Journal Article Economic Theory and Socialist Economy Get access A. P. Lerner A. P. Lerner London Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 2, Issue 1, October 1934, Pages 51–61, https://doi.org/10.2307/2967550 Published: 01 October 1934
Notes on the Elasticity of Substitution: II Get access A. P. Lerner A. P. Lerner London Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 1, Issue 2, February 1934, Pages 147–148, https://doi.org/10.2307/2967622 Published: 01 February 1934
Journal Article The Concept of Monopoly and the Measurement of Monopoly Power Get access A. P. Lerner A. P. Lerner London Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 1, Issue 3, June 1934, Pages 157–175, https://doi.org/10.2307/2967480 Published: 01 June 1934
Journal Article Fluctuations in Capital and the Demand for Money Get access S. P. Chambers S. P. Chambers London Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 2, Issue 1, October 1934, Pages 38–50, https://doi.org/10.2307/2967549 Published: 01 October 1934
Journal Article Machinery and the Cigarmakers Get access John P. Troxell John P. Troxell New York City Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 48, Issue 2, February 1934, Pages 338–347, https://doi.org/10.2307/1885612 Published: 01 February 1934
This article focuses on the sources of capital surplus. Capital surplus may be defined as an excess of contributed capital over legal capital. American courts have developed many theories, among them the "trust fund," "the fraud," and the "holding-out" doctrines, to support the established rule that the legal capital of a corporation may not be reduced except through formal amendment of the corporate charter or as a result of operating losses in excess of accumulated surplus. In the eyes of the law any net worth in excess of legal capital is surplus, and in the absence of statutory provisions to the contrary, may be used by the board of directors for any desired purpose. These concepts of contributed capital and legal capital are of fundamental importance to the accountant. It seems hardly necessary to emphasize before a group of accountants the importance of distinguishing between contributed capital and earned capital. But to the lawyer and the courts, legal capital is the important fact, and no matter how much the accountant disapproves of certain legal definitions of capital he must recognize that the force of law makes them facts, and that these facts should be shown on his financial statements.
One of the most bitterly contested provisions of the Securities Exchange Act of 1934 was the provision relating to marginal transactions and maximum loanable values of securities. Two different provisions were incorporated in the bills of the House and Senate, the resulting act being a modification of the House bill. Marginal transactions have long been the subject of reform movements. The Hughes Committee of 1909 was requested, specifically, to inquire into margin trading. A Federal judge furnished the Senate Committee with instances from his long experience on the bench, indicating that a large proportion of business failures, embezzlements and even suicides in recent years were directly attributable to losses incurred in speculative transactions. Measures were suggested during the last session of the U.S. Congress to abolish margin trading and the Senate Committee deemed the radical step unwise only because of the deflationary consequences which might follow. Marginal transactions involve the buying and selling of securities with the aid of borrowed money. The amount of money which the purchaser or seller must advance has in the past been a matter of agreement between the customer and the brokerage house. Funds advanced by the customer represented an advance for the protection of the brokerage house, not for the protection of the customer.