Rejoinder to criticism of foreign exchange solution;

              Bulletin HASKINS & SELLS 81
Rejoinder to Criticism of Foreign Exchange Solution
WE cannot fail to be impressed with the
thoroughness and scholarly character
of the criticism by our London office of our
solution to the problem on Foreign Ex­change,
which problem and solution ap­peared
respectively in the February and
April numbers of the BULLETIN.
"We agree," runs the criticism, "that it
is an excellent problem, but having consid­ered
it in the light of our experience in
foreign exchange accounting, we find cer­tain
features, both in the problem itself and
the solution, which do not appear to con­form
with actual practice." The criticism
goes on to state that no instance has ever
been encountered in the experience of the
critic where the entries have been made
concurrently in parallel columns in two
kinds of currency.
In this connection, it occurs to us to
point out that the experience of any one,
no matter how broad or extensive, is a
dangerous basis from which to draw gen­eralizations.
Various cases are known
where the accounts have been kept concur­rently
in two kinds of currency. Thus is
the argument of the critic broken down and
the use of generalizations questioned, un­less
they result from the examination of a
sufficient number of cases to make possible
statistical results.
We agree that the labor of carrying
accounts in parallel columns in two kinds
of currency would be great if the volume
of transactions were to be large. It does
seem, howeyer, that the desirability of such
practice would depend largely upon the
circumstances in the case and in certain in­stances
might be indicated.
In the concern under consideration, for
example, there would seem to be no neces­sity
for the use of figures dealing with peso
currency in the New York books. Like­wise,
in the case of the Chilean books, there
would appear to be no reason for carrying
the accounts, except that with the New
York office, in U . S. dollars. It does seem,
however, when the account current to
be rendered to the New York office is pre­pared,
that it would facilitate the work of
the latter if the entries were to be shown
in both pesos and U . S. dollars.
Where there are current transactions be­tween
two houses, where foreign currency