METAPHYSICAL ELEMENT IN STATISTICS. 



117 



creditors of the same customers after they have become bawkrnpt, and to have balance 

 sheets of their estates put before them prepared by other hands. The difference betvpeen 

 the balance sheets of the same estate under these different conditions is often remarkable 

 enough. Let me give a specimen of scores of such as every banker has had cognizance of. 

 A man of business applies for a banking credit for his firm and submits a statement 

 of its affairs as follows : — 



BALANCE SHEET 01'' A., B., C. & CO., 31st DECEMBER, 1886. 



Assets. 



Stock in trade £ 35,-50 



Book debts 25,700 



Bills receivable 16,700 



Cash in bank 3,500 



Factorj' and ^Tound 65,000 



Machinery and plant 31,500 



Private property of partners 8,000 



£185,650 



£185,650 



Liabiliiies. 



Bills payable for merchandise £ 65,020 



Open accounts 7,550 



Due to bank 10,750 



Sundry other accounts 3,750 



Mortgage on factory and machinery . 35,000 



Do private property 3,000 



£125,070 

 Surplus 60,580 



£185,650 



Here is a balance to the good of =£60,000 ; a very fair foundation for credit, as will 

 readily be admitted. But, a few mouths afterwards, something happens, and the firm 

 stops payment. They apply now, not for credit, but for a composition of their debts. 

 The statement they submit has some striking points of difference as compared with the 

 other. There has been little or no change in the real position, but there is a striking 

 change in some of the figures : — 



BALANCE SHEET OF SUSPENDED FIRM OF A., B., C. & Co., AS PREPARED BY 

 X., Y., Z. & CO., ACCOUNTANTS, 



Assets. 



Stock in trade, actual worth 10s. in £.. £ 17,000 

 Book debts, amount collectable at 



(is. 8d. in the £ net 9,000 



(Amount formerly given included 

 overdrawn accounts of partners.) 



Bills receivable, value 13,000 



Cash in bank 150 



Factory property.including machinery 

 and plant, real value in present 



condition of trade 30,000 



(Private property of partners never 

 ought to liave been brought in, 

 being all subject to marriage .set- 

 tlements.) 



Total Assets £ 69,150 



Deduct privileged liabilities which 

 must be paid in full, such as wages, 

 salaries, etc 5,000 



Net assets £ 64,150 



Deficiency 68,100 



£132,250 



Liabitities. 



Bills payable for mercljandise £ 65,000 



Open accounts for merchandise 8,000 



Due to bank 12,7.50 



Other amounts due 3,000 



JIoTtgage on factory 35,000 



Two years unpaid interest thereon 



(not mentioned beibre) 3,500 



Liability as indorser on sundry 

 bills discounted on which there 



will be a loss of say 5,000 



Total liabilities £132,250 



