data which has been recorded in words upon the daily time slip. After the cards have been punched they are sorted into groups according to rates of pay, and then according to time employed. The sorting is simply done by grouping together all cards which have uniform punch marks in the sections referred to (rate of pay and time), needles being thrust through the appropriate holes as the cards stand stacked in order to see that all are punched in the same area. If they are so punched, they belong to the same group, while if others not so punched have been included, the needles will not pass through completely, and it is necessary to withdraw certain cards, which have erroneously been thrown into this group.

The work thus done gives a money classification, and practice has shown that the results correspond to within $100 per month with the results shown by the pay-roll, the latter amounting to about $58,000 monthly.* It would be possible to make the system register to a cent by going sufficiently into detail, but this has not been thought necessary. The next operation is to sort the cards by fields and classes of work. The processes are simply those of sorting and adding after the manner already indicated, but for the purpose of obtaining different groupings or classifications. These groupings and classifications have been designed to show the head of the Census Bureau exactly where the money that has been paid out has gone that is to say, for what specific objects it has been expended. In order to give these data, tabular forms showing the seven classes already referred to (supervisory, statistical, publishing, field work, stenography and typewriting, miscellaneous clerical, and labor with an eighth "administrative") have been ruled. After the cards have been separated into groups according to these main classes of work,

*This figure applies to the expenses of the bureau in "ordinary" years, that is, years when the regular decennial census is not in progress. When the decennial census is going on, the outlay is much larger.

all those belonging in the various sub-classifications being of course grouped under the main head to which they belong, they are totaled by the usual statistical methods, and the results are recorded, under the headings described, as "Table 1," on which are shown the corresponding results for the similar month of the preceding year. "Table 1A" has the same headings, but is represented in percentages for the purpose of showing the relationship between the different groups of work. "Table 2" has the same headings, but is limited to the "cost of inquiries in progress, by specified classes of work." "Table 2A" shows under the same headings as before the per cent which the cost of inquiries in progress by specified classes of work forms of the total expenditures. "Table 3" is made out separately for each inquiry which is in progress, and shows under the familiar headings the distribution of costs upon that particular investigation. "Table 4" is limited to "productive labor," which includes all except the "administrative" and "supervisory" divisions. "Table 4A" gives under the same heads as the last the percentage which the cost of productive labor forms of total expenditures. "Table 5" is limited to "non-productive labor," which, as we have seen, includes the supervisory and administrative groupings. In making the distribution of the cost of non-productive labor, however, separate columns are provided for the director's division, chief clerk's division, disbursements and appointments division, library, and correspondence and mailing. "Table 5A" gives these same data in percentages. "Table 6" is designed to show the cost of annual leave by specified classes of work. The subdivision is here made on the original seven groups already referred to, the entries being those which relate to the leave granted the employes in each division. "Table 6A" gives the same data as "Table 6" in the form of percentages. "Table 7" gives the same grouping for the cost of sick leave by specified classes of work, and "Table 7A"

the percentage which cost of sick leave by specified classes of work forms of the total pay-roll distribution. As already stated, these tables are prepared each month, and within three days of the opening of a new month are furnished to the head of the office for study and comparison.

Effect of Changes.

The general effect of the changes in accounting method which have been discussed in the foregoing pages has been good. Both these and other innovations have operated to put the service of the Government upon a much more businesslike basis than has heretofore been characteristic, and have been merely the outward manifestation of a spirit of greater attention to detail, and desire to get results in economy and efficiency that has transformed some of the branches of the Government in an almost radical way. No one would suppose for a moment that the public service is as yet upon a basis of full efficiency, or that it could compare in quickness or economy of results with even moderately successful business houses. But enough has been done to hold out hopes of improvement in the future to those who believe in thorough and conscientious work. The ideals of the public service are not and never will be identical with those which prevail in the commercial world. The standard of payment is not the same, nor is the object of accounting and other forms of organization the same in the government department as it is in the private business. Reduction of costs of operation, uniformity of expenditure and accounting method, and proper safeguards against unusual extravagance or official peculation may reasonably be looked for. These the federal administration is now in a fair way to secure

SECTION D.

CORPORATION TAX REGULATIONS.

Regulations relating to the assessment and collection of the special excise tax imposed by Section 38, act of August 5, 1999, on corporations, joint stock companies, associations, and insurance companies.

Section 38 of the act of August 5, 1909, is as follows:

Sec. 38. That every corporation, joint stock company or association, organized for profit and having a capital stock represented by shares, and every insurance company, now or hereafter organized under the laws of the United States or of any State or Territory of the United States or under the acts of Congress applicable to Alaska or the District of Columbia, or now or hereafter organized under the laws of any foreign country and engaged in business in any State or Territory of the United States or in Alaska or in the District of Columbia, shall be subject to pay annually a special excise tax with respect to the carrying on or doing business by such corporation, joint stock company or association, or insurance company, equivalent to one per centum upon the entire net income over and above five thousand dollars received by it from all sources during such year, exclusive of amounts received by it as dividends upon stock of other corporations, joint stock companies or associations, or insurance companies, subject to the tax hereby imposed; or if organized under the laws of any foreign country, upon the amount of net income over and above five thousand dollars received by it from business transacted and capital invested within the United States and its Territories, Alaska, and the District of Columbia during such year, exclusive of amounts so received by it as dividends upon stock of other corporations, joint stock companies or associations, or insurance companies, subject to the tax hereby imposed: Provided, however, That nothing in this section contained shall apply to labor, agricultural or horticultural organizations, or to fraternal beneficiary societies, orders, or associations operating under the lodge system, and providing for the payment of life, sick, accident, and other benefits to the members of such societies, orders, or associations, and dependents of such members, nor to domestic building and loan associations, organized and operated exclusively for the mutual benefit of their members, nor to any corporation or association organized and operated exclusively for religious, charitable, or educational purposes, no part of the net income of which inures to the benefit of any private stockholder or individual.

Second. Such net income shall be ascertained by deducting from the gross amount of the income of such corporation, joint stock company or association, or insurance company, received within the year from all sources, (first) all the ordinary and necessary expenses actually paid within the year out of income in the maintenance and operation of its business and properties, including all

charges such as rentals or franchise payments, required to be made as a condition to the continued use or possession of property; (second) all losses actually sustained within the year and not compensated by insurance or otherwise, including a reasonable allowance for depreciation of property, if any, and in the case of insurance companies the sums other than dividends, paid within the year on policy and annuity contracts and the net addition, if any, required by law to be made within the year to reserve funds; (third) interest actually paid within the year on its bonded or other indebtedness to an amount of such bonded and other indebtedness not exceeding the paid-up capital stock of such corporation, joint stock company or association, or insurance company, outstanding at the close of the year, and in the case of a bank, banking association, or trust company, all interest actually paid by it within the year on deposits; (fourth) all sums paid by it within the year for taxes imposed under the authority of the United States or of any State or Territory thereof, or imposed by the government of any foreign country as a condition to carrying on business therein; (fifth) all amounts received by it within the year as dividends upon stock of other corporations, joint stock companies or associations, or insurance companies, subject to the tax hereby imposed: Provided, That in the case of a corporation, joint stock company or association, or insurance company, organized under the laws of a foreign country, such net income shall be ascertained by deducting from the gross amount of its income received within the year from business transacted and capital invested within the United States and any of its Territories, Alaska, and the District of Columbia, (first) all the ordinary and necessary expenses actually paid within the year out of earnings in the maintenance and operation of its business and property within the United States and its Territories, Alaska, and the District of Columbia, including all charges such as rentals or franchise payments required to be made as a condition to the continued use or possession of property; (second) all losses actually sustained within the year in business conducted by it within the United States or its Territories, Alaska, or the District of Columbia not compensated by insurance or otherwise, including a reasonable allowance for depreciation of property, if any, and in the case of insurance companies the sums other than dividends, paid within the year on policy and annuity contracts and the net addition, if any, required by law to be made within the year to reserve funds; (third) interest actually paid within the year on its bonded or other indebtedness to an amount of such bonded and other indebtedness, not exceeding the proportion of its paid-up capital stock outstanding at the close of the year which the gross amount of its income for the year from business transacted and capital invested within the United States and any of its Territories, Alaska, and the District of Columbia bears to the gross amount of its income derived from all sources within and without the United States; (fourth) the sums paid by it within the year for taxes imposed under the authority of the United States or of any State or Territory thereof; (fifth) all amounts received by it within the year as dividends upon stock of other corporations, joint stock companies or associations, and insurance companies, subject to the tax hereby imposed. In the case of assessment insurance companies the actual deposit of sums with State or Territorial officers, pursuant to law, as additions to guaranty or reserve funds shall be treated as being payments required by law to reserve funds.

Third. There shall be deducted from the amount of the net income of each of such corporations, joint stock companies or associations, or insurance companies, ascertained as provided in the foregoing paragraphs of this section, the sum of five thousand dollars, and said tax shall be computed upon the remainder of said net income of such corporation, joint stock company or association, or insurance company, for the year ending December thirty-first, nineteen hundred and nine, and for each calendar year thereafter; and on or