T HE study of the structure of world trade and payments which has been under way for several years at the National Bureau of Economic Research aims at preparing and analyzing a record of the economic relationships between different parts of the world. The technique, following the path marked by the League of Nations in its Network of World Trade,1 shows within the framework of a relationships between reporting areas and partner areas. But we seek to make two major advances: (i) to link the record of merchandise transactions to records of other types of transactions so that associated services transactions, transfers, capital movements, gold transactions, and multilateral settlements can all be observed in relation to merchandise; and (2) to link the record of merchandise transactions to the record of real movements in particular commodities so that the analysis of international financial problems can be related to the price and quantity elements underlying the money figures. We have compiled much of the material we set out to secure. This paper reports our progress in the first major step. It presents the rationale and results of our review of country payments accounts for a single year, I95I, showing the structure of inter-area transactions and the emerging pattern of net settlements. To give some perspective on the changing structure of international relationships, I present in the final section an anlysis of the merchandise account for the four years I950-I953. Herman Karreman, in a companion paper, reports on transportation transactions of the same period. I have not attempted in this paper to develop the analysis in the other direction, which would be an elaboration of the merchandise account into its commodity components. Nor have I completed the analysis of the payments accounts for I95I. For one thing, final judgment on the method of constructing the record of international transactions for a single year rests on the materials for all types of transactions for a period of years. For another, now that we have a preliminary five-area matrix for I95I, I intend to enlarge the analysis, dipping below the aggregates to see what patterns can be discerned by a more elaborate analysis. Many features of international economic life are hidden by the particular scheme of aggregation which we followed for practical reasons. But these aspects of the I95I story must await exposition. The paper summarized here is the fifth and Karreman's the sixth public report to emerge from the Bureau's work on the subject. The first was my I954 report, On the Elaboration of a System of International Transaction Accounts. 2 The second, Observations on the Structure of World Trade and Payments, I presented before the Subcommittee on Foreign Economic Policy of the Joint Committee on the Economic Report, November IO, I 9 5 5. The estimates given here are a revision and extension of those given before the Subcommittee. Cornelius J. Dwyer summarized his progress in the study of international petroleum transactions and Robert M. Lichtenberg reported on his in the study of the role of middlemen in world trade, before the annual meeting of the American Statistical Association in December

IN this paper we present the results of a new study of the demand for passenger automobiles, embodying a number of improvements over the attempts of previous investigators. In particular: (a) some account is taken of the influence of credit conditions on demand; (b) the dynamics of the market derive primarily from the accumulation of a stock of cars rather than from the rate of change of income; (c) the statistical work is carried out in terms of first differences to facilitate testing the influence of the variables. In the final formulation of the demand function, annual retail sales of new passenger automobiles are explained by: (i) real disposable income; (2) the stock of passenger cars on the road, January I; and (3) the average real retail price of new passenger automobiles divided by the average number of months' duration of automobile credit contracts. The price variable is, thus, an index of the monthly payment associated with the purchase of passenger automobiles. Use of this variable involved an estimate of a retail price index and of the number of months' duration of credit contracts. The source and nature of these estimates is taken up in the Appendix. Finally (4), we use a dummy shift variable to account for the special conditions of the automobile market in years of severe production shortage. The demand was estimated by least-squares linear regression with the variables expressed in first differences. For purposes of summary, the results are expressed in Table i as elasticities computed by reference to mean values. The statistical demand schedule fits the observed behavior of the market very well. When the equation is expressed in first differences, the coefficient of multiple correlation is .93. When calculated changes are added to sales of the preceding year, the correlation between actual and predicted levels is .98. It is particularly notable that the sensational rise in demand in

Reviews the book "Principles of Accounting-- Introductory," by H.A. Finney and Herbert E. Miller.

Reviews the book "Accounting II," by Leo A. Schmidt.

The article presents information on material cost of production. Materials to be manufactured must also be purchased, received, stored and delivered to the production centers; none of these expenditures are "manufacturing" costs, regardless of the fact that some manufacturers include them as part of manufacturing expense or burden. The latter practice is, decidedly, an improper incidence of expense. In this manner, the inventories of raw materials and stores would always remain at delivered cost, as Goods in Process account was charged at that cost. The costs of purchasing, receiving and storage would then be charged to Goods in Process, as an additional material cost. The procedure means that the costs of purchasing, receiving and storage, as these occurred each month, would be charged to an account but labeled as "Unapplied Material Burden." These costs, obviously, would be absorbed into Goods in Process each month on the basis of the value of the materials used.