foreign supply curve AC and demand curve JM are unaffected by devaluation, while, upon devaluation to the extent indicated by AB(=JK), the home supply curve in terms of foreign currency shifts downward from its initial position (not drawn), passing through J, to KM, and the home demand curve in terms of foreign currency shifts downward from its initial position (not drawn), passing through A, to BC. Thus M is the new equilibrium position in the export market, and C that in the

RECENT contributions by Professors Evsey D. Domar I and Robert Eisner2 have analyzed the conditions under which current depreciation allowances equal, exceed, or fall short of current replacement requirements. The (substantially identical) findings of both authors may be briefly summarized as follows: In a seasoned plant,3 the ratio between replacement needs and depreciation charges depends primarily on the direction, as well as the rate, of the change in (a) gross plant size and (b) the general price level. If prices are stable, straight-line depreciation charges based on original cost and spread evenly over the true service life equal current replacement in a stable plant and exceed it in a growing plant. Under price inflation they keep below replacement requirements in a stable plant, whereas in a growing plant this may or may not be so, depending on the growth rate on one hand and the rate of inflation on the other. On the basis of the formula by which both Domar and Eisner have attempted to describe the algebraic relationship among depreciation, replacement, and growth, it would appear that, if we have stable prices, a constant rate of growth of about the size that has characterized the American economy for a long time, and an average service life of capital assets roughly in accordance with American reality, depreciation charges computed in the manner indicated must exceed replacement requirements by a considerable margin. This would mean that these allowances, to the extent they are earned and saved, can finance a sizable portion of the expansion. A corollary result would be that, under the stated conditions of growth and average asset life, it takes a heavy inflation to wipe out the excess of depreciation charges over replacement needs, and a very heavy one to turn the excess into a deficit.

So far as unemployment in general is concerned, there is now agreement that most of the predictions for the reconversion period 'were too pessimistic. A few of the forecasts follow. In a report released by the Office of War Mobilization and Reconversion three days after the surrender of Japan 3 it was stated: There will be 5 million or more unemployed in three months. By spring unemployment may reach about 8 In a research study published early in I945 by the Committee for Economic Development ' it was predicted that unemployment would probably reach a peak of at least 4 or 5 million workers during the transition, and that under adverse circumstances this total might approach iO or even I5 million. In a pamphlet, published in I943 by the Postwar Division of the Bureau of Labor Statistics,5 the following statement appears: If industry hesitates and delays the change-back to full-scale civilian production, unemployment may run up to I 2 million or more in half a year's time, whereas it may not go beyond 7 million subject to offsets by means of public works if management, labor, and government tackle our joint problems with real courage and intelligence. Actual unemployment estimates of the Bureau of the Census, covering the period July I945 to March I946, are given in Table i.