Journal Article An Equation for the Price-Level of New Investment Goods Get access B. R. Shenoy B. R. Shenoy London, England Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 47, Issue 1, November 1932, Pages 138–149, https://doi.org/10.2307/1885190 Published: 01 November 1932

Development of large-scale industry, 465. — Support of the idea of economies of large-scale production, 465. — Results of statistical tests of relation of size to efficiency, 467. — Scope and method of the present study, 468. — Limitations of the method used, 474. — Smallest companies show highest earnings, 476. — In some industrial fields, earnings decrease as investment is increased, 476. — Final comparison of earnings of large and small concerns, 478. — Conclusions, 478.

In late years the number of students who have enrolled for the courses in the accounting curriculum in collegiate schools of business has been increasing tremendously. This increase is almost appalling when one considers the strain which is being placed upon the educational set-up, particularly as it applies to the accounting courses. A program of work which has been outlined for small groups of students becomes totally inadequate when the numbers increase to considerable proportions. Coupled with the adjustments which may be necessary because of larger classes, there is also the responsibility of recognizing present-day trends in accounting and business and adapting the accounting curriculum to these trends. The problem of critical analysis of the curriculum is one which is often delayed indefinitely, if not put off altogether. That there is need for such analysis and probably for much change cannot be denied. Most curricula in accounting are the result of haphazard growth and not of careful planning. There is very definitely a challenge in the present situation for colleges to appraise carefully the equipment needed by the accounting-trained man in the years ahead of him and to adapt the training given him to that need.

allowed for, the decline was steady after the middle of I929. Early in August I930, the items without such adjustment reached a seasonal low point; but the gain thereafter fell short of the full seasonal movement until the middle of November. Then appeared the unusual demands which subsequently dominated the situation, and brought the volume of currency above the figures reached at the previous peak, late in I920. Chief among them has been the demand for the purpose of hoarding; but the published statistics are subject to many influences in addition. These published figures are simply a count of our currency which is held outside the United States Treasury and outside the federal reserve banks. They thus include the pocket money of individuals, till money held by merchants and others,

GENERAL business, after an important advance in April, declined during the remainder of the second quarter of I932, and stood in June at a new low level for the depression (Chart I, p. II3). Money rates, which had as early as February begun to ease from the peak following the I93I gold panic and bank liquidation crisis, declined in each month of the quarter. Speculation continued in its downward course during the quarter; and, largely in response to the Federal budget crisis and the renewed loss of gold, the declines in April and May were especially sharp.

GENERAL business in the United States, already severely depressed at the close of I930, declined sharply during 193I; and, by the end of the year, the depression had become one of the longest and most destructive of which we have record. Early in the year some improvement actually appeared, and was reflected in numerous series measuring the volume of business. But this incipient revival was cut short as the world financial crisis became acute and introduced a new phase of contraction and liquidation. Even commodity prices showed some signs of stabilization during the year, especially in the third quarter; but the main course of prices continued downward, with the most severe declines affecting chiefly certain agricultural and mineral products entering largely into international trade. Severe as were the renewed curtailment in business activity and slump in commodity prices during I93I, with the attendant increased unemployment, reduced wage payments, impaired business earnings, and frequent commercial failures, the most sensational developments were in banking and currency. The overshadowing event of the year was the world monetary crisis, which reached its most acute stage in the drive on the gold standard of the United States in SeptemberOctober. For a few feverish weeks it was feared that the dollar as well as the pound would be driven from the gold basis. In spite of an unprecedented drain of gold abroad, suspension of gold payments in England, and stupendous shifts in the banking situation here, it presently became clear that the gold standard could be maintained in the United States. The panic then subsided, gold export halted and was followed by a substantial return flow, and the problems of reconstruction could be attacked with assurance that a greater disaster had been averted. The world crisis was accompanled, in its various phases, by the chief characteristic developments: huge international gold movements, from countries of impaired credit to the stronger centers; active flight from weakened currencies; widespread hoarding of currency, with preference for gold-standard currency rather than domestic currency; suspension of gold payments in numerous centers; acute banking difficulties, with severe liquidation of commodities and securities. In the United States, the banking system, already weakened by the prolonged depression and drastic liquidation, was subjected to an unprecedented strain. Hoarding, bank runs, and bank failures became more serious factors in the situation. The resulting pressure for liquidity in the closing months of the year contributed largely to the final wave of drastic liquidation which drove stock prices to new low levels and forced bond yields far above the current rates on money.