Journal Article Notes on the Elasticity of Substitution: I Get access L. Tarshis L. Tarshis Cambridge Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 1, Issue 2, February 1934, Pages 144–147, https://doi.org/10.2307/2967621 Published: 01 February 1934

Journal Article A Rejoinder Get access L. M. Fraser L. M. Fraser Oxford Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 1, Issue 2, February 1934, Pages 141–143, https://doi.org/10.2307/2967620 Published: 01 February 1934

Abstract The article focuses on asset valuation in dividend decisions. The law is greatly concerned with keeping intact the amount of capital contributed by stockholders so that most of the general corporation statutes prohibit the payment of dividends from that contribution. This limits the source of such corporate distributions to surplus, which is the excess of the assets over liabilities and capital. In order to determine whether or not a corporation has a surplus, it is necessary to value the assets so that a comparison may be made with the total of the liabilities and the capital stock. The paper reviews the Great Britain and the U.S. dividend decisions involving asset valuation with the object of learning what assets are recognized and how they are valued by the courts when they compute the amount of surplus available for dividend purposes. In the valuation of corporate assets, money due but not actually received may be considered if there is no reasonable question of payment. Among the receivables recognized in the dividend decisions are accounts, notes, overdrafts, loans, bonds and guaranties.

Journal Article Burns, Production Trends Get access W. L. Crum W. L. Crum Harvard University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 48, Issue 4, August 1934, Pages 742–748, https://doi.org/10.2307/1883549 Published: 01 August 1934

T HE major purpose of this article is to trace the recovery in profits, and figures at least as frequent as quarterly are needed. It is desirable also to exclude certain types of corporate enterprise: railroads and other utilities, banks and other financial concerns. Unfortunately there are no quarterly figures which give an adequate coverage, or even an approximation thereto, of all industrial corporation profits in the aggregate. We base our discussion of the quarterly record on aggregate data for a small list of leading industrial corporations (Chart i), which publish quarterly reports in a form available for this purpose.' The list is not a highly satisfactory sample of all industrial corporations, and it seems likely that the resulting figures give an over-favorable indication of the degree of revival in profits.

IN addition to their customary significance for the interpretation of economic conditions, commodity prices have at present a peculiar importance because of the emphasis placed upon them in the discussion of official attempts to stimulate recovery. During the formulation and operation of the recovery program, great emphasis has been laid upon the supposed necessity of inducing an advance in prices. Destructive price cutting was listed as a chief form of excessive competition, and stable or advancing prices were regarded as necessary in order to bring to an end the wave of liquidation. The advance of particular types of wholesale prices, especially those of agricultural and some other basic commodities, was accepted as a means of achieving at least in part that redistribution of wealth (income) which was one of the announced objectives of official policy. Officialdom did not overlook, moreover, that advancing prices are generally considered a symbol of improving business, and would therefore have a favorable psychological effect. Various items of official policy accordingly had the elevation of prices as an important, if not their main, objective. These policies appeared not merely in'the handling of the money problem, with the actual devaluation of the dollar and the continuing threat of inflation, but also in numerous phases of the attempted control of agriculture and other industries. The systematic purpose to raise prices was so frankly and clearly indicated in the so-called recovery legislation, in the related administrative regulations, and in the frequent and emphatic official pronouncements, that it seems almost unnecessary to recall the facts. Through it all the official mind 'clearly supposed -or wished to be thought to suppose that there existed somewhere between producer and consumer a great slack which could be taken up, so that the advance of prices received by producers need not be transmitted in full and in all cases into an equivalent advance of prices paid by consumers. Allegedly excessive increases in prices to consumers were frowned upon, and somewhat energetic measures were taken to prevent or discourage such increases. It was a no time officially' promised, however, that consumers would not be called upon to foot a large portion of the bill for recovery ultimately, if not immediately.

T HE present economic situation is controlled by three groups of forces: natural revival forces, official recovery stimulants, and the reform program. It is not my purpose to dwell upon classification niceties, but brief attention to such points will serve as a helpful beginning. We might instructively classify the items of the official economic program under three heads -relief, recovery, and reform. In such a classification the relief items, or those concerned primarily with relief, would bulk very large. A two-category classification, which merges relief with the others, brings out a most important clash of opinion as to public policy: the clash concerning the wisdom of jeopardizing recovery in order to achieve reform. Earlier, indeed, a clash of opinion appeared on another point: should we attempt a stimulated recovery, or let nature take its course? It is doubtful if, by the spring of I933, any considerable body of opinion favored entire reliance upon so-called natural forces for a cure of the depression. Even the outgoing Federal Administration had taken energetic actions, in limited areas, to facilitate or promote recovery. But a very substantial body of opinion not very popular among the mass, and particularly the suffering mass, of our people clearly favored a main reliance upon these natural forces. According to this opinion a more or less natural recovery had already begun in the summer of I932; the I933 bank crisis was a final, and perhaps avoidable, destructive episode in the readjustments incident to the depression; the reopening of the banks and the other confidence-restoring incidents at that time provided the essential impulse toward a vigorous upward movement; and government actions might well be confined largely to granting specific relief in certain areas where hardship was so acute as to impede general recovery. Under existing political auspices this issue as to whether natural forces should be relied upon is largely academic: the present Administration from the start insisted on action. Once that decision had been made and it had undoubtedly been reached long before March I933 it was certain that official policy would aim at stimulated, rather than natural, recovery. Even after this basic decision was made and became known, some critics still urged that all stimulants should be withdrawn as promptly as possible, and that natural forces should be allowed to resume their functioning. This view, in its extreme form, has little chance of being heard under existing political conditions; but in its moderate form it is likely to have and is already having important influence upon public policy.