In the May number of this REVIEW Mr. Everett E. Hagen made some criticisms of a recent article of mine.' These criticisms I shall here attempt to answer. Mr. Hagen asserts that my assumes a decade of technological stagnation. That is not true; I merely recognize the fact that as defined by the Department of Commerce, is not a measure of the real but is a purely monetary concept, which cannot be reduced to terms of goods and services by means of price deflators, because it includes so many elements that have no price and in recent years so many that would have no value whatever in years of normal peacetime prosperity. It is not a measure of but of expenditures, confusing out of with out of capital, and not distinguishing between productive and unproductive. The gross product is increased by government deficits, no matter for what purpose incurred; the real product, the total of useful goods and services, which is the only proper measure of labor productivity, is not increased by government deficits unless those deficits are incurred for the production and not merely the redistribution of useful goods or services. A reduction in government spending in the next few years would reduce the gross or at least its rate of growth; it would not necessarily reduce and would likely cause an increase in the volume of useful goods and services produced. To a large extent the criticism just directed against gross product applies to national and to a slightly smaller extent it applies also to payments. Income include a large amount of transfer income, not resulting from current production by the recipients or by their property, such as pensions, interest on war debt, and payments by non-income-earning corporations out of their capital. Disposable income eliminates government pensions and interest on war debt in so far as they are paid for out of personal taxes; it also unfortunately eliminates currently productive governmental activities. To the extent that the real can be measured by calculations of income, and disposable income between them come closest to filling the requirements, but neither is as good as consumer expenditures or the sum of consumer expenditures and gross private capital formation. Something also might be said in behalf of gross less government deficits. My optimistic estimate shows the following annual rates of increase from I940 to I950:

mHERE has been a growing tendency among economists to recognize the inadequacy of the simple acceleration principle as the explanation of investment activity. The qualifications and reservations that must be made for that principle to hold true in the real economic world have caused some economists to deny it virtually all validity. For instance, Professor Hansen says, is well known . . . that the simplified conditions usually assumed when the Principle of Acceleration is under discussion are rarely valid in the actual world. When more realistic assumptions are introduced, it is clear that the effect of new consumption upon investment is a very complex and uncertain one. 2 In this paper, the acceleration principle first will be set forth in its virginal simplicity. Then in Part II, the qualifications that theory suggests will be noted, and it will be seen how these are borne out by the statistics on investment in freight cars in the United States.3 Through these investigations, we hope to show that the acceleration principle does in large part serve to explain investment activity if additional variables are introduced and our theory is enlarged so as to include the effects of these variables. Since it has been dealt with so fully elsewhere,4 only a brief sketch of the so-called simple acceleration principle will be made. To put it most concisely, net investment is proportional to the rate of change of consumer-taking.5 Or, as J. M. Clark said, If demand be treated as a rate of speed at which goods are taken off the market, [demand for] maintenance varies roughly with the speed, but new construction depends upon the acceleration. 6 Another version of the doctrine is that the per cent changes in the stock of capital goods equal the per cent changes in the consumption of their products. This second version holds that in the first statement the constant of proportionality the constant of acceleration equals the amount of capital per unit of output the capital intensity. It is clear from the very outset that the abovestated theory is an over-simplification and that it does not describe the course of actual economic events. In Chart i the year-to-year per cent changes in the total number of freight cars are

Abstract The article focuses on accounting for the dairy products industry. Twenty-five years ago the milk from a cow would arrive at the consumer's door step about twelve hours after milking time. Today this interval is much longer. The entrepreneur plays a much larger part in the dairy business than formerly. In fact, the processing distributor is almost a monopolist in the large metropolitan areas. It should be stated that accounting technique in the dairy industry has kept pace with technological advances and the transition from the horse and wagon to the paneled milk truck. In the heyday of the farmer-distributor no complicated accounting problems were encountered. Monthly receipts could be set off against comparatively few expense items. The farmer did not think in terms of depreciation, reserves for bad debts, or obsolescence. It can be truthfully said about accounting for the dairy industry that although the hours are long and the toil sometimes irksome, there is never a dull moment. Accounting for depreciation of equipment, machinery, and trucks likewise is a topic about which a separate article could be written.

Abstract The author has intentionally digressed from the limited subject of this article to emphasize the importance of the kind of experience any one should have who expects to do successful work in the office of a public accountant, and the author believes that the same situation holds as a requirement for taking the examination. It seems to him; therefore, that the existing situation is such that practicing accountants should realize the importance of this matter, if they are to attract to the profession the best of the material available. Of course, the aptitude tests now being developed by a special committee may be of great value to accountants in the selection of personnel, and the great advances made by the colleges in accounting pedagogy will result in much good. Results show that the essential ingredient is not theory, or book learning, but practical experience, and it seems logical to state that, if this profession is to maintain and to increase its prestige among the professions, its present members must see to it that those whom they would attract to the profession are properly trained in the practical aspects.

Abstract Fixed assets are, in a sense, deferred charges to operations. It is from this viewpoint that they should be valued on the balance sheet of a "going concern."Recently there has been a change in emphasis on the part of accountants from the balance sheet to the income statement. In line with this change of emphasis, fixed assets should be given balance-sheet values in line with their efficiency as producing agents. The efficiency of each fixed asset has to be determined by its comparison with other available assets that could be utilized to perform the same service. The sacrifice of depreciation and interest having been made at the outset, an asset value is set up on the balance sheet. It is thus evident that the balance sheet amount is the present value of future periodic charges on account of depreciation and interest. If it is desired that the periodic charges for depreciation and interest total the same for each period, the compound interest or annuity method of computing depreciation and interest should be used.

Abstract Accounting training for the government service seems to be headed for a much larger role in the accounting curriculum than it had before the war. Most of the reasons for this trend existed before the war, although wartime problems have reinforced them. The problems of accounting training for the government service are not peculiar to the government service except in the case of fiscal operations. In general, the requirements of government and the parallel requirements of industry present an excellent opportunity for a dynamic accounting program in universities. As a result of the experience afforded by the war, the changes, which may be required, can be made more easily. Accountants have more information in a great many fields than ever before. There is a growing feeling in all walks of life that the professional groups must break out of their insulated pigeonholes. Many people in other fields are aware of this situation and are making plans to correct it. The accounting group has an interesting time ahead of it.