to the foot of the page, to indicate that the entries on the page are complete; the sums of the columns of receipts and expenditures should then be put down under lines drawn below the respective columns, and also carried forward to the tops of the next corresponding pages, the left-hand pages being used for receipts, and the right-hand pages for expenditures. When adding the columns of the pages, the amounts which have been carried forward from the preceding pages must, of course, be included, in order that the sum at the foot of each page shall show the total amount of receipts or expenditures, instead of merely the sum of the entries on the particular page. This process is to be repeated and continued until the end of the year, when the annual account will be complete, and the new account for the following year will be in order. At the top of each page of receipts, in small figures, and a little to one side, it is well to write the balance, or difference between the total receipts and the total expenditures up to that time. The person keeping the account will then be able to tell at a glance just how matters stand, and how rapidly her receipts are gaining over her expenditures.

It is perhaps unnecessary to remark that too great care cannot be taken to avoid mistakes in calculation, since the account-book is an important guide, and a bad guide is undoubtedly worse than none at all.

It will appear later that a check-book, properly kept, may be an excellent account-book of receipts and expenditures, and may be made to answer many of the purposes of an ordinary expense-account.

A properly kept expense-account will furnish all necessary information as to the amounts of receipts of income and expenditures and the balance between them, at any time when such information may be necessary, and the task of living well within the income, as required by the rule, will then be reduced to a maintaining, at all times, of the required ratio between the receipts of income and the expenditures.

In the simplest condition of income and expenditure, the mathematical elements which are involved in this task will

cause but little difficulty. Thus, if a person shall have a regular, certain, and uniform income, say of six thousand dollars per annum, and the ratio of expenditures to income which shall have been decided upon shall be two thirds (that is, the annual total expenditures shall not exceed two thirds of the annual income), the account-book at the end of each year must show an amount of receipts equal to six thousand dollars and an amount of expenditures not exceeding two thirds of six thousand, or four thousand dollars. If the expenses of living are uniform from month to month, the process may be still further simplified by verifying the required ratio at the end of each month. Thus, in the above illustration, the monthly income will be five hundred dollars, and the monthly expenditure must therefore not exceed two thirds of five hundred dollars, or $333.

In the majority of cases such uniformities in both incomes and expenditures will indeed not be found; the maintaining of the required ratio at all times during the year will be complicated by the fact that the expenditures for different months will vary greatly because of annual or other periodical expenditures, such as taxes, interest, insurance premiums, etc. Difficulties of this kind may be overcome by determining upon the amounts of the required monthly savings each year in advance, taking carefully into the account all important annual expenditures, and making ample allowances for possible increases in these expenditures from year to year. The following example will serve to explain the method of such a calculation: Suppose an annual income to be $9000, or $750. per month, and that special annual expenditures are insurance, payable March 1st, $300; interest, payable May 1st and November 1st, $250 at each payment; and taxes, payable October 1st, $1000. If two thirds has been accepted as the correct ratio of expenditures to income, the total amount of income which may be expended annually will be $6000, and the amount which must be laid by each year $3000. Deducting $1800 (the total amount of the special expenditures) from $6000 will give $4200 as the amount which may be expended annually for ordinary purposes, or $350 per

month. The result of this calculation may be plainly seen by means of the following table of receipts of income, expenditures, and balances, or amounts laid by, for each month of the year:

Incomes and expenditures are rarely uniform to the extent assumed in the examples which have been given; for the purposes which are at present under consideration, therefore, they must be determined in advance by careful estimation, taking into consideration all possible irregularities, and making it certain that all errors shall be upon the side of safety that is, that incomes shall be somewhat underestimated and expenditures similarly overestimated. The ability to estimate with close approximation the amounts of future incomes and expenditures will prove to be of great value, and this ability may be cultivated and improved by practising the following suggestion: At the beginning of the year a careful calculation of probable receipts and expenditures for each month of the year may be made, and a memorandum made of the amounts of income over and above expenditures which, according to the calculation, should be on hand on the last day of each month during the year. On the last day of each month the net amount of income actually

on hand may be set down on the memorandum opposite the estimated amount for that month. At the end of the year the memorandum will show how far the ability of estimation is to be relied upon and will also offer suggestions for a more accurate estimation for the following year.

The evenness of incomes may be better maintained by making investments in such a manner that the returns shall be received at different times of the year. For example, the interest of three mortgages may be made payable on the first days of January and July, on the first days of March and September, and on the first days of May and November, respectively, instead of all on the usual interest-days in May and November. In the same manner, if the rentals from three parcels of real estate shall be payable quarterly, the first may be made to become due in the months of January, April, July, and October; the second in February, May, August, and November; and the third in March, June, September, and December, instead of all upon the usual rentdays in May, August, November, and February. In this manner incomes will be received in smaller and more frequent payments. This method of regulating the receipts of income has the advantage of keeping the person who receives it more regularly supplied with ready money, and also of lessening the derangement of affairs in case of the loss of a portion; while, on the other hand, it involves considerably more work in the matters of keeping accounts, making deposits, receipts, etc.

In this place, as appropriately as in any other, it may be well to call attention to the homely old proverb that it is unwise to keep all one's eggs in one basket. Of the two evils of being deprived of a part of one's income and of losing it all, the former is unquestionably to be chosen whenever there is a possibility of choosing. The speculator, true to his gambler's nature, risks all that he has in one mighty operation, hoping that by so doing he will realize a much larger profit; careful investors, also true to their instincts of caution and safety, guard against the entire loss of their incomes by so making their various investments that they cannot all

be subject to the same influences at the same time, and therefore will be least likely to fail at the same time. As an illustration of this principle, it would be the height of folly to invest all one's principal in one large building suited only to a special and unusual purpose, because, if circumstances should destroy the demand for the unusual specialty, the building would become idle, and ruinous results would almost certainly follow. Accordingly the principal may be distributed in various kinds of investments; but this principle of distribution must not be carelessly or blindly applied, lest, in our anxiety for a proper variety of investments, we shall include some which will turn out disastrously.

An important rule for the preservation of property is that the line of distinction which must separate income from principal shall be kept constantly well defined; for if it is necessary to save a portion of the income each year, it certainly cannot be of less importance that the principal, which furnishes the income, shall be free from all confusion and complication which might lead to an encroachment upon and a consequent impairment of it.

In connection with this subject it is to be noticed that there appears to exist in our country a tendency to approach somewhat too rashly this properly inviolable subject of principal, a tendency certainly rather of barbarous than of civilized origin. Thus the savage, knowing no such distinction as that between principal and income, boasts of the number of his ponies, slaves, and other personal belongings; Americans, not properly appreciating this distinction, commonly speak of a person as having a fortune of so many thousands or millions of dollars; while the more conservative Europeans, fully appreciating the importance of the distinction, usually refer to persons of wealth as being possessed of so many pounds, francs, or marks per year.

In order that this distinction between principal and income may be clearly maintained, it is necessary to consider what ought properly to constitute principal and what income. The dictionary gives the following definitions,-Principal: property or capital as opposed to interest or income; a sum