The Divided Code.

Abstract There is an evident tendency nowadays to crystallize accounting standards and essentials of business and financial practice in the form of explicit legal statement. State corporation acts, for example, have been steadily becoming more exhaustive and technical with respect to such subjects as form of capitalization, issuance of shares, dividends, valuation of assets, sale of property, and so on. The following is an outline of points which may well be covered in the dividend code or which should, at any rate, be carefully considered by those charged with the duty of framing the dividend section or sections of the act. The source and measure of dividends is profit, current or accumulated, or,.in special cases, increase in value of assets not yet converted through sale or other disposition. Disbursements by corporations in excess of this measure are reductions in capital and should be labeled as such, and should be charged to stated capital or to a special contra account modifying stated capital. There should be no exception to this definition in the case of wasting enterprises such as mines.