicing the reduction of various numbers, you will find it can be adopted to prove addition, subtraction, etc. To prove addition, find the check number for each amount, and write it at a convenient place that they can be footed. Then reduce the footing of the column to its check number, and see if it agrees with the check number taken from the footing of the check numbers. If they do not agree, the footing is wrong, or you have produced a wrong check number.

To prove subtraction the principle is the same. Suppose $5,728.91 to be the amount of the debit side of an account, and $2,929.38 to be the amount of the credit side, you will subtract the amounts as usual; but in addition to that you write the check numbers for both amounts and subtract them as follows:

In this case we find the check number of the balance to be 6; and in subtracting the check numbers we see that 8 cannot be taken from 3, therefore we add 11, which equals 14-8 gives 6, the proof number.

Having used the check numbers in proving addition and subtraction, we will now apply it to the prevention and detection of errors in posting.

Suppose the following to be a column in the Journal, and to prove the posting, we will first folio all the accounts. This is done that further reference to the Index is done away with.