be met by an assessment upon the funds of the several organizations contributing to the institution, or these may be contracted for, or procured on credit. When procured on credit the bills must be paid from the first profits, and it is to be distinctly understood that the officers incurring the debt are responsible for the payment and not the Government. The Quartermaster's Department is authorized to sell for cash to exchanges at cost, with price of transportation added, such articles of fuel, forage, light, furniture, and fixtures, as may be needed and can be spared from stock on hand.

9. Exchange features.-An exchange doing its full work should embrace the following sections: (a) A well-stocked general store in which such goods are kept as are usually required at military posts, and as extensive in number and variety as conditions will justify; (b) a well-kept lunch counter supplied with as great a variety of viands as circumstances permit, such as tea, coffe, cocoa, nonalcoholic drinks, soup, fish, cooked and canned meats, sandwiches, pastries, etc.; (c) a canteen at which, under the conditions hereinafter set forth, beer and light wines by the drink, and tobaccos, may be sold; (d) reading and recreation rooms, supplied with books, periodicals, and other reading matter, billiard and pool tables, bowling alley, and facilities for other proper indoor games, as well as apparatus for outdoor sports and exercises, such as cricket, football, baseball, tennis, etc.; a well-equipped gymnasium possessing also the requisite paraphernalia for outdoor athletics. At small posts it may be impracticable to maintain all of these sections, but at every exchange there should be no less than two departments; the refreshment, embracing store, lunch counter, and canteen, and the recreation, which includes all the other branches.

10. Sale of liquors prohibited.—The sale or use of ardent spirits in any branch of the exchange is strictly prohibited; but on the recommendation of the exchange council the commanding officer may permit beer and light wines to be sold at the canteen by the drink whenever he is satisfied that giving to the troops the opportunity of obtaining such beverage within the post limits will prevent them from resorting for strong intoxicants to places without such limits, and tends to promote temperance and discipline among them. Should the commanding officer not approve the recommendation of the exchange council, it will be submitted for final decision to the department commander. The canteen must be in a room used for no other purpose, and when practicable in a building apart from that in which the recreation and reading rooms are located; the sale of beer must be limited to week days, and the beer consumed upon the premises. The practice known as "treating" will not be permitted.

The following is an extract from an act of Congress approved June 13, 1890:

"No alcoholic liquors, beer, or wine shall be sold or supplied to the enlisted men in any canteen [exchange] or post trader's store, or in any room or building at any garrison or military post, in any State or Territory in which the sale of alcoholic liquors, beer, or wine is prohibited by law."

11. Purchase and sale of goods.-Purchases will ordinarily be made by the officer in charge, or by the steward when so authorized, but articles in considerable quantities will be procured under contract by the officer in charge, with the approval of the council. In no case will orders for goods, however small, be given by the enlisted attendants to the person furnishing them, nor shall the steward or any employee of the exchange have, either directly or indirectly, any personal interest in the purchases, sales, or profits, or any advantage of wastage or perquisites of any kind whatever. Whenever contracts or agreements for purchases are made by exchange authorities, who by change of station or other cause are removed, such contracts or agreements must be carried out by their successors. The Subsistence Department is authorized to sell to the exchange at cost price any of the articles composing the ration, and such other articles as may be on hand for sale. But in reselling such goods in small quantities, no profit will be charged by the exchange beyond the fractions of cents that are necessary in making change.

12. Lunch room and price lists.—In the lunch room prices should be made as low as the cost of the articles, increased by expenses of the attendants, fuel, lights, and waste, will permit. Other than this the tariff of prices will be regulated by the circumstances surrounding each exchange. Printed or written price lists will be conspicuously posted in the various sections, and will be corrected when necessary.

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. If a man who is not likely to abuse the privilege has money for which he has no particular use on pay day, and desires to avail himself of the opportunity, it is frequently a wise policy to furnish him with a supply of checks; 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 officer in charge and regarded as a liability until redeemed.

14. System of keeping accounts.-It is not desirable to enforce a particular method of bookkeeping, or impose a special system of accounts upon exchanges. This will be regulated by the exchange officer, whose accounts should be so kept as to be readily understood by the inspecting officers, and to afford the information necessary to render the reports hereinafter prescribed. All business of the exchange must be transacted in its name, and not that of the officer in charge. Invoices, receipted bills, account books, and other papers relating to the business of an exchange pertain to its records, and will not be removed from the post, except in the event of its abandonment, when they will be forwarded to the Adjutant-General of the Army.

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 one-fifth 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 exchanges as "bills receivable" until paid. A man seeking credit privilege will be distinctly informed that credit is given upon the understanding that he must render prompt and unsolicited payment, and only to such men as can be trusted. Defaulters will be immediately debarred the privileges of the exchange, and this under such publicity as will make the act appear disgraceful in the eyes of their comrades.

16. Operating expenses.-To secure uniformity in rendering accounts and accuracy in preparing comparative statments, the following are specified as the items that properly enter into the account of operating expenses:

(a) Compensation of attendants;

(b) Unavoidable breakage, wastage, destruction, and damage;

(c) Insurance on merchandise, building, furniture, and fixtures;

(d) Taxes to which the exchange may be legally liable; licenses, either State, county, or internal revenue;

(e) The cost of books, blanks, and other stationery; fuel and lights, when not supplied by the Quartermaster's Department; necessary policing about the quarters, when not performed by the regular attendants; express and freight charges on articles that are neither merchandise nor permanent fixtures.

Transportation should not be charged to operating expenses, but added to the cost of the merchandise or fixtures to which it pertains. Repairs to quarters and repairs to and renewals of fixtures should be charged to buildings and fixtures, and not to operating expenses. License to sell beer and tobacco at a post exchange should be taken out in the name of the "Post exchange at Fort -," upon the application of the officer in charge, signing himself as "Agent of the Fort- exchange." 17. Distribution of profits.-When an exchange is absolutely free from debt, a sum sufficient to cover all anticipated expenses for at least one month will, at the end of each quarter, or oftener if deemed advisable by the council and commanding

officer, be taken from the cash on hand and set aside as a reserve fund; and the remainder, which will represent the net profits of the exchange for the period specified, will be disposed of in the following manner: (a) Five per cent will be paid into the regimental fund if a band be serving at the post; (b) Such sum as the council, with the approval of the commanding officer may determine, will be appropriated for the benefit of the entire garrison to all or any of the following purposes Laying out and preparing and cultivating gardens, and supplying seeds, roots, or plants for the same; the purchase of books, newspapers, periodicals, stationery, etc., for the post exchange or post library; the purchase of gymnastic appliances when there is no gymnasium connected with the exchange; prizes for athletic sports. The expenditure of profits for purposes other than these requires the approval of the Secretary of War. The remaining money may be divided among the organizations contributing to the exchange, on such equitable basis as shall be determined by the council, with the approval of the commanding officer. Where differences in this respect arise between the council and commanding officer the decision of the department commander will be final. The money thus distributed will be paid into the company or detachment funds. In addition to the dividends for the hospital detachment, the proportionate amounts for the sick in hospital who belong to the various companies and detachments that are members of the exchange will be turned over to the surgeon. Any variation from these rules requires the sanction of the Secretary of War.

A division of the cash resources after all debts have been paid will also be made whenever the troops, or any part of them, being members of the exchange, change station; in this event no deduction on account of the reserve fund will be made from the share of the withdrawing troops.

The amount of and loss that an exchange may sustain in consequence of the failure of a soldier to pay for articles properly bought on credit, whether by the desertion of the debtor or by his discharge and virtual repudiation of the debt, will be deducted from the share of the profits of the company or other organization to which the defaulter belongs. Losses by fire or other casualty, death of a debtor, depreciation of value of the fixtures, and deterioration of articles kept for sale, and the accidental breakage of fixtures or other property, will be borne by all the participating organizations in common, and should be deducted from the gross receipts before dividing the profits. Credit accounts should be treated as bills receivable until they are settled or found to be a loss, but bills receivable should not be included in the gross amount from which profits are resolved. The amount of cash on hand on the dates specified, after all matured debts are paid, and after setting aside as a reserve fund a sum sufficient to meet anticipated debts for a period not less than one month, constitutes the sum subject to distribution.

18. Reports.-The report required by paragraph 326 of the Regulations, showing the financial condition of the exchange, will be made on the blank forms supplied by the Adjutant-General, and will be rendered not later than January 10 and July 10 of each year. The semiannual report will also contain the names and compensation of the civilian employees; the number and extra pay of enlisted attendants, if any; the adequacy and condition of the quarters and the rental therefor, if any. Until otherwise directed, a special report will be made on the dates specified covering the following points:

(a) The amount received from the sale of beer;

(b) The amount received from all other sources;

(c) The quantity of beer sold, reduced to pints;

(d) The mean strength of the garrison during the period;

(e) The number of men at the post who do not patronize the canteen feature. Whenever the business of a post exchange is from any cause closed, a final report of the financial operations of the exchange for the portion of the half year not covered by previous reports will be rendered to the Adjutant-General of the Army by the officer in charge of the exchange. A similar report will also be rendered when an officer is relieved from the charge of the exchange, and will be accompanied by

the certificate of his successor, that all the property, including the books and other records, as well as the funds of the establishment, have been duly transferred to him. 19. Exchange membership.-Members of the exchange must be organizations, companies, and detachments. By "detachments" is meant an organization consisting of a number of enlisted men not belonging or attached to a company, such as the Hospital Corps, Signal Corps, or band. Individual enlisted men, such as post or regimental noncommissioned officers or individual members of the Hospital or Signal Corps, can not become members of the exchange unless three or more of them are associated in a mess. When an exchange is first established the exchange council will fix the amount of assessment or contribution that shall entitle an organization to membership, which will be a proportionate part of the expense attending the fitting up and stocking the establishment. Whenever a company or detachment applies for membership in an exchange already organized, a careful estimate of the market value of the property will be made by a disinterested officerpreferably a field officer-who, whenever practicable, will be assisted in the performance of the duty by a representative of each party in interest; these appraisers will be designated by the post commander. The estimate must be approved by the commanding officer, or submitted on appeal to the department commander, whose decision will be final. The amount to be paid by the incoming organizations may usually be determined by dividing the amount of appraisal by the total number of men composing the organizations that are already members of the exchange, which will give the per capita, and this multiplied by the number of men of an incoming organization will give its entrance fee. The sum thus paid into the funds of the exchange should be regarded the same as funds resulting from any other sale, and go to increase its cash account or working capital. It should not be divided among the members, excepting as it may become divisible at a subsequent declaration of dividends. A company joining the exchange, when unable to pay its assessment in cash may be charged with it, and such charge may be liquidated from the company's share of the profits of the exchange. An organization joining should pass to the exchange some written evidence of its debt and obligation to pay the amount assessed, and such paper should be carried on the books of the exchange as a "bill receivable" and be regarded as an asset which should be reduced in value from time to time as the profits are divided. When an organization, by reason of change of station or for other cause, desires to withdraw from an exchange, the value of its shares being determined, that sum will be withdrawn from the gross funds of the exchange and paid over to the withdrawing organization. Any amount due, but for lack of available funds not paid to a company when retiring from the exchange, should be paid out of the first profits accruing to the institution; the amount so due and unpaid should be carried on the books of the exchange as a "bill payable," and be regarded as a liability until liquidated. 20. Final disposition of business.-When notice is received that the entire garrison of a post is to be withdrawn and the post discontinued, the exchange stock will be reduced to the lowest extent possible and, so far as may be, converted into cash. Prior to the departure of the troops the property of the exchange will be sold and the proceeds, together with the cash, equitably distributed, under the direction of the council, among the organizations that are members. The officer in charge will make a final report of the matter through military channels to the Adjutant-General of the Army.

On the 2d of March, 1899, the same being section 17 of the act entitled "An act for increasing the efficiency of the Army of the United States, and for other purposes," Congress enacted the following provision:

"SEC. 17. That no officer or private soldier shall be detailed to sell intoxicating drinks, as a bartender or otherwise, in any post exchange or canteen, nor shall any

other person be required or allowed to sell such liquors in any encampment or fort or on any premises used for military purposes by the United States; and the Secretary of War is hereby directed to issue such general order as may be necessary to carry the provisions of this section into full force and effect."

In accordance with the concluding sentence of the above-mentioned act, the following was published to the Army under date of March 10, 1899 (General Orders, No. 38):

GENERAL ORDERS,

No. 38.

HEADQUARTERS OF THE ARMY,
ADJUTANT-GENERAL'S OFFICE,
Washington, March 10, 1899.

II. By direction of the Secretary of War, the following extract from an act of Congress is published for the information and government of all concerned:

"AN ACT for increasing the efficiency of the Army of the United States, and for other purposes. "Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled.

"SEC. 17. That no officer or private soldier shall be detailed to sell intoxicating drinks, as a bartender or otherwise, in any post exchange or canteen, nor shall any other person be required or allowed to sell such liquors in any encampment or fort or on any premises used for military purposes by the United States; and the Secretary of War is hereby directed to issue such general order as may be necessary to carry the provisions of this section into full force and effect.

"Approved, March 2, 1899."

By command of Major-General Miles:

H. C. CORBIN, Adjutant-General.

As a consequence of this publication, a large number of inquiries reached this office asking for an interpretation of the act in question; whether or not the sale of beer is absolutely prohibited; whether the Department will entertain exceptions; whether the rule applied to military camps where canteens were conducted and where there was no post exchange, and among others from the Board of Commissioners of the National Homes for Disabled Volunteer Soldiers as to whether the War Department construed the act in question as prohibiting the sale of beer at such Homes. For the purpose of determining the question, and in accordance with provisions of law (sections 356 and 357, Revised Statutes) which authorize the Secretary of War to require the opinion of the Attorney-General whenever a question of law arises in the administration of the Department of War, the cognizance of which is not given by statute to some other officer from whom the head of the Department may require advice, the following letter was addressed to the AttorneyGeneral:

The ATTORNEY-GENERAL.

WAR DEPARTMENT, Washington, March 24, 1899.

SIR: In practice the Government commissary stores constituting the regulation ration allowed for the soldiers in each company are required by the War Department to be issued by the commissary officer to the commander of the company, and the commander of the company is (by the same authority) required to have prepared for the mess table of the soldiers only such portion of the same as is found to be necessary at the time, and to sell the remainder and thereby constitute a "company fund" from which to supply the soldiers' mess table with desirable food not contained in the commissary stores drawn by him as regulation rations from the commissary officer, as above stated.

At every post where it is practicable the War Department required the post com