It may be suggested, in connection with increased real estate values, that there is another point of view to be considered - that of the stockholders, for whom the officers of the company are, in fact, trustees.

Let us assume that a manufacturing concern has for a long period owned its land and buildings, and has increased its business to such a point that no further increase can be made unless additional capital, either fixed or floating, is provided. During this period of success, the land has increased in market price to such an extent that it would now form ample security for a loan of sufficient size to obviate the necessity for a further issue of capital stock, although its cost price as shown on the ledger does not indicate this.

It will generally be conceded that in such an instance the directors might be derelict in their duties if they failed to avail themselves of this appreciated value; and having availed themselves of it, the appreciation should appear in the accounts. If they failed to show it, there would exist something very nearly akin to that bone of contention, a "secret reserve" - a matter not for discussion here.