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 1-1
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
Short Exercises

SE1. Accounting Concepts

1. b 4. b
2. c 5. a
3. a

SE2. Forms of Business Organization

1. a 4. c
2. c 5. a
3. b 6. c

SE3. The Accounting Equation

1. Assets = $240,000
2. Owner's Equity = $144,000
3. Liabilities = $200,000

SE4. The Accounting Equation

1. Assets = Liabilities + Owner's Equity

$240,000 = $90,000 + Owner's Equity
$240,000 – $90,000 = $150,000
Owner's Equity = $150,000
2. Assets = 0.2 Assets + $40,000
Assets – 0.2 Assets = $40,000
0.8 Assets = $40,000
Assets = $40,000 / 0.8
Assets = $50,000
Liabilities = $50,000 × 0.2 = $10,000

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© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 SE5. The Accounting Equation

1. Beginning: $ 90,000 = Liabilities + $50,000

Liabilities = $ 40,000
$ 90,000 = $ 40,000 + $50,000
Change: + 30,000 + 5,000
$120,000 = $ 45,000 + Owner's Equity
End: Owner's Equity = $ 75,000
2. Beginning: Assets = $100,000 + $96,000
Assets = $196,000
$196,000 = $100,000 + $96,000
Change: + 40,000 – 30,000
$236,000 = $ 70,000 + Owner's Equity
End: Owner's Equity = $166,000

SE6. The Accounting Equation and Net Income

Net income = $108,000

Beginning of year:
Assets = Liabilities + Owner's Equity
$280,000 = $120,000 + $160,000

During year:
Investment $ 40,000
Withdrawals 48,000
Net Income* 108,000

End of year:
$400,000 = $140,000 + $260,000

*($260,000 – $160,000) – $40,000 + $48,000 = $108,000

SE7. Preparation and Completion of a Balance Sheet

Manteno Company
Balance Sheet
June 30, 2014
Assets Liabilities
Cash $11,600 * Wages payable $ 1,400
Accounts receivable 3,200 Total liabilities $ 1,400
Building 44,000
Owner's Equity
Owner's capital 57,400
Total liabilities and
Total assets $58,800 owner's equity $58,800

*$58,800 – $3,200 – $44,000 = $11,600

1-3
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
SE8. Preparation of Financial Statements

Randall Company
Income Statement
For the Year Ended December 31, 2014
Revenues:
Service revenue $4,800
Expenses:
Total expenses 2,450
Net income $2,350

Randall Company
Statement of Owner's Equity
For the Year Ended December 31, 2014
Owner's capital, December 31, 2013 $ 500
Net income for the year 2,350
Subtotal $2,850
Less withdrawals 410
Owner's capital, December 31, 2014 $2,440

Randall Company
Balance Sheet
December 31, 2014
Assets Liabilities
Cash $1,890 Accounts payable $ 450
Other assets 1,000 Total liabilities $ 450

Owner's Equity
Owner's capital 2,440
Total liabilities and
Total assets $2,890 owner's equity $2,890

SE9. Accounting and Business Enterprises

1. g 6. i
2. f 7. d
3. b 8. a
4. c 9. j
5. e 10. h

SE 10. Ethics and Accounting

1. b 3. d
2. a 4. c

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© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 Exercises: Set A

E1A. Business Transactions

1. No, this is not a business transaction because no economic exchange has taken
place.
2. Yes, this is an expense of the business.
3. Yes, this is an expense of the business.
4. Yes, this is an expense of the business (assuming that Austin intends to repay the
loan).

E2A. Accounting Concepts

1. c 6. b
2. c 7. a
3. b 8. a
4. a 9. c
5. b 10. a

E3A. Money Measure

Company Sales
Abril Chip 2,000,000 × 1.000 = $2,000,000
Dao 5,000,000 × 0.130 = $650,000
Aiko 350,000,000 × 0.012 = $4,200,000
Orca 3,000,000 × 1.320 = $3,960,000

Company Assets
Abril Chip 1,300,000 × 1.000 = $1,300,000
Dao 2,400,000 × 0.130 = $312,000
Aiko 250,000,000 × 0.012 = $3,000,000
Orca 3,900,000 × 1.320 = $5,148,000

Aiko is the largest in terms of sales and Orca is the largest in terms of assets.

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© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
E4A. The Accounting Equation

1. Assets = Liabilities + Owner's Equity

$400,000 = Liabilities + $155,000
Liabilities = $245,000
2. Assets = Liabilities + Owner's Equity
Assets = $72,000 + $79,500
Assets = $151,500
3. Assets = 1/3 Assets + $160,000
2/3 Assets = $160,000
Assets = $240,000
Liabilities = 1/3 × $240,000 = $80,000
4. Beginning: $275,000 = Liabilities + $150,000
Liabilities = $125,000
$275,000 = $125,000 + $150,000
Change: + 75,000 – 22,500
$350,000 = $102,500 + Owner's Equity
End: Owner's Equity = $247,500

E5A. Owner's Equity and the Accounting Equation

1. Net income is: $6,250

Assets = Liabilities + Owner's Equity
End: $275,000 = $162,500 + $112,500
Beginning: 175,000 = 68,750 + 106,250
Net income $ 6,250

2. Net income is: $33,750

Change in owner's equity $ 6,250
+ Owner's withdrawals 27,500
Net income $ 33,750

3. Net loss is: $(10,000)

Change in owner's equity $ 6,250
– Owner's investments 16,250
Net loss $(10,000)

4. Net income is: $21,250

Change in owner's equity $ 6,250
+ Owner's withdrawals 27,500
$ 33,750
– Owner's investments 12,500
Net income $ 21,250

1-6
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 E6A. Identification of Accounts

1. a. A 2. a. IS
b. L b. BS
c. A c. IS
d. OE d. BS
e. A e. IS
f. L f. BS
g. A g. OE

E7A. Preparation of a Balance Sheet

Oxford Services Company

Balance Sheet
December 31, 2014
Assets Liabilities
Cash $ 25,000 Accounts payable $ 50,000
Accounts receivable 62,500 Total liabilities $ 50,000
Supplies 12,500 Owner's Equity
Building 112,500 J. Oxford, capital 212,500
Equipment 50,000 Total liabilities and
Total assets $262,500 owner's equity $262,500

1-7
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
E8A. Preparation and Integration of Financial Statements

Dukakis Company
Income Statement
For the Year Ended December 31, 2014
Revenues:
Service revenue $13,200
Expenses:
Rent expense $1,200
Wages expense 8,340
Advertising expense 1,350
Utilities expense 900
Total expenses 11,790
Net income $ 1,410

Dukakis Company
Statement of Owner's Equity
For the Year Ended December 31, 2014
Owner's capital, December 31, 2013 $1,000
Investments by K. Dukakis 1,240
Net income for the year 1,410
Subtotal $3,650
Less withdrawals 700
Owner's capital, December 31, 2014 $2,950

Dukakis Company
Balance Sheet
December 31, 2014
Assets Liabilities
Cash $1,550 Accounts payable $ 450
Accounts receivable 750 Total liabilities $ 450
Supplies 100 Owner's Equity
Land 1,000 Owner's capital 2,950
Total liabilities and
Total assets $3,400 owner's equity $3,400

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© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 E9A. Statement of Cash Flows

Arlington Service Company

Statement of Cash Flows
For the Year Ended December 31, 2014
Cash flows from operating activities:
Net income $ 32,500
Adjustments to reconcile net income to net
cash flows from operating activities:
Increase in accounts receivable $ (7,800)
Increase in accounts payable 11,700 3,900
Net cash flows from operating activities $ 36,400
Cash flows from investing activities:
Purchase of equipment $(117,000)
Net cash flows used by investing activities (117,000)
Cash flows from financing activities:
Borrowings from bank $ 78,000
Owner's withdrawals (19,500)
Net cash flows from financing activities 58,500
Net increase (decrease) in cash $ (22,100)
Cash at beginning of year 55,900
Cash at end of year $ 33,800

E10A. Statement of Owner's Equity

Mrs. Shah's Cookies

Statement of Owner's Equity
For the Year Ended January 31, 2014
Owner's capital, January 31, 2013 $102,403
Net income for the year 57,087
Subtotal $159,490
Less withdrawals —
Owner's capital, January 31, 2014 $159,490

Owner's equity represents the claims by the owner of a business to the assets of the busi-
ness. It is affected by the owner's investments in and withdrawals from the business and
by the business's revenues and expenses.

The owner of Mrs. Shah's Cookies may have decided not to make any withdrawals because
she wanted to use the funds for other purposes such as to finance the company's growth
or pay off debt.

1-9
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
E11A. Preparation and Integration of Financial Statements

Net income links the income statement and the statement of owner's equity. The ending
balance of owner's equity links the statement of owner's equity and the balance sheet.

Thus, start with (c), which must equal $3,000 (check: $29,000 + $3,000 – $2,000 = $30,000).
Then, (b) equals (c), or $3,000. Thus, (a) must equal $8,100 (check: $11,100 – $8,100 =
$3,000). Because (e) equals $30,000 (ending balance from the statement of owner's
equity), (f) must equal $46,000 (check: $16,000 + $30,000 = $46,000). Finally, (d) must
equal (f), or $46,000.

E12A. Users of Accounting Information and Forms of Business Organization

People who are interested in Avalon's financial statements are the following:
● Management
● Investors (owners of the company)
● Creditors
● Tax authorities
● Regulators
● Employees
● Customers
● Economic planners
A partnership is a business that has two or more owners. A corporation is a business unit
that has been granted a charter from the state and is legally separate from its owners
(stockholders). A major advantage of the corporate form of business over the partnership
is that the stockholders' liability is limited to the amount of the stockholders' investments
in the company, whereas the personal assets of partners can be called upon to pay the
obligations of a partnership. Also, the transfer of ownership is easier with the corporation
because the shares owned by a stockholder can be sold to another party. When owner-
ship of a partnership changes, the partnership must be dissolved and another one formed.

E13A. The Nature of Accounting

1. b 5. l 9. c
2. k 6. f 10. d
3. g 7. a 11. e
4. i 8. j 12. h

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© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 E14A. Accounting Abbreviations

CPA: Certified Public Accountant

IRS: Internal Revenue Service
PCAOB: Public Company Accounting Oversight Board
GAAP: Generally Accepted Accounting Principles
FASB: Financial Accounting Standards Board
SEC: Securities and Exchange Commission
GASB: Governmental Accounting Standards Board
IASB: International Accounting Standards Board
IMA: Institute of Management Accountants
AICPA: American Institute of Certified Public Accountants

E15A. Ethics and Accounting

1. a
2. c
3. b
4. e
5. d

Note to Instructor: Solutions for Exercises: Set B are provided separately on the Instructor's
Resource CD and website.

1-11
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
Problems

P1. Preparation and Interpretation of Financial Statements

1. IS Utilities expense BS Accounts payable

BS Building IS Rent expense
BS/OE Owner's capital OE Withdrawals
IS/OE Net income IS Fees earned
BS Land BS Cash
BS Equipment BS Supplies
IS Revenues IS Wages expense
BS Accounts receivable

2. The income statement is most closely associated with the goal of profitability.

P2. Integration of Financial Statements

1. Set A Set B Set C

Income Statement
Revenue $1,100 $ 6,800 (g) $240
Expenses 800 (a) 5,200 160 (m)
Net income $ 300 (b) $ 1,600 (h) $ 80
Statement of Owner's Equity
Beginning balance $2,900 $24,400 $340
Net income 300 (c) 1,600 80 (n)
Less withdrawals 200 — (i) 40 (o)
Ending balance $3,000 $26,000 (j) $380 (p)
Balance Sheet
Total assets $4,600 (d) $31,000 $380 (q)
Total liabilities $1,600 $ 5,000 $ — (r)
Owner's capital 3,000 (e) 26,000 (k) 380
Total liabilities and owner's equity $4,600 (f) $31,000 (l) $380

2. The income statement must be prepared first because the amount of net income is
necessary to determine the ending balance of owner's capital. The statement of
owner's equity is prepared second because it provides the ending balance of the
owner's equity for the balance sheet, which is prepared last.

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© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 P3. Preparation and Interpretation of Financial Statements

1. Fuel Designs
Income Statement
For the Year Ended December 31, 2014
Revenues:
Commission sales revenue $400,000
Expenses:
Commissions expense $225,000
Marketing expense 20,100
Office rent expense 36,000
Supplies expense 2,600
Telephone and computer expenses 5,100
Wages expense 32,000
Total expenses 320,800
Net income $ 79,200

Fuel Designs
Statement of Owner's Equity
For the Year Ended December 31, 2014
Owner's capital, December 31, 2013 $ 64,300
Net income for the year 79,200
Subtotal $143,500
Less withdrawals 33,000
Owner's capital, December 31, 2014 $110,500

Fuel Designs
Balance Sheet
December 31, 2014
Assets Liabilities
Cash $ 71,700 Accounts payable $ 3,600
Accounts receivable 4,500 Commissions payable 22,700
Supplies 700 Total liabilities $ 26,300
Equipment 59,900
Owner's Equity
Owner's capital 110,500
Total liabilities and
Total assets $136,800 owner's equity $136,800

2. The statement of cash flows is very useful in assessing whether a company's operations
are generating sufficient funds to support expansion. The statement tells whether
operations are producing enough cash or whether the company will need to obtain
outside financing from creditors or owners.

1-13
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
P4. Preparation and Interpretation of Financial Statements

1. Frequent Ad
Income Statement
For the Year Ended January 31, 2014
Revenues:
Advertising service revenue $159,200
Expenses:
Equipment rental expense $37,200
Marketing expense 4,500
Salaries expense 86,000
Supplies expense 19,100
Office rent expense 10,800
Total expenses 157,600
Net income $ 1,600

Frequent Ad
Statement of Owner's Equity
For the Year Ended January 31, 2014
A. Francis, capital, January 31, 2013 $ —
Investments by A. Francis 5,000
Net income for the year 1,600
Subtotal $ 6,600
Less withdrawals —
A. Francis, capital, January 31, 2014 $ 6,600

Frequent Ad
Balance Sheet
January 31, 2014
Assets Liabilities
Cash $ 1,800 Accounts payable $19,400
Accounts receivable 24,600 Salaries payable 1,300
Supplies 900 Total liabilities $ 20,700

Owner's Equity
A. Francis, capital 6,600
Total liabilities and
Total assets $27,300 owner's equity $ 27,300

2. The company is challenged both in terms of profitability and liquidity. Profitability is

low in that it has earned only $1,600 on revenues of $159,200. Liquidity is low because
the company has cash of only $1,800 and liabilities of $20,700, but will likely receive
$24,600 from customers.

1-14
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 P5. Use and Interpretation of Financial Statements

1. The income statement shows net income of $3,775 earned by the company over a
month. The amount of net income is necessary for the preparation of the statement
of owner's equity. The statement of owner's equity shows an ending balance of
$42,850. The ending balance of owner's capital appears in the owner's equity section
of the balance sheet. The statement of cash flows explains the changes in the cash
balance during the month, and the ending amount should match the cash balance
shown on the balance sheet.

2. The income statement is most closely associated with the goal of profitability, be-
cause it shows the earnings of the business. The cash flow statement is most closely
associated with the goal of liquidity, because it shows the changes in cash.

3. The company appears to be very profitable because it has earned $3,775 of net in-
come on revenues of $6,100. The owner also withdrew money in the amount of
$2,400. However, the return on total assets (net income divided by total assets) is
only 6.98 percent, or $0.0698 on each dollar of assets invested. Moreover, the com-
pany might experience some challenges in its liquidity position in the future because
it has liabilities of $11,250 and cash of only $6,700.

4. When deciding whether to make a loan to a company, a banker evaluates the com-
pany's ability to pay interest charges and repay the loan at the appropriate time. Ac-
cordingly, a banker studies the company's liquidity and cash as well as its profitability.
That information is represented in financial statements, which are prepared by a com-
pany's management and can be falsified for personal gain. To lend credibility to the
financial statements, the banker may request an independent audit by a CPA. The
audit would determine that the financial statements present the data fairly and con-
form to GAAP in all material respects.

1-15
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
Alternate Problems

P6. Preparation and Interpretation of Financial Statements

1. IS Wages expense BS Accounts payable

BS Equipment IS Rent expense
IS Equipment rental expense OE Withdrawals
IS/OE Net income IS Fees earned
BS Land BS Cash
BS/OE Owner's capital BS Supplies
IS Revenues IS Utilities expense
BS Accounts receivable

2. The income statement is most closely associated with the goal of profitability.

P7. Integration of Financial Statements

1. Set A Set B Set C

Income Statement
Revenues $2,400 $13,200 (g) $ 480
Expenses 1,620 (a) 10,000 184 (m)
Net income $ 780 (b) $ 3,200 (h) $ 296
Statement of Owner's Equity
Beginning balance $5,800 $48,800 $480
Net income 780 (c) 3,200 296 (n)
Less withdrawals 400 2,000 (i) 216 (o)
Ending balance $6,180 $50,000 (j) $560 (p)
Balance Sheet
Total assets $9,380 (d) $60,000 $1,160 (q)

Total liabilities $3,200 $10,000 $ 600 (r)

Owner's capital 6,180 (e) 50,000 (k) 560
Total liabilities and owner's equity $9,380 (f) $60,000 (l) $1,160

2. The income statement must be prepared first because the amount of net income is
necessary to determine the ending balance of owner's equity. The statement of
owner's equity is prepared second because it provides the ending balance of owner's
capital for the balance sheet, which is prepared last.

1-16
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 P8. Preparation and Interpretation of Financial Statements

1. Sears Labs
Income Statement
For the Year Ended November 30, 2014
Revenues:
Design service revenue $248,000
Expenses:
Marketing expense $19,700
Office rent expense 18,200
Salaries expense 96,000
Supplies expense 3,100
Total expenses 137,000
Net income $111,000

Sears Labs
Statement of Owner's Equity
For the Year Ended November 30, 2014
Owner's capital, November 30, 2013 $ 70,400
Net income for the year 111,000
Subtotal $181,400
Less withdrawals 40,000
Owner's capital, November 30, 2014 $141,400

Sears Labs
Balance Sheet
November 30, 2014
Assets Liabilities
Cash $141,600 Accounts payable $ 7,400
Accounts receivable 9,100 Salaries payable 2,700
Supplies 800 Total liabilities $ 10,100

Owner's Equity
Owner's capital 141,400
Total liabilities and
Total assets $151,500 owner's equity $151,500

2. The company's ability to pay its bills or its liquidity appears good because it has cash
of $141,600 and total liabilities of only $10,100.

1-17
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
P9. Preparation and Interpretation of Financial Statements

1. Bachino's Pizza
Income Statement
For the Year Ended September 30, 2014
Revenues:
Pizza revenue $164,000
Expenses:
Equipment rental expense $ 5,800
Marketing expense 3,000
Salaries expense 112,000
Supplies expense 8,200
Delivery truck rent expense 14,400
Total expenses 143,400
Net income $ 20,600

Bachino's Pizza
Statement of Owner's Equity
For the Year Ended September 30, 2014
Owner's capital, September 30, 2013 $ —
Investments by owner 4,000
Net income for the year 20,600
Subtotal $24,600
Less withdrawals 2,000
Owner's capital, September 30, 2014 $22,600

Bachino's Pizza
Balance Sheet
September 30, 2014
Assets Liabilities
Cash $ 5,200 Accounts payable $21,000
Accounts receivable 26,400 Salaries payable 1,400
Supplies 800 Total liabilities $22,400
Equipment 12,600
Owner's Equity
Owner's capital 22,600
Total liabilities and
Total assets $45,000 owner's equity $45,000

2. The owner of a sole proprietorship receives all the profit (or losses) of the company
and is liable for all obligations of the firm. Partners, on the other hand, share profits
(or losses) and obligations, but each partner brings specific talents to the partnership.

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© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 P10. Use and Interpretation of Financial Statements

1. The income statement shows net income of $3,600 earned by the company over a
period of time. The amount of net income is necessary for the preparation of the
statement of owner's equity. The statement of owner's equity shows an ending bal-
ance of $41,175. The ending balance of owner's capital appears in the owner's equity
section of the balance sheet. The statement of cash flows explains the changes in
the cash balance during the year, and the ending cash shown should match the cash
balance that appears on the balance sheet.

2. The income statement is most closely associated with the goal of profitability, be-
cause it shows the earnings of the business. The cash flow statement is most closely
associated with the goal of liquidity, because it shows the changes in cash.

3. The company appears to be very profitable because it has earned $3,600 of net income
on revenues of $5,925. The owner also withdrew money in the amount of $2,400. How-
ever, the return on total assets (net income divided by total assets) is only 6.60 per-
cent, or $0.0660 on each dollar of assets invested. Moreover, the company might ex-
perience some challenges in its liquidity position in the future because it has liabilities
of $13,350 and cash of only $7,125.

4. When deciding whether to make a loan to a company, a banker evaluates the com-
pany's ability to pay interest charges and repay the loan at the appropriate time. Ac-
cordingly, a banker studies the company's liquidity and cash flows as well as its
profitability. That information is represented in financial statements, which are pre-
pared by a company's management and can be falsified for personal gain. To lend
credibility to the financial statements, the banker may request an independent audit
by a CPA. The audit would determine that the financial statements present the data
fairly and conform to GAAP in all material respects.

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Cases

C1. Conceptual Understanding: Business Activities and Management Functions

The three basic activities in which Costco will engage to achieve its goals are financing
activities (obtaining adequate funds or capital to operate its business), investing activities
(spending the capital it receives so that it will be productive), and operating activities (run-
ning its business). Financing activities include obtaining capital from owners and from
creditors, such as banks and suppliers. They also include repaying creditors and paying
a return to the owners. Investing activities include buying land, buildings, equipment, and
other long-lived resources needed in the operation of the business and the sale of these
resources when they are no longer needed by the business. Operating activities include
selling merchandise and services to customers; employing managers and workers; buying,
producing, and selling goods and services; and paying taxes to the government.

Costco's management is the group of people who have overall responsibility for operating
the business and for meeting the company's profitability and liquidity goals. The functions
management must perform to fulfill its responsibilities are obtaining financial resources
(assets) so the company can continue operating (financial management); investing the
financial resources of the business in productive assets that support the company's goals
(asset management); developing and producing goods and services (operations manage-
ment); selling, advertising, and distributing goods and services (marketing management);
hiring, evaluating, and compensating employees (human resource management); and cap-
turing, organizing, and communicating data about all aspects of the company's operations
(information management). Accounting is covered by the last function.

C2. Conceptual Understanding: Concept of an Asset

Assets are economic resources owned by a business that are expected to benefit future
operations. The people in an organization are not assets of the business because they are
not owned by the business. Businesses pay their employees on a periodic basis (hourly,
weekly, monthly, or annually); they do not buy employees. Salaries, wages, and other
costs associated with employment are considered expenses and appear on the income
statement.

Southwest Airlines considers its people to be its most important asset because of the costs
of hiring, training, motivating, and compensating high-quality employees who will benefit
future operations. Airlines depend on their ability to develop and keep competent and
motivated individuals. And their success in attracting and retaining high-quality employees
depends on the opportunities and compensation they provide.

1-20
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Other documents randomly have
different content
absorbing interest of subjects discussed, the excellent music of the
ample choir, the completeness of arrangements by the local
committee, and their uniform courtesy and unremitting attentions,
and last, but not least, the generous hospitality of the Christian
people of the city, all conspired to make the occasion one to be long
and delightfully remembered.
The American Missionary Association turns with fresh hope and new
inspiration to the work of the coming year.
 GENERAL SURVEY.

FREEDMEN.

The fortunes of the freed people during the current year indicate a
marked degree of progress. A healthy growth in all the branches of
our Southern work is quite discernible. It is strikingly evident that
the Freedmen are discovering the extent of the horizon opening up
before them through our educational institutions. At one time, many
of their leaders were attracted by the allurements of political
preferment, and counted nothing so good as position in office, and
many such, doubtless, there will be to the end of time. There is,
however, an increasing number among them who are coming to
realize that intelligence and character developed by Christian
education have a commanding worth and solid value that cannot be
conveyed by an appointment or imbibed during the sessions of a
legislature. This good result has been hastened by Teachers’
Institutes, conducted by Southern and Northern educators, among
the black and also the white citizens, sometimes large numbers of
both classes mingling in the same convention.
Possibly never have our missions been more richly blessed by the
outpourings of the Holy Spirit than during the past year. Whole
classes in a school have indulged the hopes of a new life, and the
rich experiences gathered during revivals have been borne forth into
the villages and the country during the summer months by our
students. Sabbath-schools have everywhere received due attention,
and temperance work has been well sustained and productive of
much good. Missionary meetings and societies have been
encouraged, and the gifts from the hard earnings of the poor to the
cause of missions abroad, indicate what may be hoped for when the
colored people become educated and prosperous.
 EDUCATIONAL WORK.

Our eight Chartered Institutions, including Berea College and

Hampton Institute, which were founded by this Association, have
experienced a year of unusual prosperity. The number pursuing a
higher grade of study has been continually on the increase, and the
quality of the work done, as testified to by many who have
witnessed it, indicates that the grade of teachers has been
improved, not only by self-culture on the part of those who have
been long in service, but also by accessions from among the best
educators in the country. Three of our teachers have received
honorary degrees from important colleges at the North, and others
have been encouraged by many tokens of appreciation and esteem.
During the year, the Tillotson Institute at Austin, Tex., took
possession of its new building, a brick structure one hundred and
four feet long, forty-two feet wide and five stories high. From the
first this school has met with the hearty approval and sympathy of a
large number of the best citizens of Austin. The new building was
opened in January, and before the close of the spring term 107
students had availed themselves of its advantages.
The college at Berea has added $50,000 to its permanent
endowment fund; the Fisk University has received $4,000
endowment for student aid. At Hampton, two new buildings, one for
Indian and one for Negro girls, have been provided by the friends of
the Institution, and a new Academic Hall, in place of one that was
burned, has been dedicated. At Tougaloo, Miss., a boy’s dormitory of
brick, with accommodations for about 75 students, has been
completed. This building was made especially necessary by the
ravages of fire, which destroyed the wooden structure that had
served in a very inadequate way both for school rooms and boarding
purposes.
Other buildings at Straight University, New Orleans; Fisk University,
Nashville, Tenn.; Talladega College, and Atlanta University, provided
by the gift of $150,000 by Mrs. Valeria G. Stone, have either been
completed, or are in a good state of progress. At New Orleans, there
was added to the half square of land on Canal street, before owned
by the A. M. A., the remaining half. Upon this site has been erected a
neat three-story building, ninety-two feet on Canal street and ninety-
one feet on Roche Blave street, containing dining-room, kitchen and
laundry for the whole school, parlor, bath-room, apartments for
teachers and dormitories for about 60 girls.
At Talladega, Stone Hall, for boys, has been completed. It is three
stories high, with a basement, and contains printing office, reading-
room, bath-room and dormitories for 76 students. With a portion of
Mrs. Stone’s gift, supplemented by $1,000 from Mr. Gregory, of
Marblehead, $100 from Gen. Swayne and a few smaller sums from
others, Swayne Hall has been remodeled and thoroughly repaired
from pavement to bell-tower, including roofing, flooring,
blackboarding, etc. A house for the accommodation of the President
will soon be completed. With these improvements the college will be
ready for a great work.
At Fisk University, Nashville, Tenn., Livingstone Missionary Hall is
nearly inclosed. It is two hundred and four feet long, sixty-two feet
wide in the centre, and has four stories and a basement. The
foundation is of stone and the walls are of pressed brick. A mansard
roof with brick gables and ornamented chimneys crowns the edifice.
It will contain chapel, lecture-rooms, recitation-rooms, teachers’
apartments and dormitories for 120 boys. Although planned with a
strict regard for economy, it will be a grand and stately companion
for Jubilee Hall. Several months will be required for its completion.
At Atlanta, a new wing has been added to the girl’s dormitory, and
plans for a school building between the two dormitories have been
completed and some materials purchased. It is expected that the
building will be finished and ready for occupancy in a year from this
time. In planning these various buildings, it has been the aim to
provide the best facilities possible, but the claims of architecture
have not been wholly ignored. Some of the best architects in the
country have been consulted, and all the plans have been examined
carefully by your Executive Committee.
It will be seen by this review that each of our eight chartered
institutions has received permanent and substantial aid either in
funds or in buildings, and that never before were they so fully
equipped for the great work thrown upon them. The prayer of the
last half score of years for room has been wonderfully answered,
and the blessing of Heaven is crowning the labors of workers with
rich rewards.
Our other schools, 46 in all, normal and common, have met with
favor on every hand, and have experienced uninterrupted progress
throughout the year. At some of them the industrial work has been
pushed forward with gratifying success. Attention has been given to
household industries in two or three places. A class of girls at
Memphis, Tenn., has been carefully instructed with actual practice in
an experimental kitchen, on the nature, relative values, and healthful
methods, of cooking food. Classes in needle work, knitting, and in
the use of sewing machines, have had daily lessons and practice.
We have had in all 230 teachers in the field, a gain of 30 over last
year. Of these, 14 have performed the duties of matrons and 15
have been engaged in the business departments.
The total number of students has been 9,108, a gain of 1,056 over
the previous year. They were classed as follows: theological, 104;
law, 20; collegiate, 91; collegiate preparatory, 131; normal, 2,342;
grammar, 473; intermediate, 2,722; primary, 3,361; studying in two
grades, 136.
Our normal and common schools, like our chartered institutions, are
constantly sending up the call for more room. Permanent
accommodations have been provided at some points and temporary
ones at others. At Wilmington, N.C., by the gift of Hon. J. J. H.
Gregory, the school building has been remodeled for the
accommodation of a large number of students. A new mission home
has also been built by the munificence of the same gentleman. At
Athens, Ala., the colored people have done nobly toward furnishing
material for the school-house now under process of construction.
They have already made two hundred thousand bricks with their
own hands, and are placing them in the walls to represent their
interest in the property. It is hoped that the work will be completed
by January 1st, and that Miss Wells, who has been Principal of the
school for fifteen years, will be rewarded for her labor and patient
waiting by ample accommodation for all the students who may seek
the advantages of her excellent normal school.
During the year we have inaugurated work at Topeka, Kan., the chief
rendezvous of the refugees, where a lot has been purchased and a
building suitable for both church and school purposes erected. Divine
services are held on the Sabbath. A Sabbath-school with an average
attendance of 170 has been gathered, and a prosperous night-school
sustained. Much good has been done by our missionary and others
at this point in the distribution of supplies to the destitute, and by
speeding them on their way to homes among the farmers and
mechanics of the State. We have also resumed our church work at
Lawrence, Kan., with good results.
Commencement days, or the closing exercises at our different
institutions, are becoming more and more eventful as the years go
on. One feature of especial interest at Hampton was the delivery of
orations and the reading of papers by the alumni of the school.
These displayed an amount of character and culture on the part of
those who had been several years in the field since their graduation
which was very gratifying.
Commencement day at Berea College is unlike any other in the
South or elsewhere in the country. Hours before the exercises begin,
the streets are thronged with hundreds of people, black and white,
old and young, properly dressed or dressed in rags, some riding on
the finest steeds produced in Kentucky, some on plough horses,
mules and ponies, riding single, riding double, with a child or two
between. The exercises are held in a large open tabernacle seating
about three thousand persons. The building is usually decorated with
mottoes and banners, with plants and flowers and miniature
fountains. The college band furnishes the music. Not the least
interesting is the basket dinner on the college campus. The fame of
these days spreads far and wide for hundreds of miles, awakening
an enthusiasm on the part of the young for an education, and
winning words of praise and tokens of cheer from the very best
people throughout the State.
At the Emerson Institute, Mobile, Ala., eight hundred people
crowded into the Third Baptist Church to see and to hear of the
work for themselves; while, at Montgomery, on the theory that what
is good for a part is good for all, every scholar, from the least to the
greatest, was given a speech. As there were more than three
hundred to take part, the authorities decided that all the exercises
should not be crowded into a single day. Consequently, in order that
a good thing might last a good while, it was arranged to devote
three evenings to the speaking.
The growing interest in these anniversary occasions all along the line
of our work, the attendance of leading white citizens, and their
readiness to occupy seats on the platform with our teachers and
workers, the enthusiasm of the colored folks to throng in and catch
every word that is uttered, all combine to lift up the work from the
low place it has occupied among those at the South who have
looked unfavorably upon it, and to magnify in the minds of the
colored people, who have struggled so hard to send their children to
school, the dignity and importance of Christian education. With a
few more years of progress like the past, our educational work will
outrun and leave behind the obstacles and the enemies which have
stood in its way during the past years, and God is speeding the day.
 CHURCH WORK.

Our Church Work is attaining a steady and healthful growth. We do

not seek to force the founding of churches where there is no urgent
demand for them; while this might swell our rolls, it would only
serve to weaken and discourage ultimately. Our purpose is to
establish churches where there is sufficient intelligence and outlook
to give reasonable hope that a Congregational church may do good
service for the Master, not only by the benefit accruing to its own
members, but also by its influence upon other and older churches
that have not had the advantages of an educated ministry. Our
whole number of churches is 78, being an addition of five over last
year. These have been organized at Washington, D.C., Louisville, Ky.,
Little Rock, Ark., Thibadeaux, La., and Houma, La. The total number
of church members is 5,472, a gain of 511 on last year. The number
in Sabbath-school, 8,130, a gain of 1,806. New meeting houses have
been constructed at Peteance, La., Little Rock, Ark., Lassiter’s Mills,
N.C., and Wilmington, N.C. At the latter place a tasteful structure,
with accommodations for 400, was provided by the gift of Hon. Mr.
Gregory, at a cost to him of $3,600, and dedicated with fitting
ceremonies, which were heartily participated in by the leading white
clergymen of the city. Church buildings are under process of erection
at Caledonia, Miss., Luling, Tex., Frausse Point, La. Parsonages have
also been built at Florence, Ala., Flatonia, Tex., and houses for the
Presidents at Tougaloo, Miss., and Talladega, Ala.
The material prosperity of our churches indicated by these
statements is very encouraging, but the spiritual activity and growth
is far more so. More than one-third of our churches have reported
revivals, with conversions numbering from seven to forty-four,
resulting in a large number of accessions to the churches.
Our church work is gradually creating a demand for the services of
the students graduating at theological departments under our
supervision at Howard University, Talladega College, Fisk and
Straight Universities, and these are taking the places of white
clergymen from the North in many localities.
The growing interest in theological seminaries for Freedmen is
happily illustrated by the gift of $25,000 to us, for endowment of the
theological department at Howard University.
We have seven State Conferences, embracing the most of the
territory occupied by our schools and churches. These hold annual
conventions, at which large numbers assemble.
The Alabama Conference has associated with it a woman’s
missionary society, which reports the operation of its auxiliaries in
different parts of the State. It is an active, hard-working and
successful society, that does great credit to the missionary workers
connected with it. This Conference also has a Sabbath-school
convention representing many county organizations, and the
Sabbath-school interests of the State. The meetings of this
Conference, as well as those of the others, exert a beneficent and
wide-spread influence, which serves not only to cement, but to make
active and strong, the Congregational church work at the South.
The movement made a few years since on the part of a few leading
ladies at the North to send forth female missionaries to labor in the
homes of the poor and destitute colored people, and to assist
otherwise for their temporal and spiritual improvement, has met with
marked approval and encouraging success. We have commissioned
eleven in all during the past year, and their reports have been full of
interest. We believe the work they have been doing is a vital
necessity, and that it should be extended as rapidly as may be
consistent with the other interests we have in charge.
It is fitting before bringing to a conclusion the report of our
operations among the Freedmen, that proper recognition be made of
the improved sentiment among the whites at the South relative to
our work. We entered the South with right principles. We did not
inquire especially what was good policy, but what was required by
justice, and what was consistent with righteousness. To promote
these ends our missionaries were ready to sacrifice, if need be, their
lives. They never advanced to retreat, but to conquer. Amidst
hardship, ostracism and poverty, they toiled on; the Southern people
watched them; little by little they came to recognize their worth;
they saw massive structures rear themselves in choice locations in
the great capital cities of the South. They were led to recognize the
ability and integrity of the self-denying workers, who pursued their
toilsome way in leading young Freedmen up to Christian manhood
and womanhood; they saw church after church founded with a pure
and educated ministry; some of the best of them ventured to visit
the teachers and their schools. The work grew on. The children who
had been under the care of leading white citizens in service or in
household, exhibited the value of the work done so strikingly as to
remove all doubt of the purpose and success of the teachers from
the North. United States Senators, the Governors of States,
Legislative bodies and companies of good men, out of interest, out
of patriotism, out of curiosity sometimes, attended anniversary
occasions, and lent their interest and gave their influence to promote
the welfare of the institutions under our care. The result of it all has
been to emphasize and establish the principles with which we
started out, and to revolutionize the sentiment of many leading
minds throughout the Southern country; and now halls of legislation
and portions of the press of the South sparkle with sentiments that
would do honor to Northern patriots, who battled early for the
existence and success of this Association. Governor Brown of
Georgia wins his election to the United States Senate after affirming
before the Legislature, “We must educate the colored race. They are
citizens, and we must do them justice.”
Governor Holliday, of Virginia, who lost an arm in the Confederate
service, comes forward and makes good use of the other in
expressive gestures while urging the claims of the colored people for
education at the anniversary at Hampton.
General Humes, a Major-General in the Southern army, consents to
give the oration at the anniversary of the Le Moyne Institute, and
conveys assurances of the active sympathy of the best citizens of
Memphis for the work carried on; while Dr. Atticus G. Haygood, the
President of Emory College, bursts forth with the exclamation,
“Suppose these Northern teachers had not come, that nobody had
taught the negroes, set free and citizens, the South would have
been uninhabitable by this time. Some may resent this; be it so, they
resent the truth.”
The utterances of the press are not less significant. An editorial in
the Memphis Appeal affirms: “The Southern States have too long
stood aloof and allowed the stranger to do for the negro what they
should have done themselves.” “There is but one thing for the
people of the South to do, and this is, to throw themselves into the
work of educating the negro. We must go forward, and must take
the negro by the hand and make him feel that he is a part of the
great column of the people.” The Nashville American, the most
influential paper in the State, through its leading editor, in giving a
report of the anniversary of Fisk University, goes on to say: “In the
labor of regeneration of a race, no agency will have so high a place
as this conservative school.” The Vicksburg Herald strikes another
note on the gamut and illustrates a change of sentiment on this
wise, in response to a narrow-minded, complaining correspondent:
“We are heartily in favor of the South from the Potomac to the Rio
Grande being thoroughly and permanently Yankeeized. Yankee
energy, Yankee schools, Yankee cultivation, Yankee railroads and
Yankee capital are badly needed in the South, and will be welcomed
by every Southern progressive patriot.”
We believe there is nothing to hinder this tidal wave of better feeling
from sweeping the entire South. For our part, we have only to hold
on and press on.
 AFRICA.

The development of the work among the Freedmen, the interest

taken in African civilization by the most thoughtful people in the
country at large, and the enthusiasm awakened among the blacks
for the land of their ancestors, constantly remind us of the call we
have for mission work in Africa. We have paid much attention to the
consideration of this call. In accordance with the suggestion of the
last Annual Meeting, we have appointed a Superintendent of African
Missions, not only to supervise the work we have carried on so long
on the West Coast, but to lay the foundations of the Arthington
Mission on the Upper Nile. Great care was taken in selecting a
Superintendent, resulting in the choice of Rev. Henry M. Ladd, the
son of a missionary, who spent the first sixteen years of his life in
the East, after which he came to this country, pursued a course of
study and entered the ministry at Walton, N.Y. Mr. Ladd left America
for the Mendi Mission in February, reaching the West Coast the last
of March. He made a careful examination of the methods of
missionary work at Freetown, Sierra Leone, under the care of our
British brethren, and afterward proceeded to Good Hope Station,
where we have a church and school. Mr. Ladd was accompanied to
Africa by Mr. Kelly M. Kemp and his wife, from Lincoln University. A
council was called at Good Hope Station for the ordination of Mr.
Kemp, and representatives of the Shengay and other missions were
present. It was thought advisable that Mr. A. E. White, who had
acted as teacher at this point, should return to America. He has
since done so, and at present is pursuing his studies at Oberlin
College, with a view of preparing himself for better service on the
mission field. Mr. Nurse also retired from the mission, giving place to
Bro. Kemp, whose experiences and education rendered himself a
desirable person as pastor over the church at this point. After
arranging details of affairs at Good Hope, Mr. Ladd visited the Avery
Station, and was encouraged by the good work under the
supervision of Mr. Jackson at this inland station.
Our saw-mill, being the only one on the coast, can be brought into
service constantly. Logs are plentiful in the neighborhood, and the
people are willing to work. The coffee farm at Avery shows signs of
progress, and very soon we may hope for a yield that will test the
value of the experiment. The church and school have been kept up,
much attention being given in the church to rigorous discipline,
where the members had inclined too strongly toward the barbarous
customs of the heathen about them. We have long felt the need of a
business superintendent to manage the affairs of the mill and farm
at Avery, to take care of the property at Good Hope and Debia, and
to keep the temporary home at Freetown in readiness for the
missionaries on their way to and fro. Mr. I. J. St. John, a man of
considerable experience in business affairs, has been appointed to
fill this position. In common with other missionary societies, laboring
for the redemption of Africa, we find that where there are no roads
or domestic animals, but many rivers, a suitable steamer would be
quite serviceable in promoting the interests of our civilizing
operations, and in adding to the comfort of our missionaries. We
believe we ought to provide such a steamer for the Mendi Mission as
early as possible, and our appeals are already out for $10,000 as a
special fund for this purpose.
We were saddened early in the summer by the unexpected death of
Rev. Mr. Kemp, which was followed soon after by the death of his
wife, just as they were settling down to the life work they had
chosen. Both of these dear missionaries were unavoidably exposed
in open boats to the bad influences of the climate. By their death
they illustrate our need of more speed and better shelter in
transporting missionaries from station to station.
We have appointed Rev. J. M. Williams, a native of South America
and an experienced worker in Africa, to carry on the work at Kaw
Mendi, the first station occupied on the return of the Amistad
captives.
Rev. J. M. Hall, a graduate of Maryville College and of the
Theological Department of Howard University, has consented to fill
the place vacated by the death of Mr. Kemp, and he, with Mr. St.
John, left America in October for the mission.
Three lads from the Mendi country are at school in America, one at
Fisk University, and the others at Hampton Institute.
Early in December, Mr. Robt. Arthington, of Leeds, Eng., signified his
readiness to pay over the £3,000 he had pledged as a nucleus,
provided we would plant a mission on the Upper Nile. Already Dr.
O. H. White, Secretary of the Freedmen’s Missions Aid Society of
London, had made good progress in securing £3,000 additional to
Mr. Arthington’s pledge for the same purpose. It was evident to us
that the $30,000 asked for from Great Britain toward the $50,000
fund for this mission would be speedily made up. As we had pledged
ourselves to furnish $20,000 on condition that we received in all
from Great Britain $30,000, the question of the establishment of the
mission directly was thrown upon us. We felt that the call to us was
to go forward, and Mr. Ladd’s services were secured at the earliest
day possible with a view to this necessity. As the plan of sending
forward two men to look over the mission field, select a site for the
station, and to determine what supplies and facilities would be
needful for the mission, fully met Mr. Arthington’s view, we
determined to send forward Mr. Ladd early in the autumn for the
purpose mentioned. We were happy, also, in securing the services of
a former parishioner of Mr. Ladd, Dr. E. E. Snow, a physician of much
experience, to accompany him on his journey. These two brethren
left New York in September. They had provided themselves with a
valuable letter from Secretary Blaine, instructing the Consul General
of the United States at Cairo to further their object as much as he
might be able. On their way they purposed to procure letters of
introduction from the English Government, hoping thereby to be
assisted in making favorable arrangements with the Khedive of
Egypt for transportation to the field of their destination, and also for
the privilege of using a steamboat on the waters of the Upper Nile.
Their plan of route will be to visit Cairo, and proceed from thence to
Souakim, on the Red Sea; from this point they will pursue a camel
route a distance of 240 miles to Berber, where they hope to find
steamboat facilities for the remainder of their journey. The point
which they seek to reach is about 1,500 miles in a direct line south
of the Mediterranean and near the mouth of the Sobat, where the
people are in the depth of barbarism. It is the hope of your
Committee that Brothers Ladd and Snow will be able to return in
early summer, at which time Dr. Snow will devote himself to
procuring a suitable steamer for mission purposes on the Nile, and
other supplies and facilities needful for the comfort and success of
the enterprise. Supt. Ladd will devote himself to organizing a
suitable corps of missionaries for the Arthington mission, two of
whom are already under appointment, with a view of proceeding up
the Nile next autumn to their field of labor. Our African work is not
without its hazards, its embarrassments and inevitable
discouragements. We believe, however, that the good tidings of
great joy must be preached to the millions of newly-discovered
peoples in Central Africa, and that the negro race with which we
have so much to do has an urgent and imperative call in this
direction. We accept, therefore, cheerfully and prayerfully, our part
of the burden, trusting that the many friends of the long despised
and forgotten Africans will sustain us by their prayers and by their
contributions, while we go forward as the Lord opens the way,
performing our tasks as best we are able until the day shall dawn.
 THE INDIANS.

We believe that the Peace Policy of General Grant, which was

continued by President Hayes, has been productive of great and
lasting good to the Indians. Some infelicities have occurred between
the Government representatives and those of the religious bodies
having nominations intrusted to them, and these, together with
other reasons, have served to diminish the interest once taken by
the officials at Washington in the co-operation of the religious
bodies. We have no wish to discuss the subject, nor to press upon
the Administration the question of the continuance of the Peace
Policy. We content ourselves, therefore, with giving a few statements
relative to the Indian work under our care.
The general improvement of the Indians at the S’Kokomish Agency is
indicated from the fact that the white employés, with the exception
of the clerks, physicians, and those connected with the schools, have
been discharged and their places filled by Indians. At this Agency,
the long desired titles to their land have at last been granted to the
Indians by the Government, and they have, therefore, additional
inducements to become thrifty and make themselves homes. At
Dunginess Station, where a few members of the S’Kokomish church
reside, there is a church building, the only one in the county. This
has been furnished recently with a bell and melodeon. An average
attendance of forty on divine services at this point and of eighty at
S’Kokomish is of much encouragement. Their gifts, also, to
benevolent objects for the year, amounting to $614.67, indicate that
the Indian may be counted upon to help on the world’s conversion.
Good work has been done for Indians at Hampton and Carlisle, and
we have the question under serious consideration of providing
suitable accommodations for Indian youth in connection with other
institutions.
 THE CHINESE.

The work among the Chinese on the Pacific Coast has been carried
on under the able and energetic superintendence of Rev. W. C. Pond
with unabated interest and success. Here there has been
enlargement. The excess of teachers for the past year over the
previous year has been six, that of pupils 76, and of hopeful
conversions 13. A comparison of the statistics and work shows an
improvement at all points. The total enrollment last year was 1,556;
this year, 1,632. The number last year who gave evidence of
conversion was 127; this year, 140. All reports that have come to us
are exceedingly encouraging, and not the least among them is the
repeated expression of the need there is of some well chosen point
in Southern China for a mission station from which converted
Chinamen returning to their fatherland may go forth to preach to
their countrymen. We do not purpose to act hastily upon
suggestions of this kind. We seek, however, to learn clearly the will
of the Master, and to expand His work whenever and wherever it is
evident He is leading the way.
 FINANCES.

The financial success reported at our last Annual Meeting, while full
of encouragement, cast upon us a shade of anxiety. It was not
certain that the additional funds made necessary by the large gifts
we had received for new buildings, and the plans we had adopted
for enlargement at different points, would be forthcoming. Efforts
were made throughout that meeting to impress upon all those
present the urgent necessity we were under for at least 25 per cent.
of increase in receipts over the previous year for current expenses.
The same necessity was also set forth at the National Council at St.
Louis, in our publications and in the pulpits, and at conferences and
conventions wherever opportunity was afforded. We felt that God
had called us to do an enlarged work, and that if we could convey
the information to His people, and share with them the burden we
felt ourselves, the responses would be sufficiently liberal to meet all
demands. In this we were not disappointed. The receipts reported
for the fiscal year closing Sept. 30, 1880, were, for current work,
$187,480.02; this year, $243,795.23, a gain of $56,315.21. This
shows an advance of 30 per cent. mainly in the ordinary
subscriptions over last year, and indicates the people’s hearty
appreciation and indorsement of our work. For this we return
profound gratitude to Almighty God. The fiscal year was closed free
from debt, and with a balance in our treasury of $518.80. We are
sure that the liberality displayed augurs well for the future. We
believe the money received was expended wisely. We do not see
how we could have done justice to our work without it. But
additional outlay for current expenses is sure to be needful. The
Stone Hall just finished at Straight University will afford
accommodations for the teachers and sixty girls. The cost, however,
for student aid, for insurance and the care of the building, will
require additional receipts. What is true at New Orleans is equally
true at Talladega College, with its new dormitory for a hundred
boarders, and at Tougaloo, Miss., with the facilities of its new Hall.
When Livingstone Missionary Hall, at Nashville, is done, and Stone
Hall, at Atlanta University, completed, two hundred additional
boarding students will make new demands which must be met.
To all we have mentioned must be added the consideration that we
are laying foundations for a mission in Africa on the Upper Nile, at a
point further remote from the coast than any occupied by other
societies, either home or foreign, and that the outlay for this, if
carried forward, will be considerable in the near future. We believe,
therefore, that it is our duty to ask the friends of this Association to
give us during the coming year not less than $300,000 for the
support and enlargement of the varied work we have in charge.
 DEMANDS OF THE FUTURE.

Some of the demands indicated above may be summarized as

follows:
1. The increase of students this year over last year is 1,056. A
considerable number of these were boarding students, but with our
additional accommodations we shall require the coming year from
five to ten thousand dollars more than usual for student aid.
2. We have no boys’ dormitory at Straight University, the new Stone
Hall being exclusively for the teachers and girls. We need
immediately fifteen thousand dollars to supply this want.
3. Funds also are necessary for libraries in at least ten of our
different institutions. An advanced school without a sufficient library
labors under great disadvantages, and especially so when located
amid a people who have but very few books of their own. From ten
to twenty thousand dollars for libraries could be used very profitably
at once.
4. Our theological departments need better facilities and an
increased corps of instructors. The number of students graduating
from the different schools at the South is rapidly increasing. Many of
these would enter the Christian ministry if sufficiently encouraged to
do so. We need funds for the endowment of professors’ chairs at
least at three different points south of the Ohio.
5. We need also endowment funds for all our chartered institutions.
No colleges thrive for a great length of time without endowments.
The work of a missionary society primarily is to plant churches and
religious institutions, and to sustain them until they can care for
themselves. Its business is, and must be, aggressive. As soon as
may be, its churches and its educational institutions must become
self-sustaining by their own endeavors, while the society goes
forward to new fields. We need now, we surely ought to have in the
near future, not less than five hundred thousand dollars for the
endowment of our different institutions.
6. We need also ten thousand dollars at once for a suitable steamer
for our Mendi Mission.
The negroes in the West Indies, the millions in South America, the
two hundred millions in Africa, have their claims upon us. We are of
them as a missionary society, and they are of us as our brethren in
distress, awaiting such benefits as we have been blessed in
bestowing on the few representatives in our own country.
Finally, this Association needs, most of all, the prayers of God’s
people everywhere for the guidance of His Holy Spirit, and the
sufficiency of His grace to direct its affairs in days to come, and for
this your Committee puts forth its most urgent appeal.
 SUMMARY OF THE TREASURER’S REPORT OF
THE AMERICAN MISSIONARY ASSOCIATION,
FOR THE YEAR ENDING SEPT. 30, 1881.

RECEIPTS.
From Churches, Sabbath
Schools, Missionary
Societies and
Individuals $159,035.21
From Estates and Legacies 46,710.34
From Income, Sundry
Funds 7,495.65
From Tuition and Public
Fund 21,449.92
From Sale of Property 2,250.00
From Rents 1,208.40
————— 238,149.52
From Donations for
Tillotson C. and N.
Institute Building 5,645.71
—————
243,795.23
Balance on hand,
Sept. 30, 1880 783.73
————— $244,578.96
========

EXPENDITURES.
The South.—For Church
and Educational Work $180,753.26
For Tillotson C. and N.
Institute Building 5,645.71
————— 186,398.97
The Chinese.—For Supt.,
Teachers and School
Expenses 8,858.50
The Indians.—For
Missionaries and
Teachers and Student
Aid 1,703.24
Foreign Missions.—For
Mendi Mission,
Missionaries and
Teachers 12,187.86
For Jamaica Mission 250.00
————— 12,437.86
Publications.—For
American Missionary,
Annual Report,
Pamphlets, Postage, &c. 8,795.04
Collecting Funds.—Boston
Office. Dist. Sec., Agent,
Traveling Expenses,
Rent, Clerk-hire,
Printing, Postage, &c. 5,715.91
Middle District. Dist.
Sec., Traveling
Expenses, Clerk-hire.
Printing, Postage, &c. 2,953.50
Chicago Office. Dist. 3,513.09
Sec., Traveling
 Expenses, Clerk-hire,
Printing, Postage, &c.
————— 12,182.50
Administration.—New York
Office. Cor. Sec.,
Treasurer, Traveling
Expenses, Clerk-hire,
Rent, Printing,
Stationery, Postage, &c. 11,943.89
Miscellaneous Items.—
Annual Meeting 335.51
Wills and Estates 251.32
Annuitants bal. 679.90
Traveling Expenses of Cor.
Sec. as Delegate to
England, and in other
services abroad 473.43
————— 1,740.16
—————
244,060.16
Balance on hand,
Sept. 30, 1881 518.80
—————
$244,578.96
=========

ENDOWMENT FUNDS.
General Endowment Fund.—
Belinda Sanford,
Lebanon Springs, N.Y. $1,000.00
Scholarship Endowment Fund $2,000.00
for Fisk University.— By
 Mrs. A. M. Haley, Buda,
Ill., in memory of
Samuel Gordon Haley,
deceased, Two
Scholarships
Mr. and Mrs. Ralph
Plumb, Streator, Ill.,
Two Bonds, $1,000
each, of Wabash, St.
Louis and Pacific R. R. 2,000.00
————— 4,000.00
Theological Endowment Fund
for Howard University.—
Mrs. Valeria G. Stone,
Malden, Mass. 25,000.00
—————
30,000.00

STATEMENT OF
ARTHINGTON MISSION
FUND FOR AFRICA.
Collections to Sept. 30,
1879 $ 45.00
Collections Oct. 1, 1879,
to Sept. 30, 1880 6,576.48
Collections Oct. 1, 1880,
to Sept. 30, 1881 26,289.62
————— 32,911.10
Amount expended to Sept.
30, 1881 7,433.57
Amount unexpended 25,477.53
————— 32,911.10
 STATEMENT OF STONE
FUND.
Received of Mrs. Valeria
G. Stone, Sept., 1880, 150,000.00
Expended as follows:
Straight University,
Stone Hall and Lot, in
full $ 25,000.00
Talladega College, Stone
Hall and
improvements, in full 15,000.00
Fisk University,
Livingstone
Missionary Hall, in
part 22,476.50
Atlanta University, Stone
Hall, in part 14,000.00
Supt. of Construction, in
part 655.47
————— 77,131.97
Amount unexpended 72,868.03
————— 150,000.00

RECAPITULATION.
A. M. A. Current Fund $243,795.23
Endowment Funds 30,000.00
Arthington Mission Fund,
expended 7,433.57
Stone Fund 77,131.97
————— $358,360.77
The receipts of Berea College, Hampton N. and A. Institute and
State appropriations of Georgia to Atlanta University, are added
below, as presenting at one view the contributions of the same
constituency for the general work in which the Association is
engaged:
A. M. A. $358,360.77
Berea College 60,106.69
Hampton N. and A.
Institute 102,578.77
Atlanta University 8,000.00
————— $529,046.23
 ADDRESS OF SENATOR GEO. F. HOAR.
Mr. President and Ladies and Gentlemen:
I suppose your Secretary was well warranted in announcing my
name, for early in the summer I made an engagement to prepare a
paper to be read here to-night on Christian education in the South;
but the occupations of the last four weeks, as imperative as they
were unexpected, have put it entirely out of my power to comply
with my engagement, as I informed your Secretary yesterday. But
with a persistence which certainly affords a very good illustration of
the doctrine of the “perseverance of the saints,” he has compelled
me to come here to make my excuse in person.
I have not come at this late hour of the evening to enter upon an
argument in favor of what I am sure every person within the sound
of my voice is now thoroughly convinced of, but rather to express
my gratitude and honor at the great work which is now going on in
this country for a Christian education in the West and South, in
which the American Missionary Association is so nobly taking the
lead. I do not think you yourselves are entirely conscious of the
sublimity of what you are doing and what you are helping to do.
Why, take the $321,000 which, including the expenditure from the
Stone fund, your treasurer reports you have expended during the
past year: at the present rates at which the Government can borrow
money, that represents the income of a capital of $9,000,000—the
income of a capital which, I suppose, is greater than the entire
aggregate of all the productive funds of the American colleges forty
years ago, and which I know is more than fifteen times the entire
productive fund of Harvard College as it was estimated by President
Quincy in 1840. Gen. Eaton made an imperfect estimate of the
amount given for education by voluntary contribution in this country,
and in 1872 it amounted to $8,000,000 and upwards; in 1873, the
last year before the great depression in business, it amounted to
more than $11,000,000; and I am informed on credible and high
authority that in this year of grace 1881, it will amount to more than
$18,000,000—the income of a capital, at present rates, of more than
$500,000,000—a vast national school fund invested not where
thieves break through and steal and where moth doth corrupt, but
invested in the patriotism and sense of religious duty of a Christian
people. There is nothing in statesmanship, there is nothing in the
opportunities for political effort, which the highest honors of the
State can hold out to any of her public servants, which surpasses in
dignity the opportunity to help and to bid God-speed to a work like
this.
My friends, it is not strange that the wealth and the conscience of
New England should arouse itself to the opportunities which God has
held out to you in the present age. There are persons within the
sound of my voice within whose lifetime twenty new states will be
admitted to this Union from territory which now is scarcely settled.
That “ancient, primitive and heroical work,” as Lord Bacon calls it,
which he ranks as the highest work which is vouchsafed to man to
take part in, is being performed in your day and by your hands, if
you choose, in a manner unparalleled in human history; and the
sixteen states now reconstructed, within which, until lately, slavery
had bolted the door against every form of popular education, now,
thank God, have their doors unfolded and afford a field of scarcely
less interest than the other. How can the manufacturer, how can the
merchant of Massachusetts fail to respond to the appeal of these
good men and these good women for help in the great work of
educating these communities? Combined, they are very soon to be
the majority, both in states and in population, they are to determine
every question of peace and war, every policy of finance or of tariff;
they are to enact, they are to furnish the men who expound and the
men who execute the laws under which you and I and our children
are to live, and upon which depends the value of all property and
the prosperity of all labor. Will the manufacturer or the merchant,
who gladly taxes himself to insure his property against fire or against
crime, hesitate a moment when you ask him to insure it against
being governed by laws which are to be made by and rest upon
ignorance?
But there is a better reason even than this. I think the opportunity to
take part in such a great benefaction is enough to stimulate every
ingenuous soul. I think there is no more beautiful memorial among
men than to have your name remembered or your picture hang on
the walls of an institution of learning as one of its founders or
benefactors. What gratitude is there like that which men feel for the
college or the founder of the college where they were bred and
educated? Now you have an opportunity to attach to you the coming
generations of the South by this tie, a tie which will be far stronger
than all the hatreds or the passions engendered by civil war, or
which have grown up under years of misunderstanding and hatred.
I have been gratified in what I have heard and read of the speeches
of this Annual Meeting, and what I have read in the reports of your
Association, in seeing what theory it is upon which all your efforts
seem to rest. The foundation of this American Missionary
Association’s work seems to me to be—if I were to state it in a single
phrase—reverence for the individual soul; that doctrine which Christ
preached, for which Christ died—the doctrine without which there
can be neither education, freedom, republic or self-government in
the world—that every human soul, whether contained in a casket of
ivory or a casket of bronze, is a precious thing in the sight of God,
entitled to its equal right, to its equal opportunity, to its equal share
in government with every other.
Now, my friends, you have got a great deal still to do to teach the
people of this commonwealth of Massachusetts to believe and act
upon that doctrine, whether they profess it or not. We avowed it,
and pledged our lives and fortunes and sacred honor to support it on
the fourth of July, 1776, and under it we grew up from a weak to a
strong and mighty people. The doctrine crossed the water. When Mr.
Webster, in his speech in 1843, at the completion of the Bunker Hill
monument, undertook to sum up what it was that America had done
for mankind in the seventy years, nearly, that had then elapsed, he
mentioned a few inventions and a few new plants and new animals
which had been contributed by this continent, and then he said that
the one thing which we had done for the world was the avowal and
illustration of this doctrine, that however poor or however humble a
man might be, or whatever was his occupation, he was the equal in
rights, the equal in dignity, the equal in capacity for improvement, in
the presumption of the law, to every other man. Well, Europe began
to adopt the doctrine. France established a republic; England
becomes nothing but a republic, “hooped,” as somebody has said of
her. In Spain, Italy and Germany, the doctrine is spreading; and lo
and behold, 75,000 Chinamen landed on our shores and the great
republic has struck its flag! Men are not free and equal any longer!
God has not made of one blood all the nations of the earth any
more!
My friends, there is nothing in this world, if there is any lesson of
history to be depended upon, which God visits with a surer and a
severer punishment than the violation of this law. Just think how we
have undertaken to violate it in the case of the negro; and think of
the terrible retribution in desolated homes, in debt and squandered
treasure, and in the loss of precious human life, He exacted of us.
Just think of our dealing with the Indians! Why, excluding the five
civilized nations in this country, there are about 170,000 Indians, all
told, including those in the states and including those on the plains.
There are 34,000 Indian children, according to the estimate of the
Indian Bureau, which I think is a little underestimated—certainly not
more than 40,000 Indian children of school age in this country. I
suppose Gen. Armstrong could tell you he could take the whole of
them and educate them at one hundred and fifty or two hundred
dollars apiece. Why, that number of Indians is less than one-two-
hundred-and-fiftieth part of the population of this country to-day. If
you should gather them all into a city they would not form a city the
tenth in population among the cities of America; they would not
make two average Congressional districts out of our 293. And yet, in
the mode in which this country has dealt with them, considering that
good faith, honor, honesty, respect for property, respect for its own
word, was out of place, from the time when Washington said that
was our policy, almost in the words I have uttered, down to the time
when the Ponca Indians were driven from their homes, and half
Boston rushed to make itself an accomplice to the crime, our history
has been marked by a disregard of this law, and has been marked
by the terrible retribution which God has exacted of us. The Indian
wars and the cost of supporting the Indians, of transportation and of
military police, are estimated by a very thorough and careful
estimate which I received from the statistician in the Treasury
department the other day, at between five hundred and six hundred
millions of dollars. I think it amounts to a thousand millions. The
interest on the interest of what we have paid for Indian wars would
take every Indian child of school age and give him a competent
education.
Now, my friends, we have gained one thing in the history of our
treatment of the Indian, and we have gained one thing in the history
of our treatment of the negro. It has been demonstrated by a
sufficient number of individual instances that both these races,
having their own peculiarities and their own defects, as the white
man has his own peculiarities and his own defects, are fit for
civilization, for law, for education, for the family, for the home, for
the arts and the industries which belong to civilization and peace.
Take the case of the negro, whom we have not all learned to respect
as we should. I sat in the House of Representatives with seven
members of the negro race, and you could not find seven men in
that House, chosen on any principle of selection, who were the
equals of those seven men, or who certainly were their superiors, in
everything that indicated the conduct of an honorable, sensible and
capable representative of the people. I should like to have you take
the Congressional Record, and read the speeches of the old slave-
masters, and then put by their side the speeches of the slaves! Why,
the great orator and statesman of the Southern Confederacy,
Alexander H. Stephens, when he came back to the public service,
announced weeks beforehand a speech that he proposed to make
upon a political question of the day. The House and the country