Introduction, 475.—I. Prewar undervaluation of price control by economists as an instrument of emergency policy, 476. — II. Relation of market structure to informal rationing by the seller, 478. — III. Relation of market structure to enforcement, 480. — IV. Price inflexibility as an aid to price control, 481.—V. Conventional pricing as a further aid, 483. — VI. The period of grace between price-fixing and shortage, 484. — VII. Constant and decreasing costs in relation to price control, 485. — VIII. Concluding disclaimer, and comment on administration, 488.

I. Provisions of the Reichserbhofgesetz, 465.—Amendments and modifications, 467.—II. Motives underlying the law: improving the immediate condition of the farmer, 467.—III. Social or national objectives: checking subdivision of farm properties, 469; establishment of a rural caste, 470; protection to the rural birthrate, 471.—IV. Effects of the law, 472. — The problem of new farm financing, 473.—Destruction of property values, 474. — Check to progress of landless toward land ownership, 475.—V. General conclusions, 476.

I. Some shortcomings of the usual explanations of price rigidities, 456.—The method of attack on the problem, 459.— II. The coexistence of monopoly power and rigid prices, 459.— III. The nature of the monopoly equilibrium and of the movement between positions of monopoly equilibrium as "causes" of rigidity, 463.— IV. The choice of rigid prices, as such, under conditions of monopoly power: 1. As an aid to oligopoly adjustment, 466; 2. As an aid to resale price maintenance, 468; 3. As result of the use of average costs in pricing, 470; 4. As result of monopoly inertia, 472. — V. Conclusions and bearing on public policy, 473.

Introduction, 394. — The definition of marketing, 396. — Retailing costs, 398. — Wholesaling costs, 398. — Manufacturer's marketing costs more difficult to estimate, 399. — Total cost of marketing in excess of 24 billion, 1929, 401. — Marketing costs compared with value added by manufacture, 402. — Income from marketing, 403. — Census of distribution facilitates estimate of marketing employment, 404. — Total marketing employment in excess of 8 million, 1929, 406. — Employment in marketing increased rapidly during the last two decades, 407. — Conclusions, 411. — Increasing specialization as a cause of increasing marketing costs, 412.

IT has become evident, from the discussions of the last few months, that the major unresolved question of mobilization policy in the United States is the role that should be assigned to direct price and wage controls. The disagreement holds, especially, for conditions of considerable but still limited mobilization. Given expenditures on the scale of those being made prior to the Korean War expenditures, it will be wise to recall, that were more modest in their achievement than in their volume there was effective agreement that direct controls were unnecessary. For full mobilization, a loose euphemism for what a country does if it has a full-scale war on its hands, there is something close to agreement that comprehensive controls over prices and wages are necessary or at any rate inevitable. But in mid-December, as this is written, plans are still being based on an intermediate situation. The transfer of resources to military use that is now in prospect promises to enforce an actual and perhaps a substantial reduction in civilian consumption. But it is not assumed that this will proceed to the point where, if the maximizing of military potential were the only criterion, the reduction in civilian living standards would have to stop. In this situation as the President indicated in his speech announcing the declaration of a state of emergency the decision has been taken to invoke direct controls. It would not appear, however, that this decision is based on an agreed or even a clear view of the role of these controls in the strategy of defense against inflation. This becomes evident from even a brief review of the discussion of recent months.

PROFESSOR DESPRES' review of Effects of Strategic Bombing on the German War Economy in the November issue of this REVIEW presents one of the comparatively rare occasions when an author is justified and perhaps even obliged to take issue with his reviewer. His interpretation of this report is both erroneous and casual; to allow it to pass unchallenged would imply concurrence in an egregious misreading of the report and, much more important, would perpetuate a false interpretation of the German war economy which it was a major task of the report to correct. Professor Despres begins his review with a handsome compliment to the authors for the light they throw on the German war economy. We (and our colleagues for whom we are presuming to speak) are grateful and we shall not be a whit less generous than Professor Despres. He was a leading member of the able group of economists whose advice to the Air Forces it was, in some measure, our task to appraise. It is our conviction -and one shared, we believe, by our colleagues on the Survey,1 -that the economic intelligence developed and the recommendations on targets derived represented a high level of achievement. In challenging Professor Despres' criticism of the report, we should like to be clear that we do not claim perfection for our handiwork. Its shortcomings, however, are not the ones Professor Despres discusses. He taxes the authors with recurrent confusions in economic analysis a blanket indictment which he does not feel obliged to substantiate. We find him guilty of lack of diligence in reading the report and of leaving confusion where there was none before. Professor Despres begins by accepting the central contention of the report, namely, that Germany's economy during most of the war was not in the technocratic state of total mobilization surmised by many foreign observers. The civilian population was not squeezed to the physiologically attainable limit, and the national industrial plant was not exploited to the technical optimum. The fascist political and economic equilibrium was different from that of the democratic countries, yet it was anything but stable there were class conflicts that were bridged but not solved, and divergent interests that were compromised but not unified. This social and political framework imposed insurmountable limitations on the volume of output and on the degree of mobilization.2 A wrong (or naive) theory of the monolithic nature of the fascist state gave rise to an equally wrong notion that the sky was the only limit on Germany's technocratic efficiency. By agreeing on this point, Professor Despres clears the way for his most serious objection. He believes the authors stumbled into a booby trap set up for them by General Thomas when they accepted his view that Germany's preparations were insufficient. A fairly superficial examination of the report (particularly of Chapters I and II) would have convinced Professor Despres of the absurdity of his charge. Germany's war preparations are there described as fully adequate for the kind of a war that Hitler hoped to conduct and win. For a program of aggrandizement based on threats, blackmail, and occasional police action, armament in width i.e., an impressive volume of available arms, exceeding by far the one at the disposal of the Western Powers was all that was needed. The report then makes clear that General Thomas and his colleagues on the General Staff never underwrote Hitler's strat-