University of California Southern Regional Library Facility UNIVERSITY OF CALIFORNIA AT LOS ANGELES GIFT OF CLAF.K OBSERVATORY SIMPLE MINE ACCOUNTING Published by the McGraw-Hi!l Book. Company Successors to tKe Eook.Departments of the McGraw Publishing Company Hill Publishing Company FViblishers of Books for Electrical World The Engineering and Mining Journal TKe Engineering Record Power and The Engineer Electric Railway Journal American Machinist Simple Mine Accounting BY DAVID WALLACE EXPERT MINE ACCOUNTANT SECOND EDITION WITH ADDED MATERIAL 1909 McGRAW-HILL BOOK COMPANY NEW YORK Copyright, 1908, BY THE HILL PUBLISHING COMPANY ENTERED AT STATIONERS' HALL The Plimpton Press Norwood Mass. USA. 2: < library PREFACE THIS book is intended primarily for those who have had no opportunity to include among their other studies that of bookkeeping superintendents, mine foremen, timekeepers, etc., having charge of accounts of mining operations; and, whilst mine accountants and bookkeepers may perhaps find some- thing useful, the explanations and illustrations have been simplified as much as possible for the guidance of those referred to. Local conditions vary con- siderably and no "hard-and-fast" rule should be insisted upon; a little mental exercise on the part of the reader will disclose the best method of handling his accounts bearing in mind that accuracy, sim- plicity, and economy are the chief desiderata in mine accounting. DAVID WALLACE. 2414 3G PREFACE TO SECOND EDITION IT is worth while repeating that, to him who handles cash, distributes accounts or purchases supplies at a mine, the objective point aimed at should be to avoid a loose, slip-shod, happy-go-lucky style of doing busi- ness, yet, at the same time, dispense with too much system or " red tape." The integrity of the man is of more importance than so-called clerical checks, however much insisted upon. In this second edition the reader will find an Appen- dix, containing observations and forms relating to the Card System for warehouse, shipping documents and summarized sheets of costs and profits, which may be amended or amplified to suit individual requirements. DAVID WALLACE. VI SIMPLE MINE ACCOUNTING FOB the sake of brevity we will suppose that a company has been formed in Boston, called the Federal Mining Company, which has acquired some properties in Old Mexico with the intention of developing and, if found a paying proposition, operating same. In answer to an advertisement in a Mining Journal for a young graduate who understands surveying and assaying, one of the applicants is appointed to go down and take charge of the property. Everything is strange, language, customs, habits, climate, etc. (Old Mexico is chosen simply as an example, with the view of making our remarks applicable to any part of the world.) He arrives on the ground, which is distant about ten miles from a small Mexican town, and finds things exceedingly crude in fact the only attractive feature is the climate. The accommoda- tion provided consists of an adobe (mud-brick) build- ing of two rooms to serve as bedroom, dining-room, kitchen, office, store-room, assay office, etc. How- ever, it is not our intention to descant upon the "hundred and one" obstacles to be encountered but simply to confine our remarks to the office part of the business. The first operation will be to open a CASH BOOK or " Libro de Caja" as it is called in Spanish. At the local store in the town a cash book can be purchased, already lined and ruled, similar to Fig. 1. This blank book will answer the purpose temporarily until the office becomes better established. It should have the headings on the left side "Receipts" and on the right side " Expenditure." We will suppose that the Boston office of the Federal Mining Company has de- posited with the Miners Bank of Mexico City the sum of $10,000 Mexican pesos against which drafts are to be drawn. As previously stated, Old Mexico is simply being referred to as an example ; it is immaterial whether, for local purposes, drafts are to be drawn on a bank in Denver, Colo., Mendoza, Argentine Republic, or Brisbane, Queensland, Australia. Pre- sumably, the young man appointed as superintendent, whom we will call Robert Lester, has received an advance in cash from the Federal Mining Company in Boston to pay his traveling expenses, etc. His first operation, therefore, would be to charge his cash with the full amount, say $500 gold, which at exchange rate of 200 per cent would be $1000 Mexican pesos or in other words one American dollar is worth two Mexican pesos and the $1000 will appear on the "Receipts" side of Cash Book (see Fig. 1). On the "Expenditure" side of Cash Book he should credit his cash with the total sum of his traveling ex- penses from Boston to destination as shown on Fig. 1. 3 SIMPLE MINE ACCOUNTING Fig. CASH RECEIPTS DATE FROM WHOM DRAFT NO. AMOUNT 5 1 To cash advanced to R. Lester in Boston " $500.00 U. S. Cy. @ each 200% 1000 00 15 Smith & Co. 2000 55 00 17 Renecke & Co. 2001 500 00 n i. 2002 300 00 2003 200 00 SIMPLE MINE ACCOUNTING No. i BOOK EXPENDITURE DATE DESCRIPTION VOUCHER NO. AMOUNT 5 7 R. Lester, traveling expenses 1 225 00 8 Telegram to Boston (F. M. Co.) 2 00 9 1 common lamp for office 2 25 15 Smith & Co., stationery 2 55 00 ii Pay-roll, labor 3 415 00 it Express ch'gs on stationery 4 37 6 SIMPLE MINE ACCOUNTING R. Lester, traveling expenses, Voucher 1, $225. This brings us to the next operation, viz., making out the voucher. Cash has been credited, as we see, with Voucher No. 1, but the voucher itself should be itemized in detail as shown on Fig. 3. By charging cash with $1000 and crediting cash with $225 leaves a balance in cash of $775 Mexican pesos, out of which future payments can be made as called for. It will most likely happen that odd payments will have to be made for small articles, occasional mes- senger service, etc., for which proper receipts cannot be obtained. These, if paid for when out of the office, should be jotted down in a vest-pocket memo- randum book, from which they should be entered into Cash Book each day. A word of warning will not be amiss in regard to these petty cash payments. Let no payment, however insignificant, on Company's account pass without entry into books, otherwise at end of month when cash statement is made up for headquarters it will be hard to reconcile actual cash on hand with the payments made. For all telegrams, express charges, etc., receipts should be obtained and kept on file at mine for future reference if necessary. Such charges, at end of month, can be grouped and entered on a regular voucher form, giving dates and particulars. It will be seen that Voucher No. 2, Fig. 1, is for Smith & Go's, bill for stationery, amounting to $55. Now, as this stationery came from Mexico City, payment must be made by draft on Mexico City. We have already alluded to the fact that the Boston office has placed with the Miners Bank the sum of $10,000. Following the general custom and in accord- ance with instructions received by them, the bank SIMPLE MINE ACCOUNTING 7 has furnished Robert Lester, Superintendent of Federal Mining Company, Las Mesas, Corrientes, a draft book. A draft is therefore drawn in favor of Smith & Co. and mailed to them at Mexico City, same being entered in Cash Book with corresponding number of draft. The town of Las Mesas, though by no means large, does a considerable business, consequently it will be an easy matter to obtain funds from the storekeepers in return for drafts issued in their favor on Mexico City. Usually, under such circumstances, drafts are issued at par; in other words, the storekeeper pays no premium nor discounts the face value of the draft drawn. In many cases, however, money has to be sent by express and escorted by armed guards from the railroad to the mines, especially large sums in- tended for pay-roll. As the development of the property progresses it will be found that the blank memorandum book which has served the purpose for cash entries, and which answered very well temporarily, ought to be dis- carded for a proper Cash Book (see Fig. 2.) The columns are self-explanatory. On the side marked " Dr." or Debit, which we will now use in place of "Receipts" we have three columns. After closing the accounts for previous month the balance should be brought forward as cash on hand (see first entry, Fig. 2). "To balance $752.09" in outside column for cash. In the column marked "Various" can be entered such items which do not properly be- long to either of the other columns. For instance : In checking up pay-roll, Voucher No. 3 for May, it was found that a peon Tomas Castro was credited with half a day too much. As the accounts were closed when this discovery was made 8 SIMPLE MINE ACCOUNTING we charge cash with 0.75 in our June statement (see Fig. 2) in the column marked " Various." On the same Voucher No. 3 for May, pay-roll showed $3.25 as due a peon named Juan Garcia. This man did not collect his pay and, from information received, it was learned that he had left the camp, consequently the money which he should have collected, and which was on hand after pay-roll was taken up in Cash Book, should be charged to Cash in June, seeing that credit has been received for same on Voucher No. 3 in May (see Fig. 2) entry in cash column. The established custom of the district being to pay laborers and con- tractors every fortnight, it will be necessary to obtain funds from the local stores in Las Mesas, which is done by issuing drafts Nos. 2050, 2051, 2053 in favor of Reneckie & Co. in the sum of $6000 (see Draft column, Fig. 2). In other words, silver pesos and bills of different denominations were handed to Super- intendent for the drafts made out in their favor. On June 18 (see Fig. 2) there is an item "Mendez e hijo, lumber, $31.68." This is for some lumber sold to a local merchant in Las Mesas. Whilst the Federal Mining Company is not in the lumber or any other outside selling business, it may happen that, to oblige residents in the neighborhood, occasionally this will be done. The lumber in this case was figured at cost, plus 10 per cent, the value of which is entered in cash column. (This will be re- ferred to later under Material Account and credited to Material Account.) The Cash Book proper is only concerned with cash, and for this reason, while deductions are made from Pay-roll for Hospital Fund and for materials sold to contractors, credit is obtained in the Journal Record and not in Cash Book. SIMPLE MINE ACCOUNTING 9 On the other side of the Cash Book, " Cr." or Credit, which should be used in place of "Expenditure," we start in with Postage Stamps. This being an item which may have to be repeated during the month, together with express charges, telegrams, etc., should be entered in the column " Various." It will also be noted that $6 has been paid to Pedro Banda, a peon who was injured this being a weekly cash benefit, whilst incapacitated, in addition to medical attend- ance. (This will be referred to under Hospital Fund.) All charges entered in the "Various" column should be grouped under their several headings on a voucher form and the total sum of voucher carried out into the "Invoice" column, at end of month. Regarding the advance to Marcos Ramirez; this was made to a contractor who was sinking a shaft, he not being able to wait until pay-day. The $35 will be deducted from pay-roll, and as the amount naturally is included in the total sum of the pay-roll for the first fortnight, we simply strike out the item - not by scratching out the figures, not by charging the cash with the $35, but simply by placing under the figures in red ink the same amount, to signify that the amount has been taken up and also to avoid taking credit for the payment twice. The whole object, as may readily be seen by the intelligent reader, is to make the entries so that the different accounts can be easily checked and also serve the purpose of ready reference. During the month materials and supplies will be constantly coming in. Those in carloads can be identified by car number and railroad expense bill, small articles by Expense Bill Number and duly entered in the "Freights" column. At end of the 10 SIMPLE MINE ACCOUNTING DEBIT Fig. CASH FEDERAL MINING DATE FROM WHOM RECEIVED DRAFT NO. DRAFTS VARIOUS CASH 6 1 To Balance 752 09 u Reneckie & Co. 2050 500 00 II 2051 500 00 3 Eastern R. R. Co. 2052 294 00 Correction, overcharge , voucher No. 3, May. $day. Tomas Castro. 75 11 Unclaimed wages, voucher No. 3, May. Juan Garcia 3 25 10 Reneckie & Co. 2053 5000 00 15 National Explosive Co. 2054 5300 00 ii Mexican Lumber Co. 2055 370 00 American Telephone Co. 2056 150 00 18 Medical Supply Co. 2057 30 00 Mendez 6 hijo, lumber 31 68 " Eastern R. R. Co. 2058 2889 70 Trevino y Cia. 2059 2000 00 25 Reneckie & Co. 2060 1000 00 n 2061 3000 00 it 11 2062 2000 00 30 Sam Lung 155 00 (i Reneckie & Co. 2063 2007 45 25041 15 25041 15 75 75 25983 92 SIMPLE MINE ACCOUNTING 11 No. 2 BOOK COMPANY CREDIT DATE DESCRIPTION VARIOUS FREIGHT PAY-ROLL INVOICES 6 1 Postage stamps 10 00 3 Express, signal wire from Mexico 2 15 " R. R. freight, lumber car 4976, No. 39 294 00 7 Reneckie & Co., hard- ware 61 80 8 Telegram to Boston (F. M. Co.) 2 70 9 Hospital, cash to P. Banda 6 00 M. Ramirez, cash ad- vance *35 00 15 Pay-roll, 1st fortnight 6213 75 Nat. Explosive Co., powder 5300 00 Mexican Lumber Co., car 4976 370 00 18 R. R. freight, explo- sives, car 5879,No.4 1 489 70 " R. R. freight, mach'y, car 12,575, No. 43 2400 00 Am. Telephone Co., batteries, etc. 150 00 18 Express, office sup- plies for Mexico 4 20 a Medical Supply Co., cost 30 00 30 Sam Lung, hotel sup- plies 155 00 a R. R. frt., telephone mat'ls, No. 52 5 90 it Pay-roll, 2nd fortnight 7646 80 u employees 1665 96 " Telegrams ,express ,etc . 25 05 25 05 " R. R. freight charges 3189 60 3189 60 " Pay-roll, labor 13860 55 13860 55 it Balance 1175 96 25983 92 12 SIMPLE MINE ACCOUNTING month the whole can be grouped on a voucher form and the total carried out to " Invoice" column. Pay- roll column should contain the net sum which is paid out in cash each pay-day, whether weekly, fortnightly or other periods, and at end of month total can be carried into "Invoice" column. Regarding the de- duction for materials and contributions to hospital fund, these will be entered in Journal Record Book and will be referred to later. From the above it will be seen that the " Invoice" column is used for vouchers complete in themselves. Here let it be observed that each country has its own language and laws and that financial books must be kept in language of the coun- try. For example, in Mexico, instead of : Cash Book read Libro de Caja. Debit " Debe. Credit " Haber. Draft " Libranza. Voucher " Recibo. Various " Varies. Freights " Fletes. Pay-Roll " Ray a. Invoice " Factura. As, however, this work is not a Spanish Primer, we will leave the question of language to each reader to acquire in his own way. VOUCHERS In view of the fact that all original invoices (for purposes of this work) and receipts go to Headquarters in Boston, it is not only desirable but necessary that same be in duplicate, the latter for file at the mine. Style and size for mine vouchers which will be found best adapted for the purpose is seen in Fig. 3, say 8^ in. wide by 7 in. or 10 in. long, printed in copying ink. On the reverse side should be printed in black ink the particulars given in Fig. 4. The size men- tioned will be convenient for typewriter and, when folded once or twice, prove to be of proper dimensions for a large manila envelope. Seeing, however, that invoices of all kinds and sizes are received from outside sources, a rubber stamp, made exactly to correspond to the printing on Fig. 4, should be obtained and used on the outside of all documents intended for vouchers, after folding them to same width and length as company voucher forms. As previously stated, all invoices should be in dupli- cate, but where as in Mexico the law requires that invoices be stamped, only the originals need carry stamps. Such documents as Railroad Expense Bills should be kept (copies) in special book and, when originals are sent to the shipper who pays freight charges, an extra copy should be taken for the Boston office. If for any reason a duplicate invoice is not furnished, then an exact copy should be made at the 13 14 SIMPLE MINE ACCOUNTING Fig. No. 3 No. LAS MESAS, May 7, 1907 Charge Gen. Expense Credit FEDERAL MINING COMPANY to ROBERT LESTER, Sup'd't DATE DESCRIPTION May 7 To traveling expenses from Boston to Las Mesas, Mexico R. R. fare, Boston to Mexico City Pullman 140 25 00 00 Meals en route 20 00 Hotel 8 00 Coach-hire 2 00 R. R. to Las Mesas from " 23 00 Excess baggage Porterage Rec'd 5 1 75 25 225 00 ROBT. LESTER Fig. No. 4 No. FEDERAL MINING COMPANY Las Mesas, Cor. Mexico Month 190 SIMPLE MINE ACCOUNTING 15 mine for filing. All packing lists to be attached to the duplicate invoices and kept at mine for future refer- ence. It will be surprising the amount of work this will save the office staff later on. In this connection one might also suggest keeping a small index book in which, at end of month, name, number of invoice be given, with month and year. Five years hence, when the manager wishes to know what the cost of a certain hoist amounted to, it will be a matter of ten minutes to find the invoice instead of two days. The form (Fig. 3) will also be suitable for making out bills against persons buying materials from the company. For instance, on Fig. 2 there is an item "Mendez e hi jo" (Spanish for Mendez & Son) for lumber sold, and same is made out as shown on Fig. 5. The cost of the lumber f . o. b. Las Mesas was $80, plus 10 per cent, makes $88 per Mil feet, hence the price would be as indicated on the bill against Mendez e hi jo. On the bill will be noted the words "charge" and " credit." Now, as the lumber belongs to Material Account (we shall refer later to this subject), the amount received from Mendez e hi jo is credited to Material Account and, seeing also that the money was actually received, charged to cash as per entry in Fig. 2. 16 SIMPLE MINE ACCOUNTING MENDEZ E HIJO Fig. No. 5 No. , LAS MESAS, June 10, 1907 Charge, Cash to Credit Material % FEDERAL MINING COMPANY DATE DESCRIPTION 6 10 10 boards 2 X 12 X 18 360 ft. @ 88.00 31 68 DRAFTS Every one who has had any business experience is more or less familiar with drafts and checks. We have referred to various drafts drawn for different purposes. In Fig. 6 is shown form of draft as used by the Miners Bank, Mexico City, with stub of same. In issuing draft it would be well to accustom one's self to writing particulars on the stubb first. By "Particulars" is meant in whose favor drawn and for what purpose, with the amount. Another suggestion is that, com- mencing with the first number, the draft itself, in addi- tion to the bank number, should begin with No. 001, but on the stub simply No. 1, advising the bank of the latter, as precaution in case check book fell into the hands of an unauthorized person who wished to make use of same by forging the Superintendent's name; any other special mark will do as well. Should the issuing of drafts be of frequent occurrence or for large amounts, a daily or weekly advice sheet to bank would prove a further safeguard. In any case balance should be checked with bank at end of each month. When drafts are drawn, similar to Nos. 2050, 2051, 2053, the stub should read "Cash for Pay-roll," thus indicating that the drafts were drawn in favor of Reneckie & Co. to obtain funds for the purpose named. 17 18 SIMPLE MINE ACCOUNTING O p i S O 3 % w G p. f<5 of lg S HH O cc s- s 0002 ooos 8| PAY-ROLLS For the first few weeks it will be almost impossible to make up any itemized pay-roll, in fact it is more than likely that many men will be put on or a contract made, with only a pencil memorandum of price from which a rough list is prepared prior to paying off of the men, checking each man as he is paid. Later on, as the operations increase, embracing the San Juan, San Pedro, and the San Marcos mines, each property to have its own account, it will be found absolutely necessary to install some simple and satisfactory method of handling the business. Fig. 7 will prove an expeditious, economical, and accurate system, sub- ject of course to local modifications, as a Time Book for men on day's pay, size 4 in. by 7^ in., with strong covers to stand rough usage. Each mine can have its own book and foreman held responsible, and if more than one department at any mine, the foreman of each department, for all entries in his own Time Book. If conditions will allow, payment to be made twice each month, 15th and last day pay-day to fall on Satur- day following dates mentioned; i.e., should the 15th fall on Thursday books can be made up to 15th and the extra days 16th and 17th carried forward to next pay-roll. Where the 15th fell on the Saturday there would be no time to make up the books, consequently pay-day would follow on the next Saturday. Pay-day would fall every fortnight with the exception of three 19 20 SIMPLE MINE ACCOUNTING t^ o 1 S 00 t o o S H- ( H S h- 1 Q ^ ^x V. \ \ V. ^ V. \ \ V. V. *v. \ ^x OCCUPATION 'S w NAME H 08 3 1-3 _/. "ft. o H g g s M H K- III s i 1 p " 1 w So fa S EH SIMPLE MINE ACCOUNTING 21 or four times in the year, when a period of three weeks would elapse between pay-days. The Time Book has sixteen spaces to allow for time between the 16th and 31st in months containing that number of days. Under this system, to avoid extra work at the mines by timekeeper or foreman in making entries twice over, two Time Books will be required, viz., one for 1st to 15th and the second from 16th to end of month, because on the 15th the first Time Book will be sent to the office for making up the pay-roll and will no doubt be kept two or three days for the purpose; in the meantime the second book is already at the mine for entries to be made covering second fortnight. The foreman at the mine enters in the Time Book name, occupation, time worked, and rate per day, attaching his signature at the bottom. At the office the extensions will be made, showing gross amount due each man in the "Total" column. Deductions for hospital fund, rent or advances made will appear in their respective columns, and in the "Net" column the actual amount to be paid in cash. The column for "Advances" can be used when a man when commencing work is short of funds and asks for a loan such request to be made in writing by Fore- man and held against man's time on pay-day. It may also be employed for any old materials sold to laborers, in such case notation to be made in the Time Book. A separate book should be kept for contracts (see Fig. 8) . Most of the columns are self-explanatory. Aurelio Hernandez has ten men; the reason for show- ing number of men employed by each contractor is to ascertain how much each man is receiving per day and to deduct corresponding amount, due from every one, as contribution to Hospital Fund, through the 22 SIMPLE MINE ACCOUNTING Fig. No. 8 MINE CONTRACT BOOK MINE FROM TO 190 1 to s CO "3 1-H H ^s 8 H O H H S O ec 3 B 2 S- S O -- S \ D i \ 9 H * ^^ H O S! ~v^ * X ~ ^ ^ ii 3 ^ 5 ^ 3 ~-^_ ^ i O ~~^ ^v. c< ^v. ^^ * eo t- i-i co I-H 1-1 05 CO. 00 i-H Q H r. P O 3 i s 00 CD CO CO CD J3 "H S 8 8 . I s 8. MARCOS 8Q O O Q 00 O O O CO CO O T5 t- CC rH O i 1 *-< l-H f ( (N S 8. PEDRO 88SS8S88 ? O O O ^H OJ U3 CO Ol i-H -( I-I l-H T ( i-H CD t- co fc < J3 00 SQOOQOQOO OTf-^OcOOOO o * 8>O(N(NOCDOOOO ^ S S o B fc S 2 K ^ fc H O 00 888888888 8 OO-^O(NOCO COCOC s 4O'*icO>Ot > - l-H l-H OS T}< CO S DESCRIPTION 111 1 ft c3 f J J ' J o ^ "g "E u S ^~ -3 ^ x 3 B d 5 OH fe i-) O 02 OQ SIMPLE MINE ACCOUNTING 33 book shows everything on hand in round figures, cases, pounds, and feet; fractions need not appear in this book. For example : your inventory showed that at San Juan Mine there were eighty cases of candles (full) and fifteen single candles over. In the Ware- house Book (for our present purpose) the odd fifteen need not appear, though record is kept on the mine list which is sent in on form Fig. 15. On the lumber side of the Warehouse Book the number of boards are given for each size, at each mine, obtaining which the numbers offset are figured out. The quantity of slabs and poles are also shown with corresponding prices, the total sum being the value of the lumber on hand, as shown on Fig. 13. In the receiving column will appear the number of articles for which payment has been made during the month. Prices on any article may vary from month to month, consequently the prices in Ware- house Book are not fixed but subject to change when fresh supplies are received. On another form, Fig. 16, all materials received during the month will be shown, giving the voucher number. Fig. 16 shows that some powder was purchased from the Explosion Company, their invoice price being f. o. b. Las Mesas station, $5789.70. Now the railroad freight charges amount- ing to $489.70 were paid by the Federal Mining Com- pany upon delivery of car, consequently this charge must be deducted from the amount of the invoice. A draft is therefore made out in favor of the Explosive Company for $5300 and the railroad expense bill for the $489.70 is sent to shipper in full settlement of the bill. To the above is added the hauling charges from Las Mesas station to the mines, which expense is 34 SIMPLE MINE ACCOUNTING Fig. WAREHOUSE FEDERAL MINING ARTICLE PRICE ON HAND 1ST RECEIVED USED ON HAND S.J. s.p. S.M. Total S.J. S.P. S.M. Total S.J. Sf. S.ll. Total S.J. SJP. S.M. Total Candles 6 X 14 10 on 80 10 10 100 10 8 7 20 70 7 3 80 Powder 40% 15 00 50 50 400 3 2 5 445 445 60% 18 00 20 2C 5 5 15 15 Black 5 00 10 1C 2 1 3 7 7 Caps XXX 6 00 4800 100 100 5000 400 100 100 600 4400 4400 Fuse S. T. 6 00 4000 4000 400 100 100 600 3400 3400 Fuel Coal, tons 20 00 30 10 10 50 10 ft 5 20 20 ft 5 30 Wood, " 10 00 5 5 5 15 2 1 1 4 3 4 4 11 Oils Lub. 9 00 20 10 10 4( 2 1 1 4 18 9 9 36 111. 10 00 10 1( 2 1 1 4 6 6 Sacks Jute 25 500 100 100 70( 200 200 300 100 100 500 Fiber 30 500 50 50 600 100 50 50 200 400 400 Stable Corn, Ibs. 70 00 2000 200( 1000 1000 1000 1000 " Hay, bales 2 00 100 100 50 50 50 50 SIMPLE MINE ACCOUNTING 35 No. 14 BOOK COMPANY LUMBER PRICE ON HAND 1ST REC'D USED ON HAND REMARKS SIZES S.J. S.F S.M Tola S.J. S.J. SJ S.M Total S.J. s.p. s.u Tola IX 6 X 18 80 00 100 100 200 20 j ! 30 80 90 170 1 X 12 X 18 " 50 36 25 100 10 25 10 45 40 15 55 2 X 12 X 18 " 75 12 13 100 40 4 6 50 35 8 't 50 3 X 12 X 18 50 50 200 20 20 230 230 Poles 5 00 100 50 50 200 50 10 10 70 50 40 40 130 Slabs 50 200 50 50 300 70 20 30 120 130 30 20 180 36 SIMPLE MINE ACCOUNTING calculated on basis of time and materials consumed by the Federal Mining Company's teams. On Fig. 16 we see that the total cost laid down at the mines on 400 cases of 40 per cent Dynamite was $5965, equal to $14.91 per case. The stock on hand 1st of month was figured at $15. As the difference is only 9 cents per case the price may remain in Warehouse Book (Fig. 14) at $15. With regard to the price of lumber it will be seen that 10,800 ft. (Fig. 16) cost $894 or $82.77 per Mil, consequently it will be necessary to ascertain number of feet on hand 1st of month at $80, which we find, according to Warehouse Book (Fig. 14), to be: 1st. of month 9900 ft. at 80.00 792.00 Rec'd 10800 " " 82.77 894.00 Number of 20700" " 81.45 1686.00 In other words, the price is changed from $80 per 1000 ft. to $81.45 until the next shipment, when the same operation is repeated. On Fig. 16 we have re- ceived Powder amounting to $5965, and Lumber, $894; both these items are entered on Fig. 13 and the sum on the two forms Fig. 13 and 16 should agree. We now proceed to ascertain what materials were used and sold during the month. Each mine foreman at the end of month reports movement of supplies, as shown on Fig. 15. These forms can be of different colors in the same manner as the pay-roll tickets. It will be noted that a greater quantity of materials is stored at San Juan Mine. This is explained by the fact that the main offices, warehouse, etc., are ad- jacent thereto and that powder, candles, oils, etc., are received at and distributed from that point. Each mine, as indicated on Fig. 15, sends monthly reports to the office. Data obtained therefrom is entered w 1 3 EC 1 H B 8 ^ 1 W S i 1 bO J: S 1 o ffi OiOiCt^QQOQOOOCDQQQOOOCO o o 9E 95 t** '^ ^^ ^5 ^5 c^ ^H ^5 ^5 5 1 *o oo ^* co co 3 CO 6 o ^ CO *" t Q "b 8 a H 00 Ml S3 CO CO "^ H ^"^ -H O > i H O | 1 > 02 w w CN >O i i O O C^l O O W H w CO O O o o i 8 CO TH Q g H '^H?E ( ^ < < 1 W Q II t M .i 1 1 rf O o3 3 3 ^-3 S ^ Of^i ofafa O 02 aa h^ 02 02 vU n (2 cl 38 SIMPLE MINE ACCOUNTING Fig. No. 16 FEDERAL MINING COMPANY Las Mesas, Corrientes, Mexico STATEMENT OF MATERIALS RECEIVED DURING 190 DESCRIPTION VOUCH NO. AMOUNT TOTAL Explosives 400 cases 40% powder 3 5300 00 R.R. frt. " " car 5879, No. 41 9 489 70 Wagon " " 10 100 30 it ii 11 75 00 5965 00 Lumber 200 3 X 12 X 18, 10800 ft. 1 370 00 R. R. frt. car 4976, No. 39 9 294 00 Wagon frt. 10 200 00 11 30 00 894 00 6859 00 SIMPLE MINE ACCOUNTING 39 into Warehouse Book (Fig. 14), and it also furnishes the necessary information for the correct distribution of the charges (see distribution of accounts). Coming now to the materials sold to the contractors, the cost of which is deducted from the different men on the pay-roll, it is to be observed that supplies are not sold at cost price nor is an exorbitant profit made on the articles. For example: We see that a case of candles 6 x 14, 240 to box, costs the company $10 Mexican pesos. They are retailed at 5 cents each candle to contractor, or at rate of $12 per box. The store- keepers in Las Mesas sell a similar candle at 6 cents each. If price is reduced to below 5 cents at the mine the men can afford to buy a large quantity and resell to the merchants in town; if, on the other hand, the price is raised to 6 cents the men will procure their candles from the storekeeper if a slight concession is made them. On the 15th and end of each month printed slips (see Fig. 17) are sent to the office; these slips can be of similar color to pay-roll tickets, and the amounts, after being checked, are entered into contractor's Time Book and from that book into the regular Pay-roll Book. The total sum of all the slips for each fortnight should agree with the figures in the Pay-roll Book. All the sales at one mine will be credited to the mine in the Journal Record Book. Fig. 15 shows the pur- pose for which the various articles were used. This is given in an abbreviated form by simply giving the distribution number, and this leads us to the next con- sideration, viz.: 40 SIMPLE MINE ACCOUNTING MINE NAME Fig. No. 17 FEDERAL MINING COMPANY S. JUAN DATE 6/15 AURELIO HERNANDEZ 1907 VARIOUS CANDLES DYNAMITE CAPS FUSE PRICE AMOUNT 240 05 12 00 100 11 11 00 100 01 1 00 100 01 1 00 25 00 DISTRIBUTION OF ACCOUNTS Before proceeding to enumerate the sub-divisions employed it were well to remark that (at this stage) an Invoice Record Book be kept (see Fig. 18). In this book the merest outlines need only be given, seeing that invoice and packing list with full details are on file in the office, Voucher No. 7 for instance. In addition to this an indexed book for the desk, giv- ing name of article, railroad freight per ton, and price per unit at the mine, will be found useful. For example : Article Origin R. R. rate ton Price Unit Date Cotton waste Mexico City 22.00 0.15 Ib. June This will always be handy for reference, not only to check price of one shipper against another, but also the same shipper against previous shipments and also serve as a check against errors in railroad charges. Different companies subdivide and classify their accounts to suit the peculiar exigencies of their busi- ness. Certain recognized modes of distribution, how- ever, are usually followed by mining companies and may be described thus : CONSTRUCTION ACCOUNT (1) Buildings. (a) Shops, warehouses. (6) Dwelling houses, rooms, (c) Tanks, reservoirs, etc. (2) Machinery, boilers, hoists. (3) Shafts. (4) Tramway. 41 42 SIMPLE MINE ACCOUNTING Fig. INVOICE DATE REC'D SHIP. DATE INV. NO. OFFICE NO. SHIPPER ORIGIN DESCRIPTION WEIGHT 6 18 4 3 7 . & Chalmers Chicago Machinery Carl2575A.T.S.Fe 11506 SIMPLE MINE ACCOUNTING 43 No. 18 RECORD AMOUNT R. R. CHARGES EXPRESS CHARGES DUTIES WAGON FREIGHT TOTAL PER UNIT REMARKS AMOUNT E. B. 4520 00 1875 00 43 525 00 250 00 7170 00 Hoist, S.Pedro Mine 44 SIMPLE MINE ACCOUNTING OPERATING ACCOUNT (1) Prospecting: to include all labor, tools, materials, etc., used for either surface or underground work which may properly be called prospecting. (2) Development : includes all labor, tools, timber, etc., employed in sinking, drifting opening and block- ing out ore. (3) Stoping: all expenses of labor and materials of drilling and breaking ore, figured at so much per ton, car or meter. (4) Hoisting: includes cost of fuel, lubricating oils, repairs to machinery, labor, etc. (5) Tramming: covers all expenses of hauling ore from shaft to bins, repairs to track, ore cars, pro- portion of stable expense for mules, labor, etc. (6) Sampling: cost of tools, labor, etc., for sampling the lots in yard after being hoisted. (7) Loading, transportation: includes cost of ore sacks, hauling from mine to railroad, repairs to wagons, repairs to road, labor of teamsters, watchmen at station, loading into railroad cars. (8) Laboratory: all expenses of assay office, supplies, labor, salaries, etc. (9) General expense: salary of Superintendent, wages of Mechanic, Foremen, Shift-bosses, and other employees whose work is general, such as office boy, messenger; all supplies for office such as stationery, ink, telephone service, payments for stamps, telegrams, express charges; all supplies for the mines not exclusively used at one point, such as cotton waste; proportion of stable ex- penses for the company's coach and team, etc. SIMPLE MINE ACCOUNTING 45 The "General expense" is distributed pro rata against each mine at end of month, according to tonnage produced. Presuming that San Juan produced 500 tons, San Pedro and San Marcos each 250 tons, the proportions would be 50 per cent, 25 per cent, and 15 per cent re- spectively. Seeing this, however, that only San Juan is producing, the other mine being under construction, the latter are assessed with a fixed arbitrary quota of 15 per cent each, leaving 70 per cent for the pro- ducing mine of San Juan. MATERIAL ACCOUNT Should be charged with all expenses pertaining to this account, against each particular shipment received. HOSPITAL FUND All disbursements for sick benefit, funeral ex- penses, stationery, doctor's salary, etc. "HOTEL" This account if kept by the company is admin- istered as a separate one. Usually cook's wages, fuel, oil, and first cost of all kitchen and dining-room uten- sils, rooms, etc., are furnished free. Against the account are charged all comestibles (exclusive of in- toxicating beverages) all additions to and replacing of breakages, etc. The account is balanced at end of each month by deduction from men's pay according to number of meals eaten. This distribution of accounts may be modified or amplified as found to be necessary. So far we have dealt with construction and operating accounts for the 46 SIMPLE MINE ACCOUNTING mine; other departments can be added, such as mill, cyanide, smelting, etc., and each subdivided in the manner most convenient. From the foregoing it will be comparatively easy to apportion the charges to the proper account. It may happen that on any one invoice more than one account may be represented, in which case the items covering each account should be put in one sum, repeating the operation for each separate account and all shown in red ink on the voucher. The Pay-roll too will show in the outside column the number of account, after which add the amounts for same numbers together ; when this is done add total of all the accounts to see that sum agrees with total sum of Pay-roll, then enter the correspond- ing amounts against each number in the order as shown, commencing with "Prospecting" and ending with " General Expense." After obtaining all the separate accounts make up a voucher showing each one, against each mine; one voucher form will answer for the three mines (see Fig. 19) . This method saves considerable work in making out a voucher for each mine. Adopt the same plan in making up the voucher for materials used (see Fig. 19). It may occur to some one to ask, why all this distribution? The real objects in view are, to find out what certain work costs, if men are being paid too much per day, whether it is cheaper to work by contract or day's pay, if part or all of labor or materials can be dispensed with, whether suitable labor-saving devices should be installed, etc. These and many other things can be ascertained from a proper system of mine accounting. In saying this, however, it should be borne in mind that a system can become "top-heavy," i.e., be cumbersome and SIMPLE MINE ACCOUNTING Fig. No. 19 47 No. 12 Charge as below Credit Material % FEDERAL MINING COMPANY to DISTRIBUTION OP MATERIALS USED IN MINES 8. JUAN 8. PEDRO S. MARCOS MAT'LS TOTAL Prospecting 23 65 23 65 Development 47 31 47 31 Stoping 402 14 402 14 Transportation 30 00 30 00 Hoisting 238 00 238 00 Laboratory 20 00 20 00 Con. Shaft 265 20 250 20 515 40 " Tramway 243 30 111 12 102 28 456 70 " Materials % 105 00 105 00 1004 40 376 32 352 48 105 00 1838 20 48 SIMPLE MINE ACCOUNTING expensive. This is a danger to guard against when commencing to operate new properties. To illustrate : A carpenter loses a chisel, value $1 ; he is sent to look for it cannot find it loss of time another $1. Tool is deducted from his pay, carpenter objects and quits work. Work held up and traveling expenses paid for another carpenter to come from nearest town - total loss to company, $45 for a chisel. In addition to the forms and books already mentioned a Journal will be required. Strictly speaking this will be a JOURNAL AND DISTRIBUTING RECORD in which will appear the whole of the operation of the mines. It should show at a glance (see Fig. 20). It will be found that certain accounts, whilst chargeable to the mine at Las Mesas, are not in reality cash trans- actions, so far as the books at the mines are concerned. For instance: The Hoist received for the San Pedro Mine, voucher No. 7, Fig. 18, was ordered shipped by the Boston office of the Federal Mining Company, who made payment for same. Boston office therefore advises the mines and the latter receive the Fraser & Chalmer invoice, showing amount in United States dollars. Seeing that books are kept in Mexican cur- rency the amount is converted into latter at the cur- rent rate of exchange and debited to the San Pedro Mine on the Debit side of Journal (see Fig. 20). On the Credit side of the Journal appear the same figures and showing to what account this Hoist was distrib- uted. By taking each voucher in the Journal (Fig. 20) separately we shall better understand the process of distribution : VOUCHER No. (1) Is a bill received for lumber and therefore is charged to material account. (2) Is a bill for hardware, comprising bolts for San Juan Mine, used in connection with the hoist; con- sequently that part of the bill is 49 50 SIMPLE MINE ACCOUNTING MONTH Fig. FEDERAL MINING JOURNAL SAN JUAN SAN PEDRO SAN MARCO HOTEL HOS- PITAL MATE- RIALS BOSTON OFFICE TOTAL DATE NAME 6 i Mex. Lumber Co., Reneckie & Co. 155 452 00 155 OC 45200 i l: 18 Nat. Explosive Co. Am. Telephone Co. Medical Supply Co. Sam Lung Fraser & Chalmers 30 Stamps, telegrams, etc. Hospital Eastern R. R. Co. 00 40C .. Cash refunded 11 Pay-roll, labor 102 50 " ;;' 75 on 37 50 ' ::' 2H 45 42945 4, 7 50 750 " emp oyees Materials used 838 20 183820 \ 31 68 25041 15 3168 5041 15 sold Drafts drawn ~102 50 ~37~ 165 Gen. expense r '/ c pro 75 00 50 00 221 95 869 88 29565 15 32026 98 SIMPLE MINE ACCOUNTING 51 No. 20 COMPANY RECORD 190 DISTRIBUTION NO. MATE- RIAL HOS- PITAL HOTEL GEN. EX PENSE SAN JDAN SAN PEDRO SAN MARCOS TOTAL Lumber, Materials 1 370 00 370 00 Bolts, Hoisting 2 10 20 C. Press, Gen. exp. 11 15 00 Rope, Con. Shaft " 36 60 6 80 Powder, Materials 3 5300 00 5300 00 Batteries, Gen. exp. 4 150 00 150 00 Cots, Hospital 5 30 00 30 00 Supplies, Hotel 6 155 00 155 00 Hoist, Con. Mach'y 7 4520 00 4520 00 Gen. exp. 8 19 05 Sick benefit " 6 00 25 05 Frt. Ch'gs Materials 9 783 70 Hoist, Con. Mach'y " 2400 00 Waste, Gen. exp. " 5 90 3189 60 .. f Materials 10 300 30 \ Prospecting Develop't .. 45 420 00 00 Sloping Hoisting Tramming Sampling 2005 560 300 75 00 00 00 00 Transport'n Laboratory Con. Shops H 149 90 2105 70 00 00 Mach'y " 1090 00 Shaft 1500 od 750 00 Tramway Gen. exp. 11 173 46 1000 00 500 00 1200 00 3200 00 14290 00 Hoisting Con. Mach'y Prospecting Develop't Sloping Hoisting Transport'n Laboratory Shaft 12 250 23 47 402 238 30 20 00 65 31 141 00; 00 ! 00 250 265 00 20 250 20 1673 46 Tramway Materials " 105 00 243 30 111 12 102 28 1838 20 13 14 rata 70%, 15%, 15% 1189 95 832 07 178 49 178 49 6859 00 209 46 155 00 8347 27 11514 81, 4517 57 31603 11 52 SIMPLE MINE ACCOUNTING charged to Distribution No. 4, which is hoisting. On the same bill is a charge of $15 for a copy- ing-press for the office, therefore same is charged to No. 9, which is General Expense. A manila rope for the shaft at San Marcos Mine is charged to Construction Shaft in the column for San Marcos. (3) Bill for powder goes to Material Account. (4) Electric batteries: this is a bill which goes to " General Expense" column. (5) Is a bill for two stretchers for Hospital Account. (6) Supplies for the Mess-house; note also on the Debit side that amount has been received. (7) This has already been referred to as bill received from and paid for by Boston office; see the Debit entry for same. (8) Is the total of petty-cash expendi- tures for the month, express, tele- grams and stamps amounting to $19.05; goes to No. 9, General Expense, and the payment of $6 for sick benefit goes to Hospital Account. (9) Is the total for month of payments to railroad and the charges are distributed to Material Account, Construction Machinery Sari Pedro Mine and General Expense. SIMPLE MINE ACCOUNTING 53 (10) Is a voucher covering the gross amount of Pay-roll after all dis- tributions have been made. (11) Is the voucher for salaries and wages of monthly employees. (12) Shows how all the entries for ma- terials used are taken up. By " used" is meant all the materials sold to contractors and used by the company employees. (13) This is a carbon copy of the bill made out against Mendez e hi jo for lumber; see Debit side. (14) Shows total sum of drafts drawn during month which has been charged to cash. A voucher should also be made out for the two items, viz., $3.25 unclaimed wages and the 75-cent refund which appears on the Debit side of Cash Book. By comparing the Cash Book with the Journal Record Book they will be found to agree, as both show a balance (which of course is cash) of $1175.96. This amount therefore is carried forward to July 1st, as: July 1st. To balance brought forward $1175.96 On the bottom line in the Journal will be found the pro rata of the total " General Expense," entered 70 per cent in the column for San Juan and 15 per cent each to San Pedro and San Marcos, LEDGER In the commercial world the Ledger is considered the most important book. Except in the matter of condensing the accounts it would be almost un- necessary to keep this book at the mines, because all the data required is to be found in the Journal. However, for the purpose of keeping a concise sum- mary of the different accounts a Ledger will be found useful. Each mine should have its own account, starting from the first payment, so that total expen- diture may be ascertained at glance. Entries should be made at end of each month, taking same from the Journal Record (see Fig. 21). A similar account for materials and hospital fund should be kept (see Figs. 22 and 23) and a General Account for the whole mines (see Fig. 24). 55 56 Dr. SIMPLE MINE ACCOUNTING Fig. No. 21 SAN JUAN MINE Cr. )()7 1907 50 To Mat 'Is pay-roll 102 .50 6 30 Operating 5498 97 ' Con. shops 2105 00 - Tramway 743 30 Dr. SIMPLE MINE ACCOUNTING Fig. No. 22 MATERIAL ACCOUNT 57 Cr. )07 1907 1 Balance on hand 6391 00 6 30 Used 1869 88 30 Received 6859 00 " Balance 11380 12 13250 00 13250 00 1 Bal. 11380 12 58 Dr. SIMPLE MINE ACCOUNTING Fig. No. 23 HOSPITAL FUND Cr. >07 1907 30 Receipts 221 9n 6 30 Disburaements 209 46 " Bal. 12 49 221 95 1 Bed. 12 49 Dr. SIMPLE MINE ACCOUNTING Fig. No. 24 GENERAL ACCOUNT 59 Cr. )07 1907 1 Cash balance 752 09 6 30 San Juan 8347 27 30 Boston office 29561 15 it San Marcos 4517 57 " Petty cash 4 00 " San Pedro 11514 81 San Juan 102 50 it Materials 6859 00 u San Pedro 75 00 (i Hospital 209 40 " San Marcos 37 50 " Hotel 155 00 It Hotel 155 00 " Bal. 1175 96 It Hospital 221 95 ^^^-" <( Materials 1869 88 _^- -""" 32779 07 32779 07 1 Bal. 1175 96 PROFIT AND LOSS Whilst the practical operation and administration of the mines does not concern itself with the Treasury Finances of the Federal Mining Company, yet imme- diately a mine commences to produce ore, it is part of the superintendent's duties to make out a statement, showing cost of production, transportation charges, treatment charge at the Smelter, or, if the ore is treated, i.e., concentrated, milled, or cyanided on the ground, the separate cost of each operation, and then show the value of ore or bullion produced. According to June statement (see Fig. 21) San Juan operation expenses amounted to $5498.97 Less credits for materials sold 102.50 or a net cost of (excluding construction charges) 5396.47 The net tonnage from San Juan during June was 500, making the actual cost per ton in round figures $10.80. Where ore is shipped to a custom smelter it is usually a matter of two or three months before returns come in; in the meantime an approximate value is placed upon the ore, based on the mine sample and assays. When Smelter results arrive the difference is taken up in the Ledger, for or against the company, at the head office. On Fig. 25 we have an example of a Smelter liquidation sheet. In Mexico, of course, there are other charges, such as Federal taxes on gold and silver; State taxes on gold, silver and lead, document stamps; etc. 61 62 SIMPLE MINE ACCOUNTING Fig. No. 25 CORRIENTES SMELTING COMPANY Liq. No. 1400 CORRIENTES, Aug. 15, 1907 IN FAVOR OF FEDERAL MINING Co. Shippers Lot 1 Smelter Lot 1400 Class Sio. Pb. WEIGHT CAR SACK GROSS H-jO NET QUOTATIONS AND PRICES 7506 8/15/07 5238 Silver .65 oz. troy 6125 Gold $19.00 " " 3209 Lead .05 Ib. av. 8650 Copper 200000 2% 196000 Assay Conditions Quot. Gold 0.30 oz. 95% 19.00 Silver 100 oz. .65 Lead 20% 90% .05 Iron 20% Unit .10 Lime 10% .10 5 61 9 2 1 41 75 00 00 00 79 16 Charges Freight and Treatment f.o.b. Las Mesas 16 00 Silica 30% Unit .15 4 50 Zinc Sulphur Arsenic 20 50 Net value per ton 58 66 Exchange @ 200 % 58 66 117 32 196000 Ibs. = 98 tons @ 117.32 = Mex. Currency $11497.36 SIMPLE MINE ACCOUNTING 63 Much more could be written, but if the writer has made the subject sufficiently clear up to this stage, his object will have been attained, as the more complex problems of mine accounting may very well be left to experts in the profession. CARD SYSTEM REFERENCE has already been made to forms used in Material Account (see Figs. Nos. 14, 15, and 16). Now, while it is not necessary to let any of the modern ideas become a craze, yet a judicious application of some recent methods is not to be despised. At many of the large operating mines to-day, where a complete assortment of tools, implements, and mate- rials is kept, the Card System is used. Briefly, this may be described by stating that all articles are listed alphabetically on cards, commencing with A and ending with Z. At outlying properties, even though operations may be, comparatively speaking, on a small scale, it is very often more economical to carry a large stock of mate- rials, such as bolts, pipes, valves, etc : Where no regular warehouse staff is kept, such articles would not go into the Material Account, here- tofore detailed in this work, but would be charged direct out to the mine or unit. Naturally, all such materials and tools would be stored in a special build- ing, under lock and key, to which only duly authorized persons have access. This is where a modified form of the Card System will be found useful. The simplest form, no doubt, is a strong loose-leaf book, preferably with an outside cover of aluminum, size about 8 in. by 5 in., with a sufficient supply of loose printed leaves, similar to 65 66 SIMPLE MINE ACCOUNTING Fig. 26. The indexing of the leaves, i.e., the letters ABC, etc., can be filled in at the mine. Some letters will require more sheets than others; all that is necessary, therefore, is simply to add the initial at top of the desired number of leaves and enter them into the loose-leaf book. The operation, so far as the details of articles are concerned, is explained on Fig. 26: August 1, 1907 date of opening the book there were on hand 50 machine bolts f in. by 1 in., cost price per 100 f. o. b. Las Mesas, $2.00 Mexican currency. On August 5 the mechanic sent in a requisition for 20 bolts this size, leaving a balance that date of 30 in the store. As this article is frequently called for an order was placed, amongst other things, on the 6th for 100, upon receipt of which, on August 25th, entry was made on the slip in the book as shown. Where an extensive supply of materials and tools is kept, it will doubtless prove more convenient to adopt the Card System outright. This means using a printed card with index letter, size and style as may be found most convenient, say 8 in. by 5 in., similar to loose leaf already described, cards to be alphabet- ically arranged in a cabinet file in the storeroom. By this method one obtains the maximum efficiency with the minimum of labor in handling stores and supplies. SIMPLE MINE ACCOUNTING Fig. No. 26 FEDERAL MINING COMPANY STOCK BOOK B 67 ARTICLE PRICE PER UNIT DATE REC'D USED ON HAND Bolts, machine, f X 1" %2.00 8/1/07 50 8/5/07 20 30 8/25/07 100 130 SHIPPING WHEN shipments of ores or concentrates are made from a mine, situated a long distance from railroad, the freighting is done either by pack animals or wagons, according to the nature of the country. Strong jute sacks are invariably employed and, where the product is high grade, the precaution is taken to have mouth of sack bound with flexible wire and sealed with lead seals. A Way-bill, similar to Fig. 27, is made out in trip- licate. Each document should be signed by the ship- per and freighter and bear on the face ORIGINAL, DUPLICATE, TRIPLICATE. The original is sent by mail to receiving agent at point of destination, duplicate is carried by freighter and the triplicate kept on file at the mine, or point of origin. This of course has reference to contracts made with outside parties to haul ores from mines to railroad, or merchandise from railroad to the mines. It will be noticed that payment is based on " Net" weight for the ore. By doing this no opportunity is given the freighter to indulge in any sharp practice in the matter of weights. For example: The gross weight at mines was 40,025 Ibs. There would be noth- ing to hinder the freighter from taking advantage of a good shower or rain, or even sprinkling the sacks with water himself, thus adding two or three tons to his load, if paid on delivery of gross weight. 69 70 SIMPLE MINE ACCOUNTING o "C W o $ SP.S CO pC H H OQ ^ CO fe *^ " ^ g W ; 6 I -t efl g 1 a 3 .3 SIMPLE MINE ACCOUNTING 71 By referring to Fig. 28 it will be seen that the same form can be used for the return trip, carrying merchan- dise from the railroad to the mines. So far we have dealt with the form used by freighter, between mines and railroad. Upon arrival at the railroad station, the forwarding agent makes a requisition for a car, after loading which either in bulk or sacks as may be found most convenient a Car Report is made out (see Fig. 29) . Four copies are made out by the forwarding agent, one is mailed to the Corrientes Smelter (this being the destination of the shipment) ; one is kept on file by the freight agent, and the other two copies, together with Bill-of -lading are sent to the Federal Mining Company's Office. Upon arrival of the documents at the mine, the superintendent affixes a rubber stamp, provided for the purpose (see Fig. 29), showing mine assays and analysis of this shipment. These data are also entered on the duplicate report to be filed in the office. The original Car Report and Bill-of-lading are sent to the representative of the Federal Mining Company, at Corrientes, who is to watch the weighing and sampling at the Smelter. It is customary to give standing instructions in writing to the mine representative at the Smelter, regarding the weighing, sampling and assaying of ores. In some instances a margin of 2 per cent would be allowed, on which a basis of settlement is arranged with the Smelter. For example: Car Report (Fig. 29) shows silver 105 ozs., the Smelter reports 101 ozs., difference of 4 ozs. By allowing a margin of 2 per cent the settlement assay would be the split assay of 103 ozs., which is accepted by the Smelter. The same process is gone 72 SIMPLE MINE ACCOUNTING p h I ^ w Q W fe 03 *i S tf _o -5 g M g o 1 J _ a i "f| i Q S "o H i la. M "^ O S r* SJ a J "2 3 -3 v JH |o 1=1 Q TO 3 1 o H CQ H B ^ 8 I I! ^ s o> S -0 S g 2 H OQ Q "5 O O TO i? O i i j| ft OB ^ 5 i S * ,rf 03 "o s *~ fa " Q Q O u, bC S _o3 O a g ID fl 03 o" H 3 PQ PH O CQ o Q O < g ** ^ p T3 ^ P3 O O ^H Q 0 ALYS1 -, 03 s s Z Q 00