Abstract Reviews the book "Accounting Manual for Small Cities of the State of Washington," by Arthur N. Lorig.

So long as the marginal propensity to consume out of is greater than that out of profits, any rise in wage rates at the expense of profits will the aggregate marginal propensity to consume-since the marginal propensity to consume out of will receive an increased weight relative to that out of profits-thus raising the level of income that can be supported by a given level of investment and federal expenditure. And the marginal propensity to consume out of will be higher than the marginal propensity to consume out of profits so long as the average wage income is lower than the average profit income, which may be expected. This for two reasons: (1) the marginal tax rate on high incomes is higher than that on low incomes; (2) the evidence shows that the marginal propensity to consume out of disposable income is lower at higher disposable incomes. It is occasionally asserted that wise business policy would favor increasing wage rates at the expense of profits, since the consumption effect would the general level of activity and reverberate to the benefit of profits. The argument runs as in the previous paragraph until an increased level of income is proved a consequence; then the conclusion is drawn that higher aggregate profits will accompany the higher income level. Whether or not the last step of this argument is taken with tongue in cheek, it is interesting to see whether total profits can be raised through decreasing the relative profit share of income and, if they can, what the conditions are under which they may be so increased and whether these conditions may likely prevail. Mathematically it can be shown that there are conditions, extreme but not unreasonable conditions, under which the raise profits through higher wages argument is valid; the conclusions mathematically arrived at can be demonstrated verbally. The analysis here is entirely static: the values of all economic variables are assumed to be mutually determined by simultaneous solution of demand functions and economic identities. For simplicity, all functions are taken as linear. The conclusions can be stated as follows: 1. So long as government expenditure and investment are constant a rise in wage rates at the expense of profits will increase aggregate income but decrease profits, if the marginal propensity to consume out of is less than unity. 2. When we complicate our system by admitting relationships between, e.g., investment and income, or government expenditures and

Introduction, 490. — I. General comments, 491. — II. Application to equity assets, 494. — III. Components of the money supply, 497. — Trust funds and financial corporations, 502. — Personal holdings, 502. — Nonfinancial corporations and unincorporated businesses, 503. — Commercial banks, 604. — Market behavior, 505. — IV. Conclusion: the future of idle balances, 507.

Abstract The Smaller Practitioner; This thinking gives support to George O. May's statement that "Accounting has developed from a service department of business to become a social force." It also suggests that public accountants are aware they must accept new obligations to society as their technology becomes a social force. They have clearly accepted the duty to get qualified people into the profession. The support given to university education in the subject and to the work of providing suitable technical examinations and of fostering effective legislation is a part of this activity. So too, is the stress now placed upon selective recruiting and the development of a program of personnel testing. It is also a social obligation, as well as sound firm policy, to aid staff people to attain full competence. To this end some firms provide special training for beginners and diversify the experience as an aid to their professional growth. These small firms, located for the most part in the smaller business communities, would often prove to be missionaries for good accounting in business.

Abstract Two papers in the July 1946 issue of the journal The Accounting Review were originally presented before the May meeting of the American Association of Collegiate Schools of Business in the U.S. They were, The Public Accountant of Today and Tomorrow, by John W. Queenan, and Education for Public Accounting on the Collegiate Level, by Dean H.T. Scovill. In the discussion that followed the presentation of the papers, Professor W.A. Paton considered the topic treated by Dean Scovill and later made his remarks available for use in this article. The history of cost accounting has not yet been written. But when it is, its roots will be found reaching a long way back in time. And the wonder will be that, with such a start, it could take so long to evolve into the still uncoordinated cost accounting procedures that were typical of the nineteenth century. It is easier to recognize the factors which in the twentieth century produced an extraordinary acceleration in the development of accounting systems in general and cost accounting in particular, than it is to understand why a good start was so slow in gathering momentum.

rrHE scheme of putting our federal debt wholly into two forms, consols and currency,l is obviously too radical for early political consideration. Its virtue is that of indicating a direction for policy which, wisely pursued, would perhaps involve numerous steps and only gradual institutional change. Much can be said for focusing attention upon the radical, ultimate objective, namely, an economy where all private property takes exclusively the forms of government demand obligations (currency or full currency equivalents), government consols (always in process of elimination, save during total war), corporate common stock, and fee interests in real assets (along with an inevitable minimum of business accounts-receivable and

Abstract Reviews the book "The Evolution of the Budgetary Concept in the Federal Government," edited by Catheryn Seckler-Hudson.

Abstract If an example were sought from accounting to show that living language changes, the word "surplus" would be a good one to use. It was not originally a bookkeeping term, having come rather late into accounting from earlier use in law. Its antecedent in bookkeeping was profit. But before the noun "surplus" became as prominent in accounting as is the noun "profit," it passed through a long chrysalid stage in law as an adjective in the phrase "surplus profits." After the middle of the nineteenth century the term "surplus assets" appears in court cases, especially cases in Great Britain. In 1869 "whole surplus" was used in referring to assets of an enterprise in dissolution. Surplus assets, it was said, must be distributed pro rata. In 1889 the courts referred to dividing the surplus after payment of liquidation expenses. In 1896 a court tried to link the two terms by saying that surplus assets means surplus profits, and then explained that surplus assets are those remaining after payment of debts and recoupment of capital. It was perhaps not well understood until more recently that the word "profits" always carries within it a reference to "surplus assets," but that the phrase "surplus assets" does not always connote "profits."