OPERATIONS IDENTIFIED BY SYMBOLS.

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most important pieces first. Between each group we "gap" the numbers.

Regarding position in naming pieces, we assume a front to the machine (where the operator is most likely to be placed), and define direction tersely as "forward," "back," "right," "left," "down," "up." The adjectives of position prefixed to piece names are, of course, derived from these words, as "upper," "lower," &c. A perpendicular row of similar pieces, say five, would be rated upper, second, third, fourth, and lower. A number of different-sized pieces of similar name may, in like manner, be prefixed smallest, second, third, &c.

Before closing, a brief reference to certain (two) supplementary symbols may not be out of place. One is a small letter after a piece symbol (as FPL-21-a), signifying that the piece is obsolete, the standard FPL-21 having been altered.* After a second alteration, the last obsolete piece would be suffixed "b," and so on. Thus duplicate pieces of old-style machines can be identified and supplied to customers. The other symbol referred to is to indicate the number of the operation in the construction of a piece, and is written thus: FPL-21-1st, FPL-21-2nd, &c. Its use is of great value on detail drawings, time cards, and cost cards. It enables any operation (no matter how trivial) on any piece of any machine to be identified by a symbol alone. An operation we define as any work which is done by one person at one time, before passing the piece along and commencing upon another.

* In a letter to the authors, Mr. Oberlin Smith writes: "I have not yet changed the system in my own practice, and do not see anything which I think it desirable to change except the first supplementary symbol mentioned in the first part of the last paragraph. The principle there mentioned is not strictly logical, as it gives the same symbol to a piece in present use which in a previous year was given to a somewhat different one now obsolete. This matter I intend to modify somewhat, but have not yet had time to do so."

APPENDIX B.

THE INCOME-TAX ACTS

IN THEIR BEARING UPON THE PROFITS OF MANUFACTURE.

THE Income Tax is, as is well known, assessed by boards of local commissioners in conjunction with Government officials, known as "Surveyors of Taxes," according to the provisions of a series of Acts of Parliament. In case of overcharge the most convenient course is to communicate or obtain an interview with the Surveyor of Taxes as early as possible, but as the language of the Acts is very precise, there is little discretion left to those who administer them. We have therefore thought it convenient to reproduce here the exact words of the more important provisions. The chief Acts are-5 and 6 Vict. c. 35, 16 and 17 Vict. c. 34, 32 and 33 Vict. c. 67, and 43 and 44 Vict. c. 19, but there are many others.

By the Act of 5 and 6 Vict. cap. 35 (1842) the several properties, profits, and gains in respect of which duties shall be assessed and charged are classified under five schedules, known respectively as A, B, C, D, and E.

Schedule A, commonly called the Landlord's or Property Tax, prescribes the rules as to the assessment of income from lands, tenements, and hereditaments. It is levied on the occupier, but is by him recoverable from the landlord.

Schedule B prescribes the rules as to the assessment of income in respect of occupation of land, or of house property if occupied as part of a farm.

Schedule C deals with incomes arising from annuities and dividends payable out of any public revenues.

Schedule D we describe in greater detail after Schedule E, which deals with incomes derived from all public offices and employments of profit.

The schedule with which we are here chiefly concerned is Schedule D, under which duties shall be charged for and in respect of the annual profits or gains arising or accruing to any person residing in the United Kingdom from any kind of property whatever, whether situate in the United Kingdom or elsewhere, or from any profession, trade, employment, or vocation, whether the same shall be respectively carried on in the United Kingdom or elsewhere. And for and in respect of the annual profits or gains arising or accruing to any person whatever, whether a subject of her Majesty or not, although not resident within the United Kingdom, from any property whatever in the United Kingdom, or any profession, trade, employment, or vocation exercised within the United Kingdom, and to be charged for every twenty shillings of the annual amount of such profits and gains. In ascertaining the profits of any person chargeable under Schedule D, it shall be lawful to estimate the value of all doubtful debts due or owing to such person; and in the case of the bankruptcy or insolvency of the debtor, the amount of the dividend which may reasonably be expected to be received on any such debt shall be deemed to be the value thereof, and the duty chargeable under the said schedule shall be assessed and charged upon the estimated value of all such doubtful debts accordingly (16 and 17 Vict. cap. 34, sec. 50).

The Rules under which the said duties shall be assessed and charged are contained in the Act of 5 and 6 Vict. cap. 35, andso far as they concern profits of manufacture, are :—

Full Profits on average of last Three Years.

(a.) The duty to be charged shall be computed on a sum not less than the full amount of the balance and profits or gains of any trade, manufacture, adventure, or concern upon a fair and just average of three years, ending on such day of the year immediately preceding the year of assessment on which the accounts of the said trade, &c., shall have been usually made up, or on the fifth day of April preceding the year of assessment, and shall be assessed, charged, and paid without other deduction than is hereinafter mentioned as allowed: Provided always, that in cases where the trade, &c., shall have been set up and commenced within the said period of three years, the computation shall be made for one year on the average of the balance of the profits and gains from the

period of first setting up the same: Provided also, that in cases where the trade, &c., shall have been set up and commenced within the year of assessment, the computation shall be made according to the best knowledge and belief of the person to be assessed (5 and 6 Vict. cap. 35, sec. 100).

On all Persons, Companies, and Occupations.

(b.) The said duty shall extend to every person, body politic or corporate, fraternity, fellowship, company, or society, and to every art, mystery, adventure, or concern carried on by them respectively, in Great Britain or elsewhere.

Deductions allowed from Gross Profits.

(c.) In estimating the balance of profits and gains chargeable under Schedule D, or for the purpose of assessing the duty thereon, no sum shall be set against or deducted from, or allowed to be set against, or deducted from, such profits or gains on account of any sum expended for repairs of premises occupied for the purpose of such trade, &c., nor for any sum expended for the supply or repairs or alterations of any implements, utensils, or articles employed for the purpose of such trade, &c., beyond the sum usually expended for such purposes according to an average of three years preceding the year in which such assessment shall be made; nor on account of loss not connected with or arising out of such trade, &c.; nor on account of any capital withdrawn therefrom; nor for any sum employed or intended to be employed as capital in such trade, &c.; nor for any capital employed in improvement of premises occupied for the purposes of such trade, &c.; nor on account or under pretence of any interest which might have been made on such sums if laid out at interest; nor for any debts, except bad debts proved to be such to the satisfaction of the Commissioners respectively; nor for any average loss beyond the actual amount of loss after adjustment; nor for any sum recoverable under an insurance or contract of indemnity.

DEPRECIATION.

Interest to be included.

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(d.) No deduction shall be made on account of any annual interest, or any annuity or other annual payment, payable out of such profits or gains.

None but Trade Deductions allowed.

(e.) No sum shall be set against or deducted from, or allowed to be set against or deducted from, such profits or gains for any disbursements or expenses whatever, not being money wholly and exclusively laid out or expended for the purposes of such trade, &c.

It follows from these stringent provisions that the common practice of deducting from the gross profits of a concern, an equivalent for the current interest on the capital employed, or an allowance for the remuneration of the working partners, or any annual payment to the representatives of deceased partners, is totally inadmissible for the purpose of Income Tax assessment. Questions will also often arise as to improvements made out of profits, enlargement of premises, purchase of improved machinery, or extra advertising for future advantage. Expenditure under these heads will be liable to be considered as capital outlay, not allowed to be deducted, especially if it is entered and shown separately from the ordinary current outgoings of the business.

Depreciation.

An improvement in the management of the tax as to deductions for depreciation of plant and machinery was introduced in 1878. The provision is as follows:

That the Commissioners shall, in assessing the profits or gains of any trade, &c., chargeable under Schedule D, or the profits of any concern chargeable by reference to the rules of that schedule, allow such deduction as they may think just and reasonable, as representing the diminished value, by reason of wear and tear during the year, of any machinery or plant used for the purposes of the concern and belonging to the person or company by whom the concern is carried on; and for the purpose of this provision, where machinery or plant is let to the person or company by whom the concern is carried on upon such terms that the person

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