I. Dr. Kuznets' methodological scepticism, 40. — II. Lederer, Loewe, and Carrel on equilibrium economics; the empiricorealist as circular reasoner, 42. — III. The equilibrium concept and economic dynamics, 55. — IV. Rosenstein-Rodan "discovers" orthodox economic theory, 63. — V. Business cycles and the Laws of Chance, 67. — VI. The program of Empirico-Realism provides neither a synthesis nor a call to economic theorists to abandon their evil courses, 81. — VII. The real problem of economic dynamics, 86.

Journal Article Control of Investment versus Control of Return: A Criticism Get access R. S. Meriam R. S. Meriam Graduate School of Business Administration, Harvard University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 44, Issue 3, May 1930, Pages 549–552, https://doi.org/10.2307/1885797 Published: 01 May 1930

Accounting has been offered in some form to students in engineering schools for at least twenty years. It is only recently, however, that serious consideration has been given to this subject as an integral part of the required curriculum. The fact that engineers were entering positions of administrative responsibility in which their technical training was not directly applied, brought to the attention of engineering faculties the need for some adjustment in their established curricula. The collegiate Schools of Business started their phenomenal growth about the same time as the movement for industrial management in engineering and largely for the same reason. The first call for business training came from concerns that needed trained accountants and cost analysts. Somewhat later, the schools of business began to give more attention to the fields of marketing and finance which at present occupy a considerable part of their attention. The accounting courses in engineering should be a part of a management training program fitted into an adjustment of the curriculum of the existing courses in mechanical, electrical, civil and chemical engineering.

This paper deals with only that part of the broad subject of depreciation which relates to the method of accumulating adequate reserves through which to retire property that ceases to be useful. The discussion is further restricted to the field of public utilities as they exist in the United States because of the special conditions under which their operations are conducted. Nearly all public utilities are subject to regulation by governmental bodies, usually state commissions. Theoretically, their operations are monopolistic, and one of the primary functions of regulation is to fix rates which will yield a return to investors consistent with that which they could obtain from investments in other industries with similar risks. Refinement in such accounting is in many respects more important than in other industries operating on a competitive basis with prices determined by the law of supply and demand. The early years of public utility history were devoted to pioneering and development work, with comparatively little attention to accounting.

In many of the institutions it has been necessary to increase the size of classes in accounting in order to meet the increased demand for this type of instruction. The number of students enrolled has increased much more rapidly, than the growth in the faculty personnel. This situation has brought some very difficult problems of teaching technique. The "Accounting Exchange," having as its purpose the presentation and discussion of teaching methods and material, has been turned over to a newly-formed committee appointed by President Rosenkampff. The limitation of adequate reading assistance for one thing has hindered the conscientious instructor in the grading of student papers. Furthermore, the many deviations from predetermined solutions, various interpretations of problem statements and the wide divergence in speed capacities of students working under examination conditions, all add to the difficulties of equitably grading the results attained by the typical questions and problem method. An attempt is being made this year at the University of Minnesota to adapt the objective type of examination to the large elementary courses in accounting.

This article focuses on the budget program instituted by the production department. The chief problem will be to produce the goods in time for their sale. In order that this may be done, or that production and sales demand may be coordinated, an inventory record of the finished goods must be kept. These records will include a control over the minimum and maximum amounts of inventory which should be on hand. The production department may consider it best to follow the lead of the sales department by manufacturing the product for the seasonal demand and shutting down until production again becomes necessary. This is the practice in many industries. In the first place, the practice of working at a high pitch for a few months of the year is not the best way of using plant and machinery. Second, it is often more economical to buy raw materials when the season is over and the demand less. Third, it is well known that men do better work when operations are regular than when they are forced to turn out rush orders.

The Committee on Research of the American Association of University Instructors in Accounting has assembled certain material on the subject of appreciation for review by the membership at large. Thus, an opportunity will be afforded for criticism, and for the expression of any opinion which any one may have to offer. Appreciation, because of conflicting theories and opinions held by various parties at interest, presents one of the most trying problems with which business men, lawyers and accountants have to deal. Much of the difficulty probably results from the failure to make a thorough study of the subject from all its angles. Certain graduate students at the University of Illinois, under the direction of professor A. C. Littleton, have prepared a report on a survey made by them on the subject of appreciation. This material appears in the article under the main headings and is followed in each instance by the comments of certain members of the association. In seeking a definition of appreciation, an extensive search through the accounting literature fails to yield a very rich return. The fundamental idea of an increase in values is, of course, always present.