A BUNDANT supplies of all forms of energy are to be found in the United States: in addition to huge coal resources, the country possesses large reserves of crude oil and natural gas as well as plentiful water power. These sources of energy are not, of course, distributed equally over the country and, therefore, the distances between the localities in which each type of fuel is produced and the areas in which it is consumed differ very widely. On that account prices at which primary and, consequently, also secondary types of energy (e.g., coke, manufactured gas, and electricity generated in thermal power plants) can be supplied, as well as the relative prices of the different fuels themselves, vary from place to place. Electricity is generated practically all over the country. In addition to electricity, consumers generally have a choice among solid, liquid, and gaseous types of fuel. Whenever the nature of a production process does not make it imperative to use a particular type of fuel, the decision as to which form of energy will be utilized by an industry will depend partly on its relative cheapness. For present purposes it has been assumed, however, that mechanical processes generally call for the use of electricity. In heating processes, the number of possibilities is reduced accordingly as higher temperatures are required. For instance, a temperature exceeding 3s500F can only be attained by aid of electricity. Nevertheless that does not mean that all such industries are solely dependent on electricity. The requisite electric current need not necessarily be obtained from the grid, but might be generated by plant on the premises. The I947 Census of Manufactures shows that several of these industries do in fact purchase other fuels in order to produce electricity themselves. Furthermore, it should be borne in mind that all forms of energy are suitable for heating factory buildings. By utilizing the data derived from the aforesaid 1947 Census of Manufactures an attempt is here made to compare the elasticity of substitution of gas with respect to solid fuels (coal and coke), liquid fuel (fuel oil), and electricity.