BETWEEN I 9 I 9 and I92I the REVIEW OF ECONOMIC STATISTICS published several studies of the balance of payments of the United States, which pointed to the conclusion that the War had made us a nation. We assumed that this term, which was well established in economic literature, had a definite and generally accepted meaning; and we did not undertake to define it. In recent years it has become clear that we should have defined the term with care, and that the United States has not become a in the sense that we intended at that time. Whatever their origin, and this is not important for present purposes, the terms and became well established in economic literature by the end of the nineteenth century. England was a nation. From interest on foreign investments, earnings of ships, and various other items in her annual accounts she had a large balance in her favor, which enabled her to import commodities greatly in excess of her exports and so to pay for a large unfavorable balance in such accounts. Upon the other hand, the United States, with a large balance against her on account of the invisible items, exported commodities greatly in excess of her commodity imports, and thereby paid her debts. Clearly the term had reference to a country's position on account of the invisible items in her balance of payments, and the visible proof of that position was the existence of an excess of commodity imports. If usage had been guided wholly by the idea of an annual reckoning of a country's international accounts, the terms might as well have been applied differently; and a country with a sufficient excess of commodity exports might just as well have been called a country. But interest on foreign investments bulked so large among the invisible items that a country, like England, that had long exported capital was in the old and familiar sense the of the countries to which her capital had flowed. Therefore it was natural that the country with a balance of invisible items should be called the nation, and the country showing a surplus of commodity exports should be termed the debtor. All this, of course, related to transactions on income account, and disregarded capital transactions which in any year might temporarily make a country a debtor if it exported an unusual amount of capital. Thus the richest country might be temporarily in debt, and export gold to balance her total accounts in any year; while at the same time, and for just the opposite reason, the poorest debtor country might temporarily become a and receive gold imports. Those who follow the exchanges from month to month, or try to determine a country's position at the end of every year, must of course consider capital as well as income transactions. But a country's normal position as debtor or is not determined by the capital transactions of any year, but by those on income account which are the ultimate determinants of a country's international position. If, therefore, economists are to use the terms and country, they should disregard capital transactions and consider only a country's normal position on income account. According to the older usage, therefore, a country was one which in any normal year had a balance in its favor on account of the invisible items entering into its foreign transactions on income account. Visible items might have been considered instead of invisible; but they were not, and this was probably because the countries having favorable balances of the invisible items were also the countries that made foreign loans or investments and therefore were creditors in the old-fashioned and legal sense of the word. This we believe to be a correct account of the term creditor nation as it was used prior to the War. Obviously a may be a debtor on account of the invisible items but so largely a on account of the visible items (commodity exports) that its total income account for a period of years shows a balance in its favor. Should such a be classified as a debtor? Obviously not, unless the term is going to be used in a technical sense not conducive to scientific insight and con-

Abstract This article presents the need for a research program in accountancy. A longer-range objective is the application of research findings to actual accounting situations, in the hope that they may be helpful in establishing better standards for both accounting training and accounting practice. From suggestions submitted by the accountants consulted in this connection it is evident that the word research must be taken in a broad sense to cover the activities proposed. The task is not one of merely collecting facts, or even of suggesting interpretations and applications of such facts. Many of the problems which are most in need of solution call for a coordination and rationalization of existing current thinking and practice in respect to various aspects of accounting. Thus it seems that a research program in accountancy must include not simply studies in the theoretical and economic aspects of accountancy but also in the legal and social aspects of its practice. The word practice, too, is here used in its broadest sense, to include not merely the professional activities of public accountants but also the duties and responsibilities of accountants at work in the service of government and of private business.

Reviews two books on accountancy. "Problems in Business Statistics," by Theodore H. Brown; "Laboratory Handbook of Statistical Methods," by T.H. Brown, B.F. Bingham and V.A. Temnomeroff.

Erroneous statements of the law, 78.— The correct version, 79.— The validity of the law: theoretical considerations, 86; the conclusions to be drawn from the facts, 87.— Reasons for these results, 95.— Implications of the study, 100.— Conclusion, 101.

Reviews the book "The Cultural Significance of Accounts," by D.R. Scott.

Abstract The costs of medical care have been the object of study for several years by a research staff engaged by the Committee on the Costs of Medical Care. The Committee is composed of fifty members, including physicians, dentists, nurses, educators, social workers, social scientists, labor leaders, and industrialists. The purpose of the study has been to determine the amount and distribution of the present costs of medical care, with a view to suggesting methods by which costs of production could be reduced, or by which the financial burden of sickness could be more equitably distributed. Many other individuals and agencies also have been concerned with studying the costs of medical care during the last several years, and the committee has drawn upon their research in the attempt to deal with the problem. Monographs on special subjects have been presented from time to time, and the publication schedule of the committee includes twenty-six titles. Sometime during the year 1932 there will be issued a final report composed of an analysis and interpretation of the findings, with recommendations for the correction of undesirable conditions.

Abstract A few year ago, particularly 1925 to 1930, certain tendencies in corporation finance were much under discussion among both accountants and lawyers. The accountants, by defining Earned Surplus, have indicated their approval of the subdivision of surplus into Earned Surplus and Capital Surplus and the lawyers, through Section 25 of the Uniform Statute, have shown that they favored a required subdivision of surplus which will produce separate accounts for paid-in surplus, revaluation surplus and surplus profits. Statutory provisions make it clear that accountants and lawyers still believe that the consideration given for shares of stock is an important indication of "capital," and that they still think of dividends as realized profits and not as capital returned. The most generally accepted use tends to associate the word surplus with profits or at least with the amount available for distribution. Therefore Paid-in Surplus will sound to most people like paid-in profit and Revaluation Surplus like revaluation profit and both will seem as if they should be distributable as dividends.

Reviews the book "Law for Laymen," by Harold Dudley Greeley.