Image provided by: University of Nebraska-Lincoln Libraries, Lincoln, NE
About The commoner. (Lincoln, Neb.) 1901-1923 | View Entire Issue (May 30, 1913)
' VOLUME 13, NUMBER n
Entered fit tlio PoHtotllco at Lincoln, Nebraska,
na Bucond-clttHB matter.
William J. Hiivam
lliaiiAiti U. Mmv.AWK
ClIAm,KS W. IlllYAH
Kdllnrlnl Rooms and Tluslncm
onicc, 324330 Hon th 12th Street
One Yenr $1.00
Nix Monthn HO
In Clubo of Flvo or
more, por year.. .73
Three lUonthn 25
Single Copy 05
Sample Coplco Free.
Foreign Post. 52c Extra.
SlJIlSCliii-TiONS can bo sent direct to Tho Com
moner. They can also bo sent through newspapers
which have advertised a clubbing rate, or through
local agents, whero sub-agents havo been ap
pointed. All remittances should bo sent by post
ofllco money order, express order, or by bank draft
on New York or Chicago. Do not send Individual
checks, stamps or money.
UMM3WAI.S Tho date on your wrapper shows
tho time to which your subscription Is paid. Thus
January 31, '13 means that payment has been re
ceived to and Including the last issue of January,
J013. Two weeks aro required after money has
been received beforo tho date on wrapper can bo
OIIANGI3 OF A DDIIRSS Subscribers requesting
a change of address must glvo old as veil as new
AnvuiiTlsiNG Rates will bo furnished upon
Address all "ommunicatlons to
THE COMMONER, Lincoln, Neb.
freo and clour. Ho has no personal notes out
, standing. During the year he has spent $25,000
cash In putting an addition on his store. Ho
ronta his dwelling, paying a rental of $1,200
"How much income tax does he havo to pay?
"First, as to his business, ho will be liable only
for a tax on tho not income, and this he will
calculato vory much as ho would do for himself
if there woro no income tax. That is, he will
deduct necessary expenses incurred in carrying
on tho business, interest accrued and payable
during tho year on indebtedness, all taxes (ex
cepting, of course, tho income tax) for the year,
losses from fire or other accidont not covered by
insurance, bad debts written off tho books a
reasonable allowanco for wear and tear in his
store, but no additional allowanco for restoring
ouch wear and tear, and no allowance for per
manent improvements made to increase the value
of his property.
"Ho finds that his business expenses for the
year were $74,000; his indebtedness on the
mortgage Is $2,500; all losses were covered by
insurance; bad debts were $500; wear and tear
amounted to $1,000; taxes were another $1,000.
From the gross income from his dry goods busi
ness, then, tho law allows him to deduct the sum
of these amounts, or $79,000.
"Tho rent which he receives from the two
apartment houses comes from twenty tenants,
each of whom pays $1,000 a year. The tax on
this part of his income can not be held by tho
tenants for payment at source, since they would
be required to withhold it only in case each
paid more than $4,000 a year. He mustthere
fore, state this income from rents in his re
turn and pay tho tax thereon himself.
As to the dividends, his income from the first
corporation is $500; from the second and
from the third $25. Corporations are subject
to the normal income tax of one per cent on
their net incomes, and since none of these sums,
nor all of 'them 'together, exceed tho normal in
come limit of $20,000 for individuals, Mr A --
personally does not have to pay any income tax
on this part of his income. It is paid for him
at ,5J ra,tQ of ,one por CQnt y UlQ corporation.
The law gives Mr. A , as a taxable per
son, an exemption on $4,000.
, "H,e Isof courso entitled to make no reduc
tion for the rent of $1,200 that he pays for his
dwelling, or for household expenses.
ut "To-?llm up tho income personally taxable to
him; Mr A-- would hftVe a net Dusi j
' Sme5i nnX'00T.froml8 a?artmt houses; in
t all, $41,000. From this, bo will deduct tho
amount of his exemption, namely, $4,000 leav
ing $37,000 as his net income subject to tax. On
h9n Sn Mi f tUiS !Um (that ,s e st
t $2Q,000, less the exemption), he will have to
2n Jno per cent or ?!60. On the remaining
$17,000 he will have' to pay an additional ono
per cent making two per cent or $340. His total
income tax will thus be $500." El Paso (Tex )
Are $300,000,000 Worth Saving?
The Opportunity and the Work Done by the Economy and
Efficiency Commission at Washington
By R. E. Coulson, in "System," tho magazine
of business. Reproduced through the courtesy
of tho publishers of "System."
Every business man knows that in the long
run ho must get back at least one dollar for
every ninety cents he pays out, or shut up shop.
Yet in tho federal government, the biggest enter
prise in the United States, which spends a bil
lion dollars annually, there is no such direct re
lation between expenditure and returns.
Every manager knows that the chief spur to
efficiency to industry to time and labor-saving
is competition. Wastes tend to grow with
monopoly, as the necessity for strict economy
disappears, unless there is corresponding effort
to check and control these wastes. In the big
gest business in America an absolute monopoly
there has been no such incentive and few such
Every employer knows that uncertainty of
tenure kills initiative and weakens the adminis
tration of departments. New heads lack the
detail knowledge necessary to suggest improve
ments in methods; subordinates lack the author
ity or the urge to make betterments. With
shifting executives and a stationary force, the
only safeguard against inefficiency is the work
ing out of standard, straight-line methods for
handling routine. For lack of such standard
methods, our government departments waste,
perhaps, $300,000,000 every year.
The commission on economy and efficiency had
only started this work of analysis and standardi
zation when its appropriation was cut, its activi
ties discouraged. Some of the extravagances it
found and prescribed correctives for are listed
here, and in articles to follow. That its work
should be abandoned and the reorganization of
the government's business be halted now would
be a serious and costly mistake. To congress
and to all readers of System, we commend the
commission's purpose and urge continuance of
its important work.
Typical of the work performed by the com
mission and the possibilities of other work which
it may do, is its study made of the methods of
handling correspondence. "While a general in
quiry pertaining to the organization and work
was necessary to an intelligent consideration of
details," the commission explains, in its report,
the ultimate purpose of the investigation was
to recommend changes in business method and
technique that would result in increased effi
ciency or savings. The commission haB taken
the same point of view on the government work
that any business man would take on his own
organization." Its methods of approach, there
fore, besides their intrinsic Interest, have an
application in th0 average office.
.nf Je?ru5?7' 1911' a circular form was sub
mitted to the various administrative divisions
designed to bring out complete inf ormation about
existing methods of handling and filing corres
pondence. This was chosen as the first point of
attack because the operations are common to all
departments and the conditions, in many re
spects, aro tho same. y
Detailed questions in regard to the processes
employed in handling correspondence Terl
grouped under the following headings
A. Receiving and Opening.
C. Recording and Indexing.
D. Distributing. ,
Outgoing Correspondence: "V
E. Preparing. '
G. Recording and Indexing.
J. Filing incoming letters and copies of out
The answers to these questions give a df n-
and relatively accurate picture of office methods
In the service, so far as handling correspondent
is concerned. As a result of this inquuiry and a
study of tho methods of private ennomio ?i,
commission issued, in February ?K 3 S' the
liminary report Presenting thTfesuYts 'and set
ting forth the principles which, they bellow
should govern tho handling and filing of rnr
respondence. The commission dealt, of romT
with tremendous totals. Tho departments in
Washington receive annually 43,000,000 com
munications and dispatch 22,000,000, makln?
a total of 65,000,000 communications handled
each year. Yet much of the constructive criti
cism and suggestion offered in tho report an.
plies as well to the average large or small busi
ness. In dealing with filing problems, for instance
the commission's recommendations recognize the
difficulty of devising a system whoso details
satisfy all conditions, and the necessity of adapt
ing the system to the needs of each particular
office. Its analysis of the principles of filing
and the things to be considered in developing a
system are fundamental:
(a) Certainty of obtaining a particular paper
or all the papers relating to a particular subject.
This certainty to be independent of tho time
elapsed since filing of the papers.
(b) Rapidity of obtaining a particular paper
or group of papers. This rapidity to be only
slightly affected by the time which has elapsed
(c) Rapidity with which documents may be
(d) Cheapness of operation.
(f ) Reduction to a minimum of the space re
quired. (g) Miscellaneous requirements and desir
able features, such as cross references, number
ing, and so on.
In this preliminary investigation, the commis
sion made very practical recommendations. Cor
respondence in many offices was found folded
twice the long way and filed in document files
with tho contents "briefied" on the backs.
Vertical fiat filing the practice almost uni
versal in business was the first recommenda
tion. This automatically would do away with
briefing and make a saving of no less than $90,
000 in clerk hire. In a vertical file, any letter
would be as accessible, and its contents as easily
grasped at a glance, as though its contents had
been briefed on a jacket.
Of the two hundred and. fifty filing systems
studied in the various departments the commis
sion found few where the classifications were
either logical or scientific. The usual method
seemed to be a numerical finding system, which
requires an extended numerical sequence, each
new file receiving the number following the last.
This has the advantage of allowing additions
only at the end of the file, but it fails to render
the files self-classifying. Subsidiary records
a book or more often a card .index have to he
used. Since papers on the same subject aro
widely separated, the danger of burying im
portant papers leads to laborious and expensive
The commission advocates the application of
the card-index principle to the filing of letters.
In other words, the letters themselves should be
sectionalized and classified. The adoption of a
subjective classification of correspondence,
based on the Dewey decimal system of library
classification, is also proposed. This has been
largely adopted in private business in the last
After a thorough investigation, it was recom
mended that all correspondence, 'incoming ani
outgoing, should he filed upon a. subject classi
fication arranged as nearly as possible on a selr
indexing basis. When numbers for each file
were essential, it was recommended that a deci
mal system be employed. The proposed system
is very flexible and can be adapted to varied
subjects. The classification numbers tell of each
letter or file of correspondence both what it 13
and where It is, New topics arising can be close
ly related to existing heads merely by adding a
decimal place. All papers on one subject aTO
kept together and are preceded and followed oy
"No book or card record of Incoming or out
going correspondence should be made except
where absolutely essential, and all bound-boos
registers of correspondence received and sent
Powered by Open ONI