Pace Student, Vol.9 No 9, August, 1924 Pace & Pace

University of Mississippi eGrove The aP ce Student Accounting Archive 1-6-1924 Pace Student, vol.9 no 9, August, 1924 Pace & Pace Follow this and additional works at: https://egrove.olemiss.edu/acct_pace Part of the Accounting Commons, and the Taxation Commons Recommended Citation Pace & Pace, "Pace Student, vol.9 no 9, August, 1924" (1924). The Pace Student. 114. https://egrove.olemiss.edu/acct_pace/114 This Article is brought to you for free and open access by the Accounting Archive at eGrove. It has been accepted for inclusion in The aP ce Student by an authorized administrator of eGrove. For more information, please contact [email protected]. Pace Student Vol. IX New York, August, 1924 No. 9 The Relation of Arbitration to the Profession of Accountancy The American Institute of Accountants, at its convention held in September of last year, made pro vision for a Committee on Public Affairs. The work of this committee is to organize the writing and speak ing abilities of the members of the Institute for the purpose of aiding in all public affairs in which the ser vices of accountants, because of their financial and accounting training, would be especially useful. The committee is issuing a number of letter-bulletins, which are receiving wide distribution among business men throughout the country. The first of these letter-bulletins deals with the subject of Arbi tration, which is being adopted as a speedy and economical means for the settlement of commercial dis putes. The major part of this first letter-bulletin is reproduced herewith for the information of the readers of THE PACE STUDENT—Editor. ARBITRATION — a method of settling dis tions. It makes definite recommendations as to putes between business men without resort what accountants should do, first, to aid in intro to the courts—is rapidly becoming of im ducing Arbitration and, second, to develop pro portance in commercial affairs. The development fessional practice with respect to the performance of this practice, the endorsement of the general by accountants of duties as arbitrators, or as in principle of Arbitration by the American Institute vestigators or consultants in arbitrated cases. of Accountants, and the Institute’s suggestion The arbitration of commercial and business dis that members and associates do what they can to putes is a distinct step forward from the custom of encourage this movement, make Arbitration a taking to the courts cases which involve only ques subject of prime importance to accountants tions of fact. It is the belief of the committee throughout the country. that the development of Arbitration presents to The endorsement of the Institute is contained in practising accountants an opportunity to be of a resolution adopted at the annual meeting held in distinct service to their clients and the community, September, 1923, at Washington, D. C., as follows: and to benefit accountancy. By employing Arbi “Resolved that the Institute give to the work of the tration, business men may obtain prompt decisions Arbitration Society of America its support; that it and settlements of their differences, and at the communicate with its members throughout the country, same time may aid in relieving the congested urging them to be favorable to the introduction of the system of Arbitration in commercial disputes, and gen condition of court calendars. erally do everything possible to forward the popularity Arbitration is just coming into use in the business of Arbitration, including services as arbitrators, when world. Accountants, in their capacity of business called upon so to act.” consultants and advisers, have an opportunity to Careful study of the development of arbitration be of aid in the enactment of enabling legislation in the business life of the nation, and of its bearing in about forty of the states. Public service in this on the profession of accountancy, has been made by direction will be useful to business men and will the Bureau of Public Affairs. The bureau there undoubtedly serve to strengthen the position of fore presents herewith the results of its investiga accountants. LEADING ARTICLES FOR AUGUST The Relation of Arbitration to Account Business is Recognizing the Status of ancy ---------- Title Page the C.P.A. Certificate - - - Page 141 Cost Accounting for Manufacture of Tanning Extracts ------- Page 133 Good Will ---------- Page 142 The Question and Answer Department - Page 135 Definition of The Public Practice of Editorial ----------- Page 138 Accountancy ------ Page 143 Pace Student Page 130 August The Arbitration Society of America, 115 Broad Present Legal Status way, New York City, is the organization, nation Arbitration laws, making arbitration valid, irre wide in scope, directing the work of promoting the vocable, and enforceable, are now in effect in New enactment of Arbitration statutes, and of setting York and New Jersey. Other states, such as up and conducting Arbitration tribunals. Moses Idaho, Illinois, Kansas, Maine, Massachusetts, H. Grossman is acting president; Charles M. Nebraska, North Dakota, Tennessee, Texas, Utah, Schwab is chairman of its general committee; and and Wisconsin, also have arbitration laws, but its board of governors includes such well-known these are not fully satisfactory, as they permit a men as Franklin Simon, Bainbridge Colby, Arthur withdrawal of a disputant after he has signed an S. Tompkins, James A. O’Gorman, William C. agreement to arbitrate, or contain some other Redfield, Samuel McRoberts, Jules S. Bache, loop-hole. The amendment of these laws is Charles L. Guy, Almet F. Jenks, Frederic Ker desired. nochan, and Frank H. Sommer. Officials of the A similar measure, affecting practice in federal Arbitration Society have assisted the Bureau of courts and providing for the arbitration of inter Public Affairs of the Institute in its study of Arbi state and maritime disputes, is now pending in tration, and many of the facts in this bulletin were Congress. This measure was introduced by Sena obtained from that source. tor Thomas Sterling and Congressman Ogden L. What Is Arbitration? Mills. There are thirty-five states in which the first Arbitration is a legally recognized method of steps for legalization of Arbitration have yet to be settling differences between business men without taken. Measures are being considered in states ordinary litigation. Decisions are obtained by the whose legislatures convene this year and next year. submission of facts to one or more arbitrators, Requests for co-operation in obtaining the enact whose award is binding and legally enforceable. ment of Arbitration laws have been received by the When disputants sign an agreement to arbitrate, Arbitration Society of America from Arizona, Cali this agreement, under approved arbitration laws, fornia, Colorado, Connecticut, District of Colum is irrevocable; neither side can withdraw, and both bia, Florida, Georgia, Idaho, Indiana, Michigan, must abide by the decision. Minnesota, Missouri, Nebraska, North Dakota, Arbitration is a method of co-operating with the Oklahoma, Pennsylvania, Tennessee, Texas, Wash courts. It is in no sense a rival of the courts, but ington, West Virginia, and Wyoming. it is a method of obtaining a settlement of points General Steps to Be Taken in dispute in a few days, or weeks, instead of by litigation extending over the months or years The general steps to be taken on behalf of Arbi required to take a legal action through the courts. tration may be summarized thus: Hearings are held in private—there is no pub 1. The public, particularly business men and licity. Each side tells its story in its own way. women, should be educated as to the advantages of Rules of evidence do not exclude matter which the arbitration. arbitrators believe has a bearing on the case. 2. Approved Arbitration laws should be enacted Arbitrators may be chosen from a list of volun in all states and territories of the United States teers who serve without pay, or the disputants may which do not already have such laws. agree on one or more arbitrators, and make their 3. Business men and women should be encour own arrangements as to fees. Disputants may be aged to have clauses providing for the arbitration represented by counsel if they so desire, and may of commercial disputes involving questions of fact introduce, at their own expense, such expert testi inserted in contracts. mony as they wish. 4. A list should be made (and published) of men Arbitration tribunals are not trade courts exclu and women willing to serve as arbitrators, either sively; there are no limits to the scope of their with or without compensation. public service. 5. Trade organizations should be encouraged to Agreements to submit actionable differences or co-operate in general Arbitration tribunals. controversies to arbitration are called “submis Experiences of Accountants sions.” They are written agreements, upheld by the law in some states as binding and irrevocable. A public arbitration tribunal has been conducted Arbitrators, under the approved laws, have the in the City of New York for a year and one-half. power to subpoena witnesses, compel production of At the request of commercial organizations and books and papers, and in almost all essential re others interested in furthering arbitration, many spects, to exercise the same authority with which a men prominent in the community agreed to serve judge is clothed in the conduct of a trial. as volunteer arbitrators, without fee. Others ex The awards of arbitrators, under the approved pressed a willingness to serve as arbitrators, the laws, may be confirmed by the court if so desired, fees to be fixed in proportion to the amounts and and they then become a judgment of that court. the time involved in the various cases in which In a majority of cases the awards of arbitrators are they were called to act.

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