serious. In the first place, it is found that they can be used as stakes
in gambling games and can also be sold or otherwise transferred by the
original drawer. This is objectionable, not merely because it is against
regulations, but also because the person who so receives the coupons is
not apt to draw coupons of his own, thus tending to curtail the amount
of coupon sales transacted by the Exchange. This transferring of coupons
can be accomplished in several ways. In large garrisons it will take a
little time before the clerks will know each man by sight, especially
when there is an influx of recruits. If a customer is not known to the
clerks, he might be able to use another soldier’s coupon book unless
the clerk should require him to write his name and compare it with the
signature on the book presented. This would be impracticable at certain
times of the month when the coupon sales were heavy, as it would consume
too much time, thus preventing the clerks from waiting upon other
customers as promptly as they should. It is evident that this kind of a
transfer could be effected with _any_ kind of coupons, and there is no
preventive except to have the clerks become acquainted with every man in
the garrison at the earliest practicable moment. When there is time, the
clerks should, in doubtful cases, require the customer to write his name
and then compare it with the name signed on the book. All clerks should
understand that when any person presents a coupon book not his own the
book is forfeited to the Exchange and the occurrence is to be reported to
the Exchange Officer.
Another way in which coupons can be transferred (unless each coupon is
numbered to correspond to the cover) is as follows:—Private A borrows
from Private B fifty cents in cash and gives him a dollar coupon book in
exchange. Private B removes the staple which binds this book together,
takes the book apart and throws away the cover. He then loosens the
staple in a book which he himself has drawn at the Exchange and carefully
inserts enough of the loose coupon sheets from A’s book to fill it up
again, and bends the staple back into its original position. This scheme
is of wider prevalence than most Exchange Officers would imagine, and it
is very hard to detect.
Another fault to be found with the coupon book lies in the possibility of
there being a wrong number of sheets of coupons in it. Printers are but
human and it sometimes happens that there are too few or too many coupons
in a book. Unless this is detected before issue, it causes an error in
our statement of coupons outstanding. To prevent this, it is necessary to
examine each book before issuing it, (even before handing them over to
the coupon clerk), a tedious operation, one which consumes unnecessary
time and labor.
In most Exchanges, the conviction sooner or later arises that there are
coupons outstanding of which the Exchange has no record. This may occur
through the suspicion that some person has acquired coupons in some
unauthorized manner. When such cases arise, it is customary to place the
Exchange Officer’s signature on the backs of the coupons or to employ
some secret mark. This is a laborious and expensive operation and should
not be resorted to unless necessary. In justice to our printers, be
it said that they use every endeavor to prevent coupons from falling
into unauthorized hands, but Exchange Officers, if inexperienced, do
not always appreciate the importance of taking like precautions. All
coupon books should be kept in a place that is absolutely secure, and
nobody should have access to same, except the Exchange Officer himself.
He should use every effort to prevent a single book from reaching his
customers except in the regular way. He should take from the coupon vault
only enough books to supply the demand, and they should be carefully
accounted for by the clerk who issues them to the men.
Some Exchange Officers use a fac-simile stamp instead of countersigning
each book in person. If this is done, the stamp should be most carefully
guarded, and kept in the personal possession of the Exchange Officer.
When the stamp is made, there should be incorporated in it, some secret
mark, otherwise, any person could secure another similar stamp, to the
possible loss of the Exchange. This secret mark should be in the nature
of a double instead of a single period or some other inconspicuous mark
that would probably not “take” well should any person attempt to produce
a second fac-simile from an impression of the genuine stamp.
The second type of coupon, shown in Fig. 14, corrects some of the faults
of the coupon book. In the first place, it is much cheaper, the first
order being about one-half and subsequent orders costing about one-third
of the price of the coupon books. This is an important saving because the
cost of coupons is a dead loss to the Exchange, and if a satisfactory
coupon can be obtained at a low cost, it should be used as a matter of
course, and the overhead charges correspondingly reduced.
[Illustration: Figure 14.]
As will be noted, these coupons consist of a single sheet of stamps or
coupons, separated by slot perforations, the whole sheet containing
twenty 5c coupons. Considerable experience in this line prompts the
statement that no real advantage is gained by having coupon books
of denominations higher than one dollar. The style of coupon here
illustrated makes a virtue of this fact and all slips are ordinarily made
in the one dollar denomination only. In counting up the coupons after the
day’s work, we know that, regardless of colors, each coupon represents
5c. Another beauty of the scheme is that it is practically impossible
to have strips containing a wrong number of coupons, the method of
manufacture almost precluding such a possibility, thus obviating the
laborious checking process. Still another advantage is that the whole
dollar’s worth of coupons is printed on a single piece of paper, thus
preventing any addition to its value, as is possible with the book when
partially depleted. One might think that the smaller size of these
coupons would make them hard to handle and count, but an officer of
considerable experience in this line of work states that by using the
rubber end of a pencil they can be counted with more facility than can
the other style of coupons. Some Exchanges would probably require each
strip to have attached to it a detachable stub on which the soldier would
be required to receipt for the coupons and also promise to pay for them
at next pay day. In this case, as in the case of the coupon books, such
practice merely adds unnecessary work and serves no useful purpose. On
pay-day, we should have to handle one such stub for every dollar’s worth
of coupons that each soldier had drawn; each of these stubs or cards
would then have to be stamped “Paid” and returned to the soldier. This is
not an efficient method.
Whichever style of coupon is decided upon for use should be printed on
stock of various colors and coupons of one color only should be issued
until it is desirable to have a check on our outstanding coupons. (Of
course, if the books are used, it will be necessary to have the 5c and
the 10c coupons of different colors.) The color should then be shifted
and when coupons of the old color cease appearing, we can arrive at an
approximate check on our outstanding coupon account. We say “approximate”
because it sometimes happens that a man puts away a whole or a partially
used book in a garment and thus inadvertently retires it from circulation
for a space of time that may stretch into months. Of course, this could
be prevented by issuing a notice that all coupons must be presented
before a certain time, and that after that time, no coupons of the old
colors would be accepted. This would give us a fresh starting point as
regards our outstanding coupons, but such a proceeding should be resorted
to only under the most serious circumstances, because it savours somewhat
of a person refusing payment on a draft. When, however, there is good
reason to believe that our Coupons Outstanding account is incorrect, such
a step should be taken immediately, as it is about the only practical way
in which we can correct the account—a very important one.
Regulations Concerning Coupons.
Before explaining at length the system of handling coupon sales advocated
herein, it may be well to examine the regulations with which we must
comply. First, comes par. 15, G. O. 176, W. D., 1909, which reads as
follows:—
“15. _Sales on Credit._ When the commanding officer and council
are agreed that it is to the true interest of the command,
the former may authorize a credit at the exchange to any
soldier in good standing to an amount not exceeding in any
one month one-third of his monthly pay. This will be given
upon the request of the soldier, in writing, approved by his
company commander, and these credit checks will be carried
on the accounts of the exchange as “bills receivable” until
paid. Soldiers granted credit will be distinctly informed
that they must make prompt and unsolicited payment to the
exchange officer on next pay day. Defaulters will be debarred
the privileges of the exchange and are liable to trial and
punishment. It is the duty of the soldier who has been given
credit to pay the amount as soon as he receives his pay,
and the exchange officer will be present at the place of
payment to receive the money or make such arrangements as
will facilitate the payment. Credit will not ordinarily be
extended to a soldier between the date of last payment on rolls
before discharge and the date of discharge. When the debt has
remained unpaid one pay day on which the soldier was paid a
balance sufficient to discharge such debt and no other means
of collection is practicable, the exchange officer will notify
the company or detachment commander, who will note the amount
on the next pay rolls as “Due Post Exchange —— ——” and on
succeeding rolls until the debt has been collected, or until it
is apparent that it can not be collected, when the credit check
will be turned over to the company or detachment in lieu of so
much cash at the next distribution of profits as provided in
paragraph 17.”
In the opinion of many, it is unfortunate that an arbitrary limitation
of credit has been fixed as shown in the first sentence of the above
quoted paragraph, as it tends to work a hardship upon some of our most
valuable soldiers. Most of our older non-commissioned officers and N.
C. staff officers are married and spend most of their pay for articles
that are carried in stock by well equipped Exchanges, such as meats,
groceries, etc. It is not always convenient or even possible for them
to pay cash for purchases, and there is no doubt that they would do a
much larger business with the Exchange if greater credit were allowed
them. It is a well established custom to extend reasonable credit to all
commissioned officers; it would seem but just to extend a proportionate
amount of credit to such N.C.O.’s as might be vouched for by their
respective organization commanders. It is hoped that this limitation
may be modified, but until that occurs, the Exchange Officer has no
discretion in the matter and should be careful to avoid any infraction of
the general rule.
The second sentence of par. 15 also merits more than a passing glance.
It requires a previous request “in writing” by the soldier before credit
coupons can be issued him, and the request must be approved by his
company commander. It is not specifically stated that this request must
be renewed every month, nor is the writer aware that this point has ever
been decided. We may, therefore, assume, when any man has once made this
written request, that credit to the amount of one-third of his monthly
pay be extended to him, that he need not formally renew this request
monthly. Should this interpretation prove fallacious, we must have the
consolidated request (Form 25, to be described hereafter) signed by the
men monthly. If this is done, the list should be signed at the same time
as the pay rolls, to save trouble for the men. It is found that when
there is an unnecessary amount of “red tape” connected with the operation
of securing credit coupons, the men will (perhaps unconsciously) tend to
shun the process, with consequent loss of business to the Exchange. There
is every reason why we should make it as easy as possible for everybody
to transact business with the Exchange and any unnecessary stumbling
blocks should be carefully searched out and removed. The Exchange should
be run on the same general principles which govern a civilian store, and
if the latter subjected its customers to petty annoyances of any kind, it
would soon be driven out of business by lack of trade.
Returning to paragraph 15, it might be remarked that perhaps the best way
in which the men can be “distinctly informed that they must make prompt
and unsolicited payment”, is by incorporating this statement on the
receipt which they sign when the coupons are issued to them. Beside the
other matter contained in par. 15, we should note par. 13 and par. 14 (c)
and (e) of the same order. They read as follows:—
“13. _Checks or Coupons._ The use of checks or coupons representing
values, and exchangeable for merchandise or other charges at the
exchange, is _encouraged_ merely; but care should be taken that these
checks are not disposed of to unauthorized persons, and to provide
against this, they should never be redeemed in cash. When permitted by
the commanding officer, they should be sold by the exchange officer and
regarded as a liability until redeemed.
“The coupon-book system of extending credit to enlisted men will be used
by all exchanges conducted at posts where more than two organizations are
stationed, except at temporary stations and at places where conditions of
service have made it impracticable to procure the coupon books.
“These coupon books will bear the name of the enlisted man to whom issued
and will be honored at the exchange only when presented by the enlisted
man whose name appears on the book.”
“14 (c). _Bills Receivable (Enlisted Men)._—To show the value of checks
issued to enlisted men, and the amount of cash received from them in
payment of their due bills. When checks are issued, the entry will be
‘Cash, Dr. to Bills Receivable.’ The difference between the two sides of
the account will show the amount of due bills on hand unpaid.” (Par. II,
G. O. 201/09.)
“14 (e). _Check Account._—To show the amount of checks outstanding. When
the checks are issued, this account will be credited as above, thus,
‘Bills Receivable, Dr. to Checks.’ The amount of checks received each day
for merchandise will be charged to the account, thus, ‘Checks, Dr. to
Merchandise.’ The difference between the two sides will show the amount
of checks outstanding.”
Note that the outstanding coupons are a _liability_, as they may be
presented as a claim against the Exchange at any time. Of course, the
receipts which the men have given us for these coupons, in other words,
their notes promising to pay us for the coupons, are an _asset_ and
should be carried under Bills Receivable. Some Exchanges call such assets
“Bills Receivable, Credit Coupons”, thus differentiating them from such
as Bills Receivable, Charge Accounts or Bills Receivable, Laundry Coupons.
Paragraph 14 (c) and (e) translated into non-technical language simply
means that when we issue coupon books of a certain value to the men,
we must enter this amount on the left hand or debit side of our
“Bills Receivable” account in the Ledger, thus charging up “Mr. Bills
Receivable”, as it is sometimes explained, with a certain amount for
which he must account. Now, as the Ledger is to be kept according to
the double entry system, we must obey the fundamental principle of this
system, which is, “for every account that is charged (debited) a certain
amount we must credit some other account with the same amount”, hence
the name, double entry. In view of these facts, therefore, we turn to
our Check Account—or Outstanding Coupons, if you prefer to call it so,
and _credit_ this account with the same amount that we charged against
Bills Receivable. When we receive the cash for the men’s notes at pay
day, we _credit_ “Mr. Bills Receivable” with the amount taken in, thus
clearing him of this amount and making him no longer responsible for it.
We have previously, of course, entered this amount on the debit side
of the Cash Book, for the same reason noted above. When the coupons
are presented by the men in payment for articles purchased by them, we
_credit_ “Merchandise” (or the proper department of the Exchange, if
departments are used) with the amount taken in. This, for the reason that
said department is no longer accountable for that amount of merchandise;
we must, therefore credit that department with the proper amount and
charge or debit it against the outstanding coupon or Check account. It
must be remembered that outstanding coupons are a liability against us
and are in the nature of bills payable—except that they are payable only
in merchandise. Hence, if we consider this account as a living person—one
of our creditors—it will appear more logical when we place to his credit
everything we owe him, i. e., the coupons we have given him, and to
charge him the value of the merchandise he has obtained from us in return.
The above prolix explanation will sound puerile to an experienced
accountant; it is not written for him, but for the inexperienced man with
little or no knowledge of scientific book-keeping, who is trying to work
this system or one like it. The writer knows from bitter experience how
hard it is to avoid some of the unexpected pit-falls of double entry.
Now we are in a position to describe the manner of handling our coupon
sales, starting from the very beginning.
Issuing Coupons.
[Illustration: Figure 15. (Reduced in size)]
The first thing to be done is to have the various organizations submit
their lists of men who are entitled to credit at the Exchange. This is
usually done a few days after pay day, it being the excellent custom in
most Exchanges to issue no coupons until about five days after, in order
to attract some of the cash that is apt to be plentiful for only a few
days. One of the best forms for such a list known to the writer is Form
25, shown in Fig. 15. It measures 9 × 20 inches and may be punched to
fit a loose leaf file. It is faint ruled horizontally six lines to the
inch in order to fit typewriter spacing. The length of this form enables
a whole company of 110 men to be entered on its face, without resorting
to the necessity of turning a page. In garrisons where the organizations
are uniformly smaller, the length of the form can be correspondingly
reduced. Each organization fills out one of these sheets on a typewriter,
entering the names of the men in pay roll order in column 3. In column 2
is entered the rank of each man, and in column 4 is entered the amount
of credit he desires, which must not exceed one-third of his pay. The men
sign their names in column 1 and in space A is printed the statement to
which they subscribe—that they request credit to the amount of one-third
of their pay and that they promise to pay for their coupons on the pay
day after drawing same, etc. This list is then sent to the Exchange at
the regular time, preferably a day or two before coupons are to be issued.
There is a point in this connection that sometimes causes trouble, due to
the fact that pay day never comes on the first of the month. There are
two ways of handling the situation. The first is to have the companies
submit their lists to the Exchange on the first of the month and the
Exchange issue coupons on this authority until the last of the same month
with the exception of the five days after pay day, during which time,
no coupons are issued. The men pay for the coupons on the pay day which
occurs in the succeeding month. The principal objection to this method is
that if a man draws his full allowance of coupons on or near the first of
every month, he would, if he deserted a few days before pay day, cause
the Exchange a loss of _twice_ his monthly allowance. The second way of
proceeding obviates this defect: it consists in having the companies
submit their lists a few days after each pay day. The Exchange issues
coupons on this authority and all of these coupons are supposed to be
paid on the pay day which winds up this period. Therefore, it is seen
that the Exchange runs a smaller chance of loss, or rather, the chances
are that the loss will be smaller.
[Illustration: Figure 16, Actual size]
Upon receiving these lists, the coupon clerk at the Exchange takes a
supply of Form 19, shown in Fig. 16, and enters the names of the men at
the top of these cards, one card for each man who is entitled to credit.
This work can be done at odd moments during the month. It is also a good
plan to enter the amount of credit to which the man is entitled. This
data should be entered at the very top of the card where it will catch
the eye. These cards are 3 × 5 inches, specially printed; they fit into
the filing cabinet, to be described later. One standard drawer 15½ inches
long will hold enough cards to take care of a six company post. The cards
should be of fairly good writing stock, but no thicker than is necessary
to insure ease of handling. They can be obtained from any job printer,
but care should be exercised that they measure precisely 3 × 5 inches,
otherwise, they will prove very troublesome to run over rapidly in the
drawer, because some will be larger than others. Plain cards of this
size can be bought at $1.50 per thousand from regular dealers. All cards
pertaining to any one company are behind an index card bearing on its
tab the designation of that company. It is also a convenience to have a
set of alphabetical guides for each company, as they facilitate finding
and filing the cards. After any of these cards receives a record, it is
highly important that it not be lost or stolen, so the drawer containing
them should be locked except when actually in use. When any man applies
for coupon books at the Exchange, he signs his name in the space provided
on the card, the clerk adds his own initials as witness, stamps in the
date and enters in ink or indelible pencil (or preferably by means of
a rubber stamp) the amount of the coupons issued. If the clerk does
not recognize the man, he compares his signature with the same man’s
signature on Form 25, which he should have near him for this purpose and
to see that the man does not overdraw his allowance. He also requires the
man to sign his name on the stub of the coupon slip or the cover of the
coupon book issued. In addition, the clerk should have at hand a strip of
paper on which he has entered in rotation along the left hand margin the
serial numbers of the coupons he has on hand. Such a strip can be struck
off on the adding machine. As coupons are issued, the clerk should enter
opposite each number, the name of the man to whom it was issued. He can
do this while the man is signing the coupons, so no time is wasted. In
the evening, this strip is given to the Steward or cashier and the total
value of coupons issued is entered in the proper place on the Steward’s
daily report (Form 4, Fig. 5). The record of this strip is checked by
comparison with the number of coupons left in the possession of the
coupon clerk.
It is found in practice that Form 19 contains sufficient space for noting
the transactions of any month, for very few men will draw coupons as many
as six times during the month. It will be noted that this scheme does not
contemplate restricting the men to but one drawing during the month, as
is the practice in some places. The Exchange loses trade by such methods,
and much better results are obtained by permitting the men to draw when
they please.
When the end of the month arrives, the coupon clerk disregards it by
continuing to use the same set of cards right along until 24 hours
before pay day occurs. (It should be understood by the whole garrison
that no coupons will be issued during this time, in order to allow the
coupon clerk to work up his pay table collection sheets). By means of an
assistant, the coupon clerk transfers the total of the coupons shown on
each Form 19 to column 10 on Form 25 opposite the name of the man to whom
that particular Form 19 refers. As fractional parts of a dollar are not
issued, $5.00 can be abbreviated to “5”. At the same time, the coupon
clerk reads off the totals of any unpaid cards that have been carried
from the preceding month, these figures being entered in the same manner
in columns 5, 6 or 7, as the case may be. It will be noted that these
cards have no place for “brought forward” entries. This is unnecessary
labor and is therefore omitted. It is no argument against such a practice
to ask what would happen if one of the old unpaid cards became lost,
because we might ask the same question concerning the current cards. The
answer lies in the fact that the checking system will take care of such
cases. In this instance, columns 5, 6 and 7 are checked back to the Forms
25 pertaining to the preceding month.