Charles DeLano Hine

“ In the first place, the same man handles the money and its written representations, the accounts. When we reach the stage of having both a teller and a bookkeeper, the one is a check on the other, because of a difference in point of view. I do not understand that a bank considers its bookkeepers more honest than its tellers or vice versa. The bookkeeper came along to check the teller, not because of such marked variations in humanity, but because of the volume of business. There was more than one man could do. ”

“ The temptation of the special staff men, call them inspectors or efficiency engineers, if you please, is to become meddlers. They are so enthusiastic for the cause that they desire to save the country and reform the road all on the same day. The men who succeed at special staff work are those who stick to the principle enunciated. An inspector, because he is a staff officer, should never give an order.
The coming new department of inspection or efficiency, like all innovations, will have its troubles. ”

“ The ultimate effect is dwarfing to administration and fatal to maximum composite efficiency. In a compact establishment like a department store or a large manufacturing plant, the closer contact of the departments concerned minimizes the evils of this segregation. The operations of a government or of a railway extend over so much territory that such close contact is impossible. The result is that our bookkeeper is too far away from the paying teller. The bookkeeper then arrogates to himself fancied qualities of a superior being blessed with a rectitude born of the guardianship of money. ”

“ By the same reasoning a large bank would keep its customers waiting at one window because only one teller would be allowed to pay out money. A bank can count its cash at the end of a day, but it can never tell exactly what remittances its correspondents have in the mail. A railway’s money is even more in a state of unstable equilibrium. All night long some of its ticket offices and lunch counters are open. All night long cash fares are being collected on trains. The exact amount of money on hand at a given moment is only an approximation. This is natural from the characteristics of a railway. ”

“ The things which money may represent are hard to measure because often intangible and indefinite. The money account may or may not reflect efficiency in performance. Have we not been grasping at the shadow of money at the expense of the substance, effect? Consider, if you please, the working of a bank, perhaps the corporate institution in whose efficiency the public has the greatest confidence. In a small country bank one man does all the work. Later he requires a clerk or a bookkeeper. ”

“ The large corporations, including the railways, seem to have followed governments into a fundamental fallacy in the matter of money and accounting. Because, now and then, in spite of safeguards, a trust is violated and money embezzled, a remedy is sought by segregating in administration all activities having to do directly with fiscal affairs. ”

“ He will not resent the inspection of his division by the other department, because conscious of the fact that the inspectors are at least his equals, and perhaps his superiors, in experience and rank. These inspectors will certify not only that the money has been honestly and legally expended, but wisely and efficiently as well. While an absolute essential, honesty is not the only component requirement of good administration. The one road on which good intentions are standard ballast is not as yet telegraphing its accidents and its density of traffic to the Interstate Commerce Commission. ”

“ The head of the department, whether he be called general inspector or vice-president, will have to remember that untrained persons do not necessarily become endowed with superior intelligence and professional acumen by the privilege of personal contact with him and assignment to his department. To be successful his department will consist of a corps of highly trained inspectors of official rank and experience, capable of first hand dealing with things and men. The tendency of both inspection and audit is to become perfunctory. ”

“ The more conscientious and careful the engineer the more does he desire a check on his own calculations by competent persons. We accept the estimates of the engineer, swallow them whole sometimes. We tell him to go ahead and blow in the company’s money or credit to accomplish a desired result. ”

“ Audit is extremely important, but not all-important. Audit is a component part of a larger activity, inspection. The word inspection on railways is unfortunately and improperly associated with the thought of secret service and underhanded spotting. True inspection is as open as the day and as welcome as the evening. ”

“ The law of the survival of the fittest will bring out those all-around men who can succeed in both line and staff. The superintendent who has been detailed as an inspector for a year or two will return to a division with a broader view and will be a better superintendent. ”

“ Some of the best roads in the country now have division accounting bureaus in order that the superintendent may keep his operating expenses in hand. The next step must be a division disbursing officer. A pay-roll and certain kinds of vouchers, including some for claims, must become cash without the worthless certification of the general office. ”

“ It would be a hard matter to stop every train and determine the exact location of every freight car, at home or earning per diem, at any particular moment of time. We can, however, approximate sufficiently closely to the conditions to serve all practical purposes. ”