The data to be presented will, first, give information concerning the trend of profits in the steel industry and, second, information concerning the manner in which profits vary with changes in the size of the corporations in which production is carried on. Two conclusions of general import will be brought out, one of which indicates that profits in the steel industry, the trend of which has been downward, have been moderate, the other of which points to the conclusion that the optimum size of a corporation is a function of the total economic situation, that is, it is a variable. The point of departure will in each instance be a brief reference to some accredited opinion. The data in the first section of the paper which deals with the trend of profits, is that of the United States Steel Corp. The second section considers the way in which rationality may be given to the belief that large industrial units are productive of lower production costs, when at the same time it is acknowledged that many relatively small firms report higher rates of earnings.

Accounting is usually regarded as an adjunct of commerce or industry which has at the most a tenuous relationship to the structure and theory of science and slight discernible similarity to of political organization. It was no accident that the double entry system of accounts was introduced in Italy. Accounting centers around two classes of records, the balance sheet and the profit-and-loss statement. Taken together they exemplify the mechanical theory of physics as well as the physiological or organic theory which is associated with evolutionary processes in which time is cardinal. An initial and fundamental point of contact and the basis for both the physical sciences and accounting is present, to begin with, in the number system which is common to both. The number one is primary in that every other number is divisible by it, thus presuming the homogeneity and divisibility of those things to which the numbers are assigned. Their homogeneous and divisible character is further amplified by the operations of addition and subtraction.