Reviews the book "Business Organization and Management," revised ed., by Elmore Petersen and E. Grosvenor Plowman.

The article discusses contemporary theories of corporate profit recording. Every substantial rise in prices brings with it many problems and many suggestions of economic reform. After World War I there was a strong movement for the stabilization of the dollar. The fluctuating dollar was the culprit, and legislation was proposed to stabilize prices by varying the gold content of the dollar. Since World War II accounting seems to be the chief culprit, and many stimulating articles have been written to this effect. Accounting is said to contribute to price inflation in two ways: (1) by providing misleading information upon which wage demands are based, and (2) by creating false optimism on the part of business men. One of the most recent criticisms of conventional accounting methods that has come to this writer's attention is that of Roy A. Foulke in his pamphlet, A Study of the Corporate Theory of Profits.' Mr. Foulke believes that accounting should account for economic values and for real profits. MacNeal recognizes that the term economic value is synonymous with market value when he states:".. . the economic value of a thing is its market price and that alone." At the other extreme is the only adequate method yet suggested for reporting real income, that presented by Sweeney in his book Stabilized Accounting.

The chief importance among the factors giving rise to business statistics is modern large-scale business enterprise. The development of this form of enterprise has brought a separation of management from actual operations. This has been true not only for top general management but also for top departmental or technical management. As a result of the change, management has been compelled to develop a technique of relatively remote control. The essential feature of the new technique of remote control by which top management bridges the gap between itself and actual operations is the more effective use of records. As a result, accounts have become of much greater importance for management. But the new management has come to require also records of data outside the double-entry system. Management now finds itself with two different kinds of records on its hands: accounting records and statistical records. The managerial experimentation which has developed business statistics is like the operation of a military force in the field.