Page:Hints About Investments (1926).pdf/123

 in misleading—"lying in every line" as he puts it—language much stronger than I should care to use has been employed by Sir Josiah Stamp; as a leading official of the Inland Revenue office and the director and secretary of a great industrial company with interests in many others, he has had unique opportunities for judging figures as exponents of facts. Usually a restrained writer, fond of the apt and judicious rather than the emphatic phrase, he holds the loud pedal down hard when he deals with the balance-sheet. As witness:—

"Our modern fetish of a 'safe' or 'sound' balance-sheet . . . lies in almost every line and yet is approved professionally because it overstates no assets and understates no liabilities, while it has valuable premises written down to negligible figures and reserves hidden in innumerable places, or profits 'held up' and 'tucked away.' 'The truth, the whole truth and nothing but the truth' cannot be derived from the modern balance-sheet so vaunted for its prudence; but prudence is just as possible without departing from what a balance-sheet ought to be—a faithful record of the employment of the total capital invested in the business, whether as an original outlay or retained profits, from which the true rate of profit on invested capital can be determined.