Second.—I hold to the opinion that the cost or purchase price of this piece of real estate is not $11,197, but $9,000. It is true that the entire investment was $11,197, but what have we done? We have taken, in part satisfaction of our claim, a house worth $ 9,000, and for which no one else has bid more. The remaining $2,197 is not wiped out. We have a deficiency judgment for it against the bondsman. If this proves worthless, of course we lose the $2,197; but that is not to be assumed prima facie. Suppose another person had bid $9,000, and we, thinking that the full price, had let it go, would he, the purchaser, consider the property worth any more than $9,000? He does not know of our claim; $9,000 represents to him the entire cost. We, on the other hand would have still the deficiency judgment for $2,197. Possibly this is worthless. If so, it is our loss; but the loss is on the bond, not on the real estate. When we buy in the property we happen accidentally to be the purchaser and, at the same time, the judgment creditor; but this should not merge in one two entirely different transactions. Suppose, after buying the property for $9,000, we sell it for $ 10,000. This gain of $1,000 does not lessen our claim on the deficiency judgment. If the debtor should be, or should become, solvent, we can still collect of him the full amount. The rise of $1,000 is our gain. But how can it be a gain if the cost was $11,197? I am aware that in this opinion I am nearly single-handed against all parties and current opinion, but believe that my view is strictly correct. Schedule I is a miscellaneous one, and very crudely constructed. Before the statement of cash transactions was prescribed, Schedule I contained questions eliciting much of the information which is now contained in that statement. Therefore, its present contents are, to some extent, a repetition of what has already been given in the statement of cash transactions, and to some extent contains matter which more properly belonged there. All statistics which relate to financial values should be grouped either under the resources or the liabilities, or the receipts, or the payments, not in a miscellaneous schedule which contains such items as the number of trustees and the number who have attended each meeting. In this schedule occurs the question, "Date of taking last abstract of balances due depositors as shown by depositors' ledgers," and "What was the amount of the discrepancy, if any, between the aggregate of such balances and the amount shown by the general ledger due to depositors at the same date?"

The law requires, what a prudent bank would of its own accord prescribe, that an accurate list or balance of amounts due depositors shall be taken at least once in six months, and that the discrepancies, if any, found on that occasion be reported to the superintendent. The process of this balance might have been described under the bookkeeper's department. It has there been stated that the balance due each depositor is proved whenever there is a change, so that, substantially, the ledgers are always in a state of proved accuracy as to individual balances. We have also seen that each month the aggregate amount due the depositors of each ledger is ascertained, and that by aggregating these the grand total, as shown by the general ledger, is corroborated. These processes continue during the half year, and the results of monthly reports are entered in a book kept by the secretary called Ledger Balances. At the end of six months there is an additional column for dividend, and, including this, the balance due depositors is again ascertained, and this is the basis of the semi-annual trial balance required by law. Each of the ledgers, from one to thirty, ought to show a certain amount of aggregate balances, and this list, added together in the book called Ledger Balances, equals the amount reported to the bank department as due depositors on the 1st day of January or July. Each bookkeeper transcribes into the book already mentioned under the name of "interest and balance book," opposite the proper number, the amount owing to each depositor. Having done this, and carefully compared it, he adds the entire amount together, and, if perfectly correct in every respect, the sum total should equal the corresponding line in the ledger balances. If it does not so equal, there is probably an error, either in transcribing some amount, or in adding up some page, or in adding the interest to the previous balance. It might be mentioned that the work is facilitated by writing in red ink, in the balance column, the result produced by crediting the dividend. It has been found by experience that any partial method of examination, in order to find the reason of any discrepancy, is ineffectual. Such methods we call "stabbing." We have an exhaustive method, which we call "taking off drafts and deposits." It consists in taking the original tickets of all the transactions of six months, and assorting them in a mass, numerically, so that, for example, in ledger 27, the transactions of six months will be represented by two series of tickets, the deposit tickets beginning with the deposits on account No. 135,001, and ending with the deposits on account No. 140,000. The draft tickets form a separate series, beginning and ending in the same way. When this assorting is completed, we copy off each of these series of tickets by amounts only, but we do this in sections. Suppose the first page of the interest and balance book comprises Nos. 135,001 to 135,050, then we write down all the deposits in the same compass, and take their total. We write down all the drafts in the same compass, and take their total, Then we form an equation thus: Old balance + deposits + dividend=drafts + new balance. Or, in another form: Old balance + deposits + interest—drafts=new balance. If this equation holds good, the first page is considered correct, or proved. Then we go on to the second page, and so on. Probably we discover by this process the whole or a part of the discrepancy by the time we reach the end. If not, we put together the totals; that is, we arrange the page footings in tabular form in five columns, so that by footing these columns we obtain of the entire ledger the same equation: Old balance + deposits + interest=drafts -(- new balance. This ought to prove. If it does not, some one of the pages which we believed to be in proof has really been out of balance. Having brought this final equation to an adjustment, our next step is to ascertain in which column the error is. We have an independent statement of every one of these columns, and we make the comparison of each in succession. The old balance we have before us in the same book—the interest like-wise, and the new balance. If one of the two former of these is incorrect, the defect is soon remedied, but when these two columns have been corrected, we still have the drafts and the deposits.