Part 12

=PIT:= The portion of the board of trade where floor trades are made. This term is particularly applied to Chicago. Other stock exchanges set aside certain places signified by posts set in the floor for trading and in these exchanges the trading points are called _posts_ instead of pits.

=POOL:= A combination of buyers who work together and invest their joint capital as one. (The different boards of trade have enacted strict rules against pooling.)

=PUT:= A privilege which one party buys of another to _put_ (deliver) to him a certain amount of stock, grain, etc., at a certain price and date.

=PUT AND CALL:= A _put_ and a _call_ may be combined in one instrument, the holder of which may either buy or sell as he chooses at a fixed price and date.

=REMARGIN:= To give more margin.

=RING:= A combination of brokers to offset and settle trades with each other; also an exclusive combination of persons for a selfish purpose as, to control the market. (Rings have the same standing in the board of trade as pooling, if of the same character.)

=SELL AT MARKET:= An order to one's broker giving authority to sell stock or grain at market price.

SELL AT OPENING: An order to sell immediately after the opening of the stock exchange at the best price obtainable.

=SELLING ORDER:= An order given to a broker to sell a certain security with or without limit as to price, as the case may be. A selling order is good for the day for which it is given only unless otherwise specified.

=SETTLEMENT:= The payment of differences in trades between brokers.

=SHORT:= One who has sold for future delivery what he does not own, but hopes to buy at a lower rate.

=SKYROCKETING:= Pushing the prices of securities up to unnatural levels or forcing the price up with startling rapidity.

=SLUMP:= A sudden and a considerable fall in prices.

=SPREAD:= A "put and call" at differing prices.

=STOP LOSS ORDER:= This is a method of limiting losses by giving a stop order to the broker to sell if stock declines below a certain point. These are sometimes called _stock orders_.

=STRADDLE:= A "put and a call."

=SWEETEN:= To give more collateral or margin.

=TICKER:= A small printing machine operated by telegraph by which the outside world obtains the reliable information as to the prices of securities and commodities dealt in upon the principal exchanges of the world. It is a never failing source of information to the broker. The results are printed on a strip of paper like a ribbon which automatically unwinds and after passing under the printing device runs into a basket. The ribbon is called the _tape_. All fluctuations in prices are thus wired to the principal exchanges immediately.

=WASH SALE:= An illegitimate or fictitious transaction.

BILLING AND ORDER RECORDING[5]

=Introduction.= The survival of the fittest applies most forcefully to business men and their methods. The success of the men depends upon their methods; the efficiency of the methods, upon the men. Large corporations of to-day would be impossible without method. They plan their work, and method tells them daily whether they are working their plan successfully or unsuccessfully.

Footnote 5:

_Copyright, 1909, by American School of Correspondence._

It is commonly supposed by the smaller business men that method is a result of business growth. Sometimes it is. If a business grows fast, better methods become a necessity. Without method any business must remain small—with few exceptions, just as small as the capacity of the man at the helm. "To the extent which system is intelligently used, it multiplies one's powers of achievement in all directions."

The importance of the order billing and shipping departments, the amount of waste effort therein, and the relation of each to all other branches of the business, make them a most interesting and profitable study for the progressive business student, whether he be a beginner, an executive, or an owner. To attain quick results and to eliminate useless head, hand, and leg work, learn the capacity, capability, and usefulness of office machinery and the short-cut methods made possible thereby.

During the last eight years there has been a tremendous amount of improvement made both in this country and abroad in handling office work, changing from hand to machine methods. Most of these improvements have been literally forced upon the business men of the country by specialty companies having labor-saving devices for sale. Wide-awake merchants have in some cases left the installation of such devices to office people who feared the loss of their positions through the use of them.

One of the pioneers in the development of the class of work above mentioned is Hiram J. Halle, who overcame all obstacles, and gave the impetus to modern billing methods which has been such a help to our economic results in office practice. The typewriter companies have followed his lead and equipped cylinder machines with the necessary attachments for accomplishing almost any desired result, except writing in a bound book. In order to overcome this obstacle, the McMillan and the Empire and some other loose-leaf books have been invented. These books are loose-leaf only while they are being written upon; after completion they are permanently bound by a simple device, and become as secure as a sewed book.

In any book of this character, the student must consider the text as a series of problems, with explanations of how each has been solved. If the student does not learn to exercise his own powers of originality as a result of a study of this volume, he will fail to secure the result intended. Rarely, if ever, will two problems be met in two commercial establishments which will be alike. The judgment of the person installing the system will determine the best method to be used under certain conditions.

Before starting in on the regular work, it will not be out of place to give a comparison of the methods of business in various foreign countries.

The rush in the business life of the United States is accounted for by our fast growth and national desire to accumulate wealth. Commercial concerns have grown both fast and slowly to undreamed proportions. Strenuous efforts have been made to secure business, and then a corresponding effort has been made to effect the small economies which in a large business aggregate large sums. As a nation, we are rushing at headlong speed, seeking all the means which will give us results. In transportation we advance from steam to electricity; in social life we turn from horses and carriages to automobiles; in commercial life we use every known device to short-cut the work and effect economies—adding machines, typewriters, cash registers, envelope openers, envelope sealers, multigraphs, etc.

A distinct surprise awaits the person visiting Europe on a mission of introducing "short-cut" methods. While we are in business to make all the money we can, most of the Europeans are in business to make a living, or reasonable earnings.

Imagine the surprise of the writer when told by the managing director of one of the largest department stores in London that they did not care to save the services of thirty-five clerks (which was possible by modern methods) as they were making a certain amount of money each year, and did not care to make any more; besides, they did not wish to put these people out of positions. It is not an easy matter to secure positions in England. Employes are very diligent and pay strict attention to business. A manager of one of the large banks in London said that once a clerk is hired he is discharged for gross misconduct only—not even for incompetency. There are young men clerks (pronounced _clarks_) in the Bank of England who are doing the same work for the bank as done by their grandfathers. There are old men in the Bank of England to-day who still use quill pens and the sand box instead of a blotter. There are, however, adding machines being used there by the younger generation, and they are of more use to them than to us in a way, as their currency is so much more difficult to add.

Each year, more improved methods are being introduced into England. Typewriters have been used for a number of years, and of late years adding machines have made headway. It is more difficult there to introduce new methods, but, once installed, it is difficult to dislodge them for other ones.

Some of the wholesale houses have very old methods. In one house in London, an order was copied twenty-nine times from the time it was received until it was finally charged. The concern was over two hundred years old and had never made any effort to improve its methods. It had four boys whose duty it was to hunt orders lost about the warerooms. A system of manifolding was installed, which eliminated so much waste of time in copying and recopying orders that it was difficult to convince the firm that something had not been overlooked. After four weeks they were delighted.

An American going abroad is much impressed by the deliberation of Europeans and is inclined to criticise them for it. After a time, they can point out enough Americans who have worn out at forty years of age, and are in Europe seeking health, to convince them that perhaps the Europeans are not wholly wrong.

In Germany, the railroads are controlled by the government. When one attempts to introduce short-cut methods, he is confronted by the fact that work is needed to keep busy old soldiers for whom the government has to care. In asking an agent of an American firm dealing in labor-saving devices why he did not use any of the devices, the answer was given that in Germany the young men work three years for nothing; he did not feel the necessity of doing away with any of them. At the end of three years' work in an office, a young man receives a diploma for efficiency, if he has attained it. The government exercises a strict supervision over all commercial concerns, and inspects their books at periodic intervals. Commercial failures are therefore more rare there than at home. Fraudulent schemes are dealt with severely.

There are many large firms in Germany, both jobbers and manufacturers, that are striving to be progressive. The Siemens-Halske Electric Co. are just as progressive in their order and billing methods as any American firm in the same line. To show the attention to details given by the Germans—a managing director of one of the large department stores in Berlin, when asked how long he had lived in the United States, said he had never been there. Upon being complimented upon his American accent, he replied that when talking to an American he always used the American accent, slang, intonation, etc., and when talking to an Englishman he changed his accent, etc., to correspond. He had all the American devices in his accounting department which one would find in any department store in the United States, and sent out monthly typewritten bills the same as John Wanamaker, Altman, and others of New York, and the same as all large department stores do in all American cities.

In France, the commercial houses are very conservative and are subject to the same government supervision as practiced in Germany. In one of the railroad companies, the Chemin de fer du Nord, they use the manibill system of billing (whereby each shipment is billed separately and manifolded on a form of seven sheets) which is the shortest form of billing known, but which has never been adopted by American railroads on account of the bulk of papers increasing too rapidly. The present American method is to put several shipments on a way bill for shipments to any given town, and when the goods arrive at the given town, the receiving stations make out separate freight bills for each shipment, copying the information from the blanket way bill made out at the forwarding station. Some of the American railroads are now adopting the special roll machine for car accountants' work, as shown in Fig. 1.

The French people do not, as a rule, form large companies like the Americans and Germans and English. There are a large number of small manufacturers and jobbers in France. The large department stores, like the Louvre, in Paris, are run on a strictly cash basis.

MACHINES FOR MANIFOLDING

Neither the billing machines (book-writing machines) nor typewriters were originally intended for heavy manifolding work. The flat-bed billing machines were originally invented to write in books used for court records, sales books, etc. The book was to remain stationary and the machine was to travel over the books. The flat-bed machines are the only machines made for writing in bound books—the latter are being gradually replaced by loose-leaf books. A flat-bed machine for bound books is shown in Fig. 2.

The typewriter was originally intended to write on one sheet of paper only. If extra copies were needed, a copying ribbon was used, and a wet copy taken in a letter-press book. In the evolution from bound books (official record and commercial) to loose sheets, the book typewriter was equipped with devices for holding loose sheets of paper—used alone or in connection with books. In the evolution from letter-press copies to carbon copies, the typewriter was equipped with hard-rubber and brass platens for taking from one to twenty-five copies, and in some cases even more, with extremely thin paper and carbon paper.

The flat-bed billing machines are equipped with heavier type-bar springs than the cylinder machines. The operator in depressing the keys overcomes the additional resistance to the touch, due to the heavier type-bar springs, and strikes a heavy blow on the paper, making a good manifold copy in all cases. The operator on a cylinder billing machine strikes a heavier blow than usual to secure the heavy manifolding results. The heavier the blow, the clearer the result on a billing machine. The Underwood billing machine is shown in Fig. 3.

All typewriters equipped with special attachments for holding the sales sheets, invoices, and orders are called _cylinder billing machines_. The paper upon which the machine writes is held by, and passes over and around, a round rubber roll, the cylinder.

This is in contrast to the flat-bed billing machines (or book typewriters) on which the paper lies flat on a rubber plate while the machine moves over the paper.

=Development of Billing Machines.= This text has been prepared by taking the simplest forms of billing and order work, and leading up gradually to the more complicated forms. This is actually what took place in the improvement of office and factory work.

A bill and a copy were first made—an extra sheet was made for some additional purpose. The advantages of doing two or three things at once led to further investigation. This resulted in still additional sheets being used for other purposes. Every time an additional sheet was added, the labor of typewriting that sheet separately was eliminated.

Gradually it developed that it would be useful to copy a part only of the typewritten information on some of the under sheets. Means were found for accomplishing this. For instance, on an order form, it was desirable to have the prices show on the office copy, but not on the copy which was intended for the warehouse or factory.

In some cases it was desirable to write all the information on the top copies and split up the information thereon on the sheets underneath. The final development of all the above ideas is embodied in the compound form, in which all sheets for the office, customer, warehouse, factory, shipping room, and loading platform are typewritten at one operation, and the invoice and duplicate finished as a separate operation.

Wholesale and manufacturing lines are used mostly in this text to illustrate the evolution and improvement of billing and order work. Some of the conditions which have to be considered in installing office systems are as follows:

Whether the orders are received from customers or salesmen or both, and which are in the majority.

Whether the goods are carried in stock or manufactured or bought outside, or all of these.

Whether the orders can be filled completely, or nearly so.

Whether or not the factory may know the prices.

Whether the goods are shipped by freight, mail, express, or all of these.

Whether copies of the bills have to be made for any other purpose.

Whether a copy of the sales sheet has to be sent to the home office, or made for any department.

If additional copies of either are necessary, what colors to use for readily distinguishing them.

How many ledger clerks, and how to sort their work to the best advantage so that each clerk handles his work only.

How to file office and factory copies for quick reference.

How to plan all the above so that improper filing of sheets does not destroy the chain of record.

The reasons for these considerations will be better appreciated after further progress is made.

If the business student learns the capabilities of office machinery, the advantage of manifolding, the use of colored papers, and the important feature of correctly grouping statistics (which is almost an art in itself), he will have accomplished much. He should learn also to develop his own power of originality and suggestion.

The natural order in which order billing and shipping ought to be presented is the way in which the transactions occur. Methods of billing (making out invoices) in many businesses govern the manner in which the orders are made up, and therefore will be considered first.

In order to more clearly bring out the advantages of new methods, it is deemed advisable to consider old-style methods and contrast them with the newer ideas. By showing the weak points in the older methods and why the new are better, the gradual evolution and improvements can be traced.

=Old-Style Method of Billing and Making Wet Copy in Tissue Book.= There are enough firms who still follow this plan of billing to resent the term "old-style." The best that can be said for this plan is that it is shorter than writing the bill-and-sales book, or sales journal, separately. The wet copy takes the place of rewriting the bill. One objection to this method of copying bills is that if all the bills are copied some of them are either blurred or are too light when the copy has dried on the tissue leaf. This is a difficulty which can be corrected by careful attention.

The worst feature is that one never knows whether all the bills have been copied, and there is no way of knowing this unless the copies in the tissue book are checked back with the orders from which the bills were made. Many firms spend thousands of dollars in advertising, traveling expense, labor, etc., ship out and bill large invoices of goods, "double check" the invoices, and leave the copying of the invoices in tissue books to a young office boy. They never think to check back the invoices with the orders to be absolutely certain that the goods have been _charged_ as well as invoiced (billed out).

If one should ask them how they know that all invoices are charged (or copied into the tissue books) the invariable answer would be, "Oh! we never lose any bills before they are copied." Ask them how they know none are lost and, after thinking a while, they will admit that they really do not know _for sure_. They begin to check back the tissue book after some customer brings in a bill for payment which has never been copied into the tissue book, and hence has not been posted to the customer's account.

Fig. 4 shows the old-style cloth bath, Fig. 5 the old-style copy press, and Fig. 6 the old-style sales book (tissue paper leaves).

LOOSE-LEAF SALES SHEETS AND INVOICES

This style of billing was the first variation from the plan of using copying ink, or pencil, on invoices and then transferring the ink to tissue paper books, by wetting the leaves with water and then absorbing the surplus water with paper blotters. Or this was done by placing damp cloths on the under side of the leaf and covering it with a leaf, placing the invoice downward on the tissue leaf, closing the book, and placing it in a copying press. The ink from the invoice was sufficiently transferred to the tissue paper to make an impression thereon.

If the person who did the copying did not use due care, the paper would be too wet and the ink would run and blur the copy and the invoice. If two invoices were accidently picked up by the person copying, the top invoice would not be copied on the tissue sheet. This is a most serious objection, for the reason that the copy in the tissue was used as record of the invoice for the purpose of posting into the ledger.

Another difficulty was the usual one experienced through the use of bound books in office work. Only one person can use a book at one time. If Fayette Henry, the accountant, was using the tissue-copy book, and Dave Pike, the order clerk, wanted to use it to see if all invoices had been copied by the office boy, he had to wait on Fayette Henry. The loose-leaf sales sheet shown in Fig. 7, with the pages serially numbered and placed in proper binders after each sheet has been filed, overcomes all of the difficulties mentioned—with many additional benefits.

The loose-leaf sales sheet and invoice were first used with the flat-bed billing machine, the sales sheet being held in position by being placed over studs (round metal posts), which fitted into the punched holes in the edge of the paper. These punched holes were used ultimately for fitting over the metal binder posts in the loose-leaf binders. The invoices were wider than the regular-size invoice and were perforated about 1 inch or 1½ inches from the left side, as shown in Fig. 8. To the left of the perforated edge were two small holes about 2¾ inches apart, which fitted over two small studs on a sliding bill-holder device. This plan provided a means of holding the large sheet and invoice in proper relation to each other. A piece of carbon paper the same size as the sales sheet was placed between the invoice and the sales sheet. This ruling of the sales sheet is shown in Fig. 9.

When an invoice was written on the billing machine, it was manifolded on the sales sheet beneath. When the invoice was finished it was ready to mail—no delay in copying invoices, no blurred invoices through careless copying. No fading of the manifolded copy where black carbon paper was used. Inks are not made of indestructible carbons as black carbon paper is made. A condensed billing or invoicing loose-leaf sales book for this purpose is shown in Fig. 10.

The following are some of the many good features of the condensed system, as it is in use to-day, briefly stated:

Bill and entry in sales book are obtained at one operation.

Entries upon sales book agree absolutely with bill rendered.

The bill clerk becomes bill and entry clerk combined.