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With the rapid development of the modern Factory System has arisen the need for regulations which would Tho modern

not have had application at a time when Pactory Sys- production was carried on with little, if any,

industrial organization. The extent to which by the aid of machinery the specialisation of labour is now carried, generally involves the passing of an article through as many hands or machines as there are processes in its production, and renders a further extension of routine and registration necessary. When artisans performed in their own dwellings and with their own hands, unassisted by steam or other motive power, all the operations necessary to the production of a complete article, the need for the regulation by statute of the periods and conditions of employment was not very obvious, whilst the most simple form of accountancy sufficed to ascertain the cost of an article thus produced.


The establishment of large factories, however, where numbers of persons of both sexes co-operate through the division of labour in the production of articles of consumption, has changed the industrial conditions of society.

Under these altered conditions employers find it economical to adopt methods of supervision and of registration which, prima facie, make production more costly. The advantages, however, of the combination of labour--of each workman confining himself to one process, and that always the one for which he is best fitted-are so great that the expenses of the necessary organization are insignificant in comparison. Experience has shown that wherever the magnitude of the operations renders it practicable, every further extension of this principle of specialisation results, in spite of the increased expense of administration, in an economic advantage.

The legislation of recent years with regard to factories and workshops, regulating the employment of children and women and their hours of labour, as well as providing for their health, education, and safety, affords but one of the many indications of the universality and complexity of the methods of organized production which now obtain. Although this change in our industrial arrangements has already been fraught with many far-reaching consequences both material and moral, it has been of comparatively recent growth. “In the course of little more than a century the industrial

framework of the whole civilised world has The Factory System : its been radically reconstructed, and more history.

changes have occurred in consequence, even more obvious and tangible changes-changes con

spicuous upon the very face and features of the country itself—than for certainly the whole of a previous thirteen hundred years." But it is only quite recently that any endeavour has been made to trace the continuity of “the various impulses, historical and economical, that have been concerned in the evolution of this particular method of production."*

Under these circumstances it is not perhaps surprising that systems of regulating the intricate affairs pertaining to a factory have hitherto been determined entirely by empirical methods.

Although the term Factory Accounts may be familiar, and its meaning sufficiently evident to persons acMisconcep- quainted with manufacturing business, or

experienced in any operations requiring

records to be kept of materials, plant, and stock, yet it is not infrequently assumed, even by accountants, that the ordinary commercial method of book-keeping by double entry, supplemented by the special subsidiary books which every trade demands,

suffices for every kind of business. The principles of fundamental principles applicable to accounts and particu. necessarily hold good throughout all the lar trades. branches of book-keeping; but many businesses involve, in addition to the mercantile transactions familiar to every one acquainted with the routine of an office or counting-house, multifarious and often extensive operations, of which the employment of labour

tion as to factory books.


* “Introduction to a History of the Factory System,” by R. Whately Cooke Taylor. London: Bentley. 1886.

+ Thus, The Accountant, in reviewing an earlier edition of this work, said: " It is rather concerned with the wages and time books, stock books, and matters of a similar nature, which as a rule do not come within the scope of an accountant's duties."

ments of a

and payment of wages, the purchase of raw materials and their conversion into manufactured commodities, are but some of the outward manifestations; and for their proper registration special methods of bookRequire

keeping have to be devised. In the case of

manufacturing firms, the operations referred manufacturing business. to call for careful analyses of expenditure, and sometimes necessitate the storage of large quantities of various kinds of raw material, and the warehousing of goods to a considerable extent, as well as the manufacture, purchase, or erection, and gradual wearing out, of valuable plant and tools. All this implies accurate adjustments of accounts. When large sums are paid in wages, it is essential, if the business is to be economically conducted, that the time during which the workpeople are employed and the work upon which they are engaged, should be accurately and sufficiently recorded. It is equally important that the material should be systematically charged to the work Profit or loss on which it is used. It is only by these on individual

means that employers can know the cost in transacton.. wages and material of any article of their manufacture, and be able to determine accurately and scientifically, not merely approximately and by haphazard, the actual profit they make or loss they sustain, not only on the aggregate transactions during a given period, but also upon each individual transaction. In a business, the operations of which vary widely in character, this special knowledge as to the pecuniary result of a particular piece of work is of paramount importance, for it is not only conceivable but very probable that the presence or absence of this information may determine the policy to be pursued in accepting or rejecting large

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