Removing the cause; [News items];

              50 HASKINS & SELLS July
Removing the Cause
CONSIDERABLE interest has been
manifested of late in the subject of
commercial arbitration. Boards of trade
and chambers of commerce have interested
themselves in the matter and carried on a
considerable amount of propaganda in
favor of such procedure. It is, of course,
unavoidable that differences and disagree­ments
will arise in the great volume of com­mercial
relations and transactions which
are constantly being formed and taking
place. Many such disagreements result
in litigation, which is not only costly and
time-consuming in itself, but results in
secondary losses of time and temper which
are not only expensive but disagreeable.
The Merchants Association of New York
points out in a memorandum on the subject
that commercial arbitration is the logical
substitute for litigation. It provides that
business disputes shall be submitted to
committees of impartial business men,
which action may be provided for either
in the original contract or later mutual
agreement. The arguments advanced in
favor of commercial arbitration are that it
offers a medium of settling business con­troversies
by men who are essentially ex­perienced
in business affairs. Although
probably unpopular with lawyers, it saves
the expense of lawyers' fees and court
costs. The claim is also made that it
saves loss through the tying up of work
and merchandise. Further, it avoids the
law's delays and the creation of animosities,
and leaves both parties satisfied that the
settlement has been reasonable and fair.
At the risk of being charged with selfish
motives, it is perhaps not inappropriate to
point out that the necessity for much
litigation, and even commercial arbitration,
would be removed if accountants, as well
as lawyers, were to be consulted in the
drawing of contracts which relate to busi­ness
affairs and commercial transactions.
Many disputes have arisen as a result of
an attempt to employ technical verbiage
in contracts, with the result that logical
interpretation has been almost impossible.
The accountant is usually called into the
situation after the trouble has arisen, and
the opinion is ventured that a majority of
the disputes would never have arisen had
accountants been retained when the agree­ments
were made.
A recent case involving a difference of
about $200,000 was made possible because
the contract between the two parties,
while referring to the amortization of a
franchise and depreciation of physical
property, did not provide the methods
whereby these calculations should be made.
As there are various methods of amortizing
franchises and computing depreciation, it is