This PDF Is a Selection from a Published Volume from the National Bureau of Economic Research

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This PDF is a selection from a published volume from the National Bureau of Economic Research

Volume Title: Annual Report of the Director of Research 1934-1935

Volume Author/Editor: NBER

Volume Publisher: NBER

Volume ISBN:

Volume URL: http://www.nber.org/books/annu34-1

Conference Date:

Publication Date: Feburary 4, 1935

Chapter Title: Annual Report of the Director of Research 1934-1935

Chapter Author(s): NBER

Chapter URL: http://www.nber.org/chapters/c12278

Chapter pages in book: (p. 1 - 29) .-1' - pPtt 1 t ?

, k ' • •.• r NATIONAL BUREAU 1I OF ECONOMIC INCORPORATED RESEARCH

0 the Director f. Annual Report of • I •. )i — ••'• I £ of Research Id I•j I I 1934-1935 '. ,- 1 'k L •-•. 'i - -. \_ .( t .1L- 1L1- - i I t_- • •- I •, — FEBRUARY 1 i . NEW YORK F I •_• 1819 BROADWAy , ' 'rl' r_,. p — 1935Officers CHARLES OSWALDJOSEPH W. KNAUTH.GEORGE SHEPARDH. WILLITS, SOULE,Chairman MORGAN, President Vice-President Treasurer A. BUSS, Executive Secretary OSWALD W. KNAUTH Directors at Large SHEPARDELWOOD MEAD, MORGAN, Unitedmissione, of Reclamation Vice-President, States Corn. I Our Fifteenth Year N.GEORGE Bureau,ChaseConsultant National Inc. BankI. STONE, Industrial SOULE, Director, and Financial The Labor II Researches in Progress INCOME Estimates of Nafrional Income HARRYWALTONEDWINHARRY W. LAIDLER, JEROME,rector, WisconsinExecutive Di. F. GAY, HarvardThe H. HAMILTON, Yale League Directors for Industrial by University Appointment JOSEPHWESLEYHARRY ALVINH. WILLITS, MILLIS,C. MITCHELL, PennsylvaniaChicago Columbia L. C.GEORGE MARSHALL, ExecutiveNationalDemocracyand Secretary, Company 0. MAY,Isdustrial Price, Recovery Board GEORGELEE DAVIDDirectors FRIDAY, American GALLOWAY, American E. ROBERTS, American Appointed by WaterhouseOther Organizations ManagementEconomic Association Association Bankers Association FREDERICKMALCOLM ARCH W. SHAW, NationalC. RORTY, AmericanM. FEIKER, American Engineering Council Research Staff Publishers Statistical Association Association Studies of Professional Incomes ARTHUR F. BURNSSIMON KUZNETS WESLEY C. MITCHELL,EUGEN Director ALTSCHUL. Associate LEO WOLMAN FREDERICKFREDERICK C. MILLSR. MACAULAY THEWAGESPROFITS FORMATION AND OF LABOR BUSINESS OFAND PROBLEMS CAPITAL THE ENTERPRISES CONSUMPTION PUBLICPRICESBOND WORKS YIELDS, AND PRODUCTION INTERESTCURITY PRICES RATES AND SE. BUSINESS CYCLES AND SECULAR TRENDS III Publications PUBLICATIONS INBooks ig PUBLICATIONS INBooksBulletins PROSPECT IV PlanningV Personnel Bulletins I. Our Ffteent/z Tear bulletins,of plishment,NINETEENEconomic but Research evidenced knownhundred inhas and fullto been thirty-fourthe only aworld year to this ofatin substantialthelarge inner National by circle. books accom- Bureau We and hadhavebeen carried had free better on from for physical severalfinancial equipmentyears anxieties; yielded than researchestheir hitherto, harvests. whichwe Early have we in the spring we moved our offices to quarters that are better adapted to our needs than any we had previously occupied; the arrangement of the space has afforded us facilities for efficient work and for the additional research assistants required to carry forward the program outlined in last year's annual report. We published more volumes in 1 g than in any earlier year and the progress made in the various sec- tions of our program gives us prospect of at least maintain- draftsing this upon publishing our staff pace andOur incollaborators. 1935.chief embarrassment Dr. Leo Wolman has arisen from government was serving as Chairman of the Labor Advisory Board of the National Recovery Administration when the year began; later he became Chairman of the Automobile Labor Board in Detroit. Dr. Frederick C. Mills was chairman of the Com- mittee on Government Statistics and Information Services sponsored by the Social Science Research Council and the American Statistical Association, of which he was president in 1934. Dr. Simon Kuznets was still consulting with the Department of Commerce upon income estimates in the winter and spring. Your Director of Research served as a member of the National Planning Board and of its successor, the National Resources Board. Federal appointments also 5] postponed the completion of Dr. Willard L. Thorp's history of BritishincomeDr. Ralph foreign estimates C. Epstein'strade, and and of Industrial delayedDr. A. G. somewhat ProfitsSilverman's in the the publication study United of uponStates. our staff membersThat and the collaborators Federal government is a tribute makes to so many demands their standing as authorities in their several fields. We recognize also that participation in governmental work brings fresh information, wider Contacts and often keen insights into economic problems. In the long run the National Bu- reau gains from the public service rendered by its investiga- worktors;zealdelays. but, despite of ourinThat the staff,these we short haveadvance embarrassments run, been its planning ableplans to suffer ofaccomplishis financesdue interruptions to the by a scientific goodour Execu- andyear's partmentEstimatesEARLY of of m Commerce National1932 the IncomeUnited to prepare States estimates Senate called of the upon national the De tive Committee, and the generosity of donors. Bureau'sincome in earlier 1929, work1930 in that field, the Department invited and 1931. In view of the National our cooperation. The arrangement made was that Dr. Simon Kuznets should be "retained by the Bureau of Foreign and a formalDomestic "Acknowledgment" Commerce to plan put and it: "Dr.supervise Kuznets, this whostudy". was As in full charge of the work, was responsible for the preparation of the final estimates, as well as the organization and the text of the report." The Department also acknowledges BulletinSenateofEpstein"extremely the National on giving and January generousMiss aBureau's summary Elizabeth3,The assistance" staff,report of Jenks. the particularly was byestimates. severalcompleted Missother In Aprillate Lillianmembers in the 1933 and sent to the 1934. On January 26 we issued a full report was published under the caption, National In- 261come, pp.). 1929—1932 By June the January issue of our Bulletin was (Senate Doc. 124, 73d Cong., 2d Sess., exhausted, so we issued a second Bulletin giving the final II. Researches in Progress INCOME nicallyestimates one ofas thethey National appearAlthough inBureau's the Senate this volumes, report document. upon our share national in income is not tech- its preparation was so considerable and our interest in the [6 results so keen that we procured a sufficient number of 71 copies for all our subscribers, and had them bound uni- incomeformly with in years our seriesfollowing ofWhat publications. 1932 our shallrelation be tois notthe workyet deter- of estimating the national mined. The usefulness of these estimates for many purposes, practical and scientific, private and public, has been widely recognized since 1921 when we published our first report: Income in the United States: Its Amount and Distribution. There is no longer any question whether it is worth while ticalcanrequiresto bestmakeskill, be knowledge sucha madespecial estimates. is combination aof very varied But important how types of and economicof byquestion.data, whom enterprise, theory, the The estimates work statis-and good judgment. New materials are continually becoming available that can be used to revise past estimates and to improve current figures. Improvements upon the best that combininghasing been down done theglobal soitems far entries arein fresh needed into ways, their in the constituentand direction of learning elements, of break. more of about the personal distribution of incomes, particularly of incomes below the limits subject to Federal tax. If the work is reduced to routine on the basis of formulas followed without change year after year, it will fall far short of what is needed. In one important respect, a Federal bureau should agency;Federalbe in afor better bureaus, if proper position the connections income-estimating to cultivate are thisestablished field unit than shouldwith any other otherhave quirements.organization.Federalaccess to bureau data In But the that it hashope has could personnel notthat not yet the bebeen Department thatmade demonstrated meets available theof Commerceexacting to that a private any re- will develop or find men of the requisite skill and enterprise, the National Bureau is making no estimates of national the estimates of nationalMeanwhile, income published Dr. Kuznets by the andNational his assistants are revising income for 1933 and 1934, and is leaving to the Department the task of revising, on the basis of recent census and in. Bureau for the years 1909—28. New data that have recently become available—notably the Censuses of Distribution and come-tax reports, the preliminary figures for 1932 contained in the Senate document. of Construction—new methods that have been devised for estimating some of the old items, and a more detailed industrial classification make it possible to improve upon the results obtained by Dr. King. Manufacturing is being sub- merchandisingtrade.divided It intois not fifteen,is possible being and separated to mining carry thisinto into detailedwholesale five branches, mode and ofretail while treat- mustment be fartherbased upon back a than smaller igi; number the estimates of categories. for igog—i8 The revised figures for 1919—28 will soon be finished. It may seem desirable to publish them promptly, together with figures for 1929—32 taken from the Senate document, with the latest available revisions and extensions made by the Department of Commerce. As all who have made use of theincome results estimates announced realize, for any the single value yearof the than figures in compari- lies less in sons of the results for different years. The longer the time span covered by these comparisons, the more significant are the conclusions that can be drawn. Hence the effort to improve upon our earlier results has much more than an his- torical interest. It lends new meaning to the figures for the invaluablelatest year. aid In in addition, many investigations estimates of directednational towardincome other are an problems, and for that reason also should be made as reli- beenable and to secure detailed greater as the comparability underlyingOne of the dataNational among admit Bureau'sthe of. estimates long cherished hopes has of national income compiled for different countries. The figures now available are based upon concepts of income that differ in significant ways and upon classifications that are baffling in their variety. In some countries the definitions followed are not stated and the methods of compilation are [8 left exceedingly vague. In an effort to promote cooperation 9] among statisticians concerned with income estimates, we requested Dr. Kuznets to attend the meeting of the Inter- national Institute of Statistics in London last April. He presented a carefully drawn analysis of 'Current Problems in Measurement of National Income', concluding with the nomicstatementtional Research collaboration that, in stands the "task toready pass, of to bringingthe assist National as effectivebest Bureau it can". interna- ofWhat Eco- fruit this effort will bear remains to be seen. ofStudies tionnairesCommerce of Professional showing was permission the IncomesOne incomes of to the analyzeof by-products physicians, some 9,000ofdentists, our ques- work law- with the Department yers, accountants and consulting engineers in 1929—32. The returns collected from lawyers were found to be biased by a defect in the method of sampling; but those from the other four professions have proved satisfactory. The laborious job of tabulating and classifying the data has been completed and Dr. Kuznets' assistants are now preparing tables that summarize the results. For each of the four years covered, these tables will show the average size of the gross and the net income of each profession, the dispersion, differences between incomes in different regions and in towns of diverse sizes, the degree of inequality in the distribution of net incomes, and the persistence from one year to the next of toryindividual to a larger incomes investigation inWe their have rank of envisaged the in frequencythe distribution. this studydistribution as an experiment prepara- of personal incomes—a problem with which Dr. Macaulay dealt effectively in our second report published in 1922, but with which we have done little since. The scope of the ex- fromassistant, giving Miss much Eleanor timeThough Frankel, to the Dr. Nationalhas Leo carried Wolman's Bureau forward inpublic the 19, sys- service prevented him WAGES AND LABOR PROBLEMS his perimental study is elastic in that it may be confined to the tematic collection of materials bearing upon the American samplesmodefour professions ofof incomes treatment mentionedin otheris wise professions orcan extended best are be available.todecided cover whateverafterWhich the labor market. Through recently created Federal agencies, summary tables have been [socompleted. much new information has been made available concerning the dramatic changes that have occurred of late in wage rates, hours of labor, the membership and status of trade piredunions. and he resumed hisOn dutiesJanuary upon i, 1935 our Dr.staff, Wolman's his past leave of absence ex- experience with labor organizations enriched by his recent experiences as a government official. His program for the year includes first, the preparation of a Bulletin upon recent changes in wages and hours; second, completing a monograph upon Movements in Trade Union Membership since of1923 American Trade Unions, Volume 6 of our series; third,(the last year covered by his monograph, The Growth his comprehensive study of wage rates and working hours, Industrywhich he giveshopes what to have we wellOur believe publicationstarted to beby thethe of mostendDr. Harryof thorough, the year.Jerome's Mechanization of judicious and trustworthy analysis yet made of the effects of mechanization upon the volume of employment, upon the skill required by workers, upon fatigue, health, quality of products and various other factors. As Dr. Mills says in his prefatory statement, Dr. Jerome "provides an effective corrective alike for the visions of doom and for the prophe- 'F States)cies of apublished mechanical late millennium". inDr. 1934, Ralph aroused C. Epstein's keen interest Industrial among Profits in the UnitedPROFITS OF BUSINESS ENTERPRISES our Directors and should do the like among readers at large. Based as it is upon the best sample of corporation statements I yet obtained for study, the book makes a notable contribu- poratetionbusiness to Profits the enterprises. difficult as Shown problem byOur Audit second of Reports,measuring venture has in thejust this profits been field, sent of Dr. W. A. Paton's Cor- to the press. For the financial statements analyzed by Dr. Paton the National Bureau is indebted to the American Institute of Accountants. Though the number of corpora- tions covered is smaller than that in Dr. Epstein's sample and the period shorter, the individual statements give fuller details. The preface by Mr. George 0. May points out that much might be learned about the workings of our economic system if a broadly representative sample of audited finan- Bulletinaftercial year. statements last April couldon Recent Besidesbe made Corporate these available twoProfits books, for in analysis the the United National year Bureau issued a States.mon ThisFabricant, interesting who alsoanalysis rendered was preparedvaluable byhelp Mr. in Solo-preparing Dr. Paton's manuscript for publication. Banking and Credit appointedAs reported by THEthe last Social FORMATIONyear, Science"at the request Re- AND of CONSUMPTIONa Committee on OF CAPITAL search Council and presided over by Dr. David Friday, our Executive Committee authorized Dr. Kuznets to undertake a study of the production and disposition of durable commodities in the United States, as one way of measuring the formation of capital". This study broadened into an investigation of the durable, semi-durable and perishable goods produced for consumers and for producers in the years estimates available to the public. Since then, Dr. Kuznets A 1919—33,set of preliminary tables and memoranda containing the as valued both in current and in constant prices. and his staff have been checking the basic estimates derived leading results was presented in May to the Social Science from the Census of Manufactures and bringing the figures Research Council and given a limited circulation. In No- closer to date by using the Census of 193. It remains to vember we published a Bulletin which made the preliminary make a more intensive study of distributive margins with respect to their variations from good to bad years, to refine upon the preliminary estimates of the volume of construction, and to approximate roughly the consumption of durable goods. Without the last step the results will show only pretations,the gross however formation carefully of capital the and figures may are give explained. rise to misinter- Even rough approximations to the consumption of durable commodities of different types will be a valuable step toward determining the net growth of capital goods. Dr. Kuznets hopes that the statistical work can be completed before summer. Then he plans to start his final manuscript. The importance of the problem and the interesting character of the preliminary results published in our November Bulletin are day'sample committee warrant for suggested our Encouragedeffort that to perfect the by National the this success study. Bureau of Dr. be Kuznets' work, Dr. Fri- requested to make the next study in their program, and the Social Science Research Council has made an appropriation for that purpose. The committee calls this project 'Real Estate Financing and Economic Stability', and gives the fol- ciallowing field with reasons its own forThe modestreating financing of it operation as aof quasi-independent real and estate, its own urban standards andinquiry: agricultural, is a spe- of judgment. It is quite distinct from financing operations in sold.the This organized is a field markets which where has not stocks yet been and organized bonds are by bought a com- and prehensivetional scale. generalizing Meanwhile study new covering and comprehensive the situation information on a na- from government sources awaits analysis in terms of the general providedpicture, through with little official prospect channels. that such A systematization analysis will beof adequatelythis field and the work hitherto accomplished, like the early studies of the national income, should lay the ground for fruitful work [12 in the future. 'sIl Among the topics to be covered are the volume of rural and urban mortgage credit outstanding; the current changes in this volume; the sources of real-estate credit; the purposes for which real-estate owners borrow on mortgage; the cost and other conditions of the loans; the risks of real-estate mortgage finance; effects produced by expansions and con- tractions in the real-estate mortgage structure, and the or- Wickensganization as of chief the investigator.marketAfter for consultingreal-estate Dr. Wickens withmortgages. has Dr. been Friday working we engaged Dr. David L. for several years upon the farm-mortgage data collected by the Census, the Farm Credit Administration and the Bureau of Agricultural Economics. More recently he has been super- ingvising urban the real-estateanalysis of financing some 350,000 in sixty-five cities obtained by questionnaires concern- the Real Property Inventory—a Civil Works Administration project sponsored by the Department of Commerce. Dr. Wickens wished to see this analysis completed before he undertook a new responsibility. That task occupied him until the end of 1934; on the first of January he was ready to begin his work for the National Bureau, most of which must be done in Washington where the data are readily countryCommittee.available. has been It is approved an attemptA third in to principle study learn bearingwhat by wethe upon can Executive about the capital the resources of the negative items in the nation's capital account. These items include such diverse matters as depreciation and depletion charges, loss on sale of capital assets, payments by companies that insure against destruction or loss of property, repairs and renewals, shrinkages in stocks of goods, 'write-downs' of assets, and insolvencies. That the aggregate amount of capital which disappears in these ways is huge and variable capital losses. Our tentative caption for this study is 'Capital everyone knows; how great it is and how much it varies we Consumption'. The investigator in charge is Mr. Solomon can only guess. Yet even the most perfect statistics of savings, Fabricant who has for several. years been one of Dr. Mills' investments or gross capital formation will tell us little about research assistants. We expect that the work will occupy at net changes in our capital account until we can approximate least two years.

BONDprovements YIELDS, during INTEREST theDr. past Frederick year RATES in R. his MacaulayAND slowly SECURITY evolvedhas made some further im- PRICES analysis of bond yields, and their relations to short-time interest rates, commodity prices and stock prices. Several times this notable manuscript has been thought almost ready for publication; but each time the author discovered important changes that should be made and convinced your Di- rector of Research that postponement would enhance the ultimate value of the work. Even now, Dr. Macaulay is far from satisfied with his analysis and would like to take more time for reflection and revision. To decide the precise point beto carried which isefforts a responsible to perfect and a piece a delicate of scientific task. The work task should is particularly difficult in the case of an investigation so highly original and so far-reaching in its implications as the one under consideration. All of us must respect Dr. Macaulay's ardent quest of perfection and none of us can judge the as requestspossibilitieshe. But urgent for ofpermission inquiriesfurther advances concerningto use certain in his this ownof investigation, the thinking partial asresults and well in treating scientific or practical problems, keep us reminded willingthat impede what while we researchfurther should postponement elsewhere. do in such Thecases may responsibility rests improve primarily our of uponreport,decid- the it

'ii Director of Research. After much consideration he has had Dr. Macaulay's manuscript mimeographed and sent to the anDirectors opportunity of the to Nationalread the Bureau.text recognize Those ofits us distinguished who have had character. '51 relatedin 1934 lines of investigationDuringDr. onFrederick which the current we C. have Mills year been reports we engaged have upon carried the forwardwork of thehis twounitas follows: PRICES AND PRODUCTION for some time. Our continuing series of measurements of price changes have been kept up, and the index numbers of publicationproduction in and Economic productivity Tendencies which were have first been constructed extended. for duction',CertainBul1eins ofby our Charlesissued results during A. Bliss,have the beenand year 'Changes published ('Recent in ChangesPrices,in two Manu-of in the Pro- andtionFrederickfacturing recovery, of a report Costs C. with Mills). centeringand such Industrial Ourtreatment upon major Productivity, price of efforts production aspects have 1929—1934, of been movementsthe recession directed toward the comple- by and changes in purchasing power as may be necessary to round out the discussion of price changes. This study was first thought of as a rather brief monograph, an extension and elaboration of the price bulletins we have prepared from time to time. As the work has progressed, however, an expansion of the scope of the enterprise has seemed unavoid- able. With the initiation by the Federal administration of definite efforts to find some solution of depression difficulties through monetary action, changes in commodity prices have moved toward the center of the economic stage. This devel- opment required somewhat more extended treatment than we had first planned. We have felt, moreover, that the treatment of price movements by themselves would not be ade- quate. Certain related elements, notably production changes, The character and scope of the study are indicated by the had to be brought into the picture. Because of this expan- following list of chapters: III II I PriceTheGeneral Pre-Recession Movements Aspects of SituationRecentandChanges Related Price during Changes Economic Recession and Depression VIIV V Manufacturing Industries in RecoveryCapitalPrice Changes Equipment and the andRecovery FortunesProducers Construction of in Primary Recovery in sion, we did not carry out our first plan of rounding off the four major economic groups,The body as ofthese the werereport affected is concerned by the withVIII the fortunesVII The ofIX Consumer Summary in and Recovery Conclusions World Prices in Recovery workinginvestigation calls in for 1934. the, submitting of a manuscript to the The schedule on which we are now forces of contraction, and by the conflicting currents of the Board of Directors in 1935.[i6 culiaryears 1933 position during the entire period since the World and 14. Primary producers have been in a pe- productivity,War. Manufacturing and have facedindustries exceptionally have enjoyed difficult notable problems gains in aof position levels.readjustment The of strategicheavy brought industries, importance about as by aduring drasticspecial depression class,changes are in alwaysand price in stagecovery.theticular ofshifting economicTheir attention. placetides activity,Consumers, inof thebusiness havepresent finally, been activity. situation materiallystanding Alterations demands at affected the terminal par-in by the purchasing power of important consuming groups have ( played a role of critical importance in the events of the last system,five years. as it functioned Theduring emphasis a period in of this severe study recession is definitely upon the price and depression, and as it reacted to the stimulus of changes portencies,in ismonetary a continuation which and dealt other ofwith conditions.the the story modifications told In bysome Economic respects, occurring Tend- this in the 17] re-

J domestic economy of the United States during periods of expansion prior to and following the War. The present study is more sharply focussed, however, upon price phenomena. It departs from the pattern of the earlier book also in that it gives some attention to changing world conditions during tothe provide period since supplementary 1929.Our material for the price analysis. work in the field of production is not designed merely ductionHere westructure are aiming to determine first at a howcross-section productive survey resources of the are pro- utilized, and how productive energies are divided among various possible uses. We plan to make this cross-section sur- rialsvey as available of 1929, for that year. Beyond this, our present work is because of the relative richness of the mate- aimed toward detailed, accurate measurement of changes in the volume and character of production and in the productivity of labor in different industrial fields. During ig we have revised our index numbers of production, supplement- structeding the with somewhat measurements specialized of broader measurements scope and hitherto more gen- con- greatereral significance. precision changes in the productivity of labor in the We have also sought to measure with various manufacturing industries. When the manuscript on recent price changes is completed, we shall concentrate on the preparation of a report centered upon production and of Committeeproductivity.the planning on andRecent control TheEconomic Directorsof public Changes, will works recall an in that investigationrelation in 1929—30 to PUBLIC WORKS we made, for the permanentexisted for improvements; future construction; their variety;the important such programs administrative as theemployment.proposals movements to Thereuse of publicthe had economic works been considerableas mechanism; a 'balance wheel' butdiscussion the to factual stabilize of features encountered in the execution of public works proj- basis for a considered policy was lacking. Accordingly, the ects; finally, to examine, in theory and practice, the essential Committee wished us to undertake a preliminary but com- Whileelementsunder this of volumeproposed served programsWe a publisheduseful of control. purpose, the results its author, of our investigationDr. in Junethe 1930title: Planning and Control of Public Works. prehensive study of the volume[i8 of public expenditures on Wolman, felt that it should be followed by a more intensive inquiry. His chief assistant in the study, Dr. Arthur D. Gayer, became one of our Research Associates in 193o—i, Bureau,and Dr. Gayer presented a report which wecarried had under forward the work. After leaving the National consideration when the Public Works Administration was created and the country embarked upon a vast new experiment in stimulating construction to relieve unemployment. From the National Bureau's viewpoint it was highly desirable that this current experience be covered by Dr. Gayer Hence,planning1933, when of public the National works, Planningthe National Board, Bureau set up gladly in August con-employed Dr. Gayer to prepare a report upon the conditionwesented so desired.that that hewe use have Under the the materials this right arrangement, to hepublish had collectedhis Dr.manuscript Gayer for us, hasif on graphedreportthanbrought thatany at presenthisearliercovers survey book. andthe downsubjectwill This soon tonew in date be amanuscript moresent and to presentedthorough the is Directors. being fashionus mimeo- with a Statesand cyclical Since movements1870 is the ofDr.Threeoutcome economic Arthur of ofour anF.processes. publications Bums'investigation BUSINESSProduction in which 1934 CYCLESTrends in AND the United SECULAR TRENDS deal with the secu'ar he began when one of our Research Associates in 193o. Be- sides confirming the hypothesis that in most industries the 'I secular trends of production conform to a general pattern. 191 Dr. Burns demonstrates the existence of 'trend cycles'—a type earlierof movement investigators. that Thesehad not trend been cycles definitely consist established in increases by and declines in the rates of secular movement occurring simultaneously in many branches of production. This dis- covery opens up a fresh field of investigation of deep interest somewhatisalike to the simplified economic form theoristDr. theanother Carl National and T. the productSchmidt's economic Bureau's of German our techniquehistorian. Research Business Associates. Cycles, 1924—33 Using in for measuring cyclical behavior, Dr. Schmidt gives a clear and interesting account of the dramatic alternations of busi- whoness are expansion following and the contraction current economic in post-War fortunes Germany. of that All inenigmatic Business nation Cycles, will was find Professorprepared his analysis forJohn the enlightening. Maurice Committee Clark's on Re-volume, Strategic Factors cent Economic Changes. The National Bureau put at Pro- fessor Clark's disposal its statistical analysis of the cyclical Clarkbehavior sought of tomany show economic what among processes. the numerous On this basis factors Professor in modern business play roles of strategic importance and fford considerablepossibilities sales of purposive of this book control within over a fewbusiness months activity. of pub- The lication reflect the esteem it has won among men of affairs Eugenand economists. Altschul and Dr.The Fritz study Strauss of 'Agriculture made good and progress Business Cycles' by Dr. during 1934. Dr. Altschul lectures at the University of Min- spendskeepsnesota, his in but closeuniversity his touch work vacationsat thereall times is at relatedwith the Dr.National to Strauss. his work Bureau The here; general and he argument of the study as now conceived runs as follows: crop and these cycles react upon agriculture; the character and fluctuations cannot be regarded as an essential factor in busi- potency of the mutual reactions vary with the organization ness cycles, nor can agriculture be regarded as a fully indus- of farming and its place in the.economy of a nation; there trialized branch of production; nevertheless, agricultural disappears to be a secular decline in the divergence between locations influence the course[20 followed by industrial cycles businessthe two great cycles branches in the ofUnitedMeanwhile production. States, the Great National Britain, Bureau's France comprehensive study of and Germany has moved steadily forward. Having decided that March ig marks the terminal trough of the American Junebusiness 1929, cycle we beganthat began the inlaborious January 1928task of bringing our and culminated in statistical analysis of domestic time series up to date in the France,autumn1932 andof 1933. August More 1932 recently as marking we haveit in Great fixed Britain upon July andas marking the corresponding terminal trough in Germany. On this basis we have been adding the latest com- originalplete cycle transcriptions to our foreignWhen and series computations, completing also. our take analysis account of aof series, we check the any improved or additional data that may have become andhaveavailable introduce effected since the within improvementsour preliminary the past year in computationsour or techniquetwo. Thus were whichwe are made, we put- sonalrathertingpeculiarfor our variations.publication.elaborate measurements series, tablesIt and Theis not inhave work of manywise cyclical to is tobecases time rush made behavior aconsuming the ninth for work all table into but by because showingemployingafinal very form feweight sea- many computers, for each new recruit must be taught our rather elaborate technique and supervised closely for some time before he can be expected to contribute as much effi- baumciency whoas he is costs. in immediateThe following charge, shows tabulation, the status prepared of the by Miss Cicely Apple- I' statistical work at the end of 1934. 2 i] NUMBER. COUNTRY OF ORIGIN AND INTERVAL OF ANALYZED BY THE BUSINESS-CYCLE UNIT As of December 31, 1934NUMBER OF TIME SERIES COUNTRYORIGIN OF LIMINARYMONTHLY VISED SERIES QUARTERLYPEE- SERIES RE- LIMINARY PRE- VISED RE- LIMINARY VISED ANNUAL SERIESPEE- RE- LIMINARY VISED PEE- TOTAL RE- United Stat 412 FORM FORM ig6 7 FORM FORM75 12 FORM FORM64 24 FORM551 FORM67 222 8 GreatFrance Britain 6i50 i 7 38 1 .. so g .. 74 13 ingGermanyunit all and the expectsanalyses to downcompleteAt presentto date the work MissTotalby June. ofApplebaum revising Of course and has bring-the thirteen computers in her 556 223 87 .. 5 92 24 .. 755 250 7 monthly series take much more time than the others. A trifle over 40 per cent of them had been revised by the end of the planyear andto begin the proportion the preparationWhen is now the nearly of statistical a record one-half. unitbook is thatwithin will sight of its goal, we aseries. typescript,Burnspresent By and ouradopting weone business-cycle hope of thea tocompact photographicput the measurements arrangementlarge massmethods of devisedfigures inof fullreproducing inforby con- Dr.each venient form for use by ourselves and others. The volume will contain no text beyond a careful description of each series showing its source, what it covers, how it is compiled probablyWhether be this Business volume Cycles: can be Statistics published of in Cyclical 1935 will Behavior. probably ourbusinessand measurements. any specialcycles byprecautions Inmany view practicing of that the should active statisticians be interest observed in takenpublic in using in and be controlled by the time required to complete the descrip- subjectprivate offered employment, in universities, as well collegesas the numerous and schools courses of com- on the think.measurements,tions of the series—a your taskDirectorWhile far themore of statistical Research exacting staff thanand has Dr.one been Burnsmight preparing these basic merce,will be, we shouldthink the repay demand the costs for this of publication. volume, technical The title as willit have been working on the volume that will present and in. wetheterpret mimeographed aim, the scope general and a trial theresults technicalversion of the of methods investigation.the chapters of the that investigation Last explain spring calresultsin work order wasgiven that completed. weby mightour technique profitDr. Burns by that criticisms made show various its before merits tests the and of statisti- the limi- tations in a clearer light, and also studied certain cognate ofconstruction. thisproblems—particularly,the measurements.work in Several time to improvementsThe be incorporatednext the longtasks cycles inare methodin to ourfoundrevise current resuhed inthe residential mimeo- revision from characteristicMeasuringgrapheduponpare athe editionBulletin Cyclicalsubstantive of differentof upon the Movements'. methodologicalchapters 'The economic National showing Then processes. Bureauchapters, we the shall cyclical All Technique andset except to behaviorto work pre- the for last of these chapters have been written at least once; but whatthe present1927 we have or texts thereabouts. learned are based in the Theupon last inclusiontwo measurements or three of yearslater that cyclesabout stop our inand of own technique as well as many other matters will require a r complete recasting of the earlier manuscripts. We can scarcely expect to have the new version ready for submitting I to the Board before 1936. [22 I 23] A PARTIAL summary of the various activities discussed in the preceding pages is provided by the following list of the Na- tional Bureau's publications in '934 and of its tentative plans for publications in 1935. Books: StrategicProduction Factors Trends in in BusinessClark,Arthur the United 238 F. Cycles, Burns, pp. States 363by since Johnpp. 1870,Maurice by MechanizationIndustrialGerman BusinessProfits in Industry,in Cycles, thestein,288 United 1924—33, bypp. 678 Harry States, pp. Jerome, by Ralph 484 C.pp. Ep- by Carl T. Schmidt, We have also sent toNational our subscribers Income, 1929—3 boundKuznets), copies Senate of Document 124, 72d Congress, 2d Ses- 2 (written mainly by Simon sion; Government Printing Office, Washington, D. C., the contributing membership,PlacingChanges has our proved in BulletinPrices, a success, Manufacturingon a Productivity,subscription 630 sub- Costs basis,1929-1934, and separate Industrial by from Frederick C. Mills Bulletins: National Income, 1929—1932,261pp. by Simon Kuznets scribers having been obtained during this, the first year of Recent ChangesCorporate in Profits Production,Fabricant in the byUnited Charles States, A. Blissby Solomon the experiment. Gross Capital Formation, 1919-1933, by Simon Kuznets

cerningBooks: our publicationsThe in 1935 one definiteis that the announcement Directors have that can be made con- PUBLICATIONS IN PROSPECT approved Professor Paton's Corporate Profits as Shown by Audit Reports. That book is now in press. For the rest, we present a list of manuscripts which the staff expects to submit to the Directors for their judgment. Dr. Frederick R. Macaulay's Bond Yields, Interest Rates and Security Prices is scheduled for submission by the date of the annual meet- Stabilitying. Dr. will Arthur be ready D. Gayer's for circulating Public Works in February. and Economic Other manuscripts which we expect to submit, but which we cannot schedule definitely as yet, include Dr. Leo Wolman's Movements in Trade Union Membership since 1923, Dr. • studystudySimon tentativelyunder is Kuznets' beingPreWar entitled conducted Incomes and The Post-War Internationalatin BrownIndependent Conditions. University Gold Professions, StandardThe by last-namedProfessor and a William Adams Brown, Jr., Dr. Card J. Smit and Dr. A. G. III. Publications ourSilverman.use close made contacts Inof viewour withtechnical of the investigation,importance methods by of Dr.the the Silverman,Executive subject, of Com- and the of PUBLICATIONS IN i 4 mittee has approved the acceptance of the report for publica- 3 tion in the National Bureau's series, provided it is satisfactory to 1935the Directors. are Dr. Mills' TheOther Price candidates Structure forin Recessionpublication and that may be ready in [24 L Recovery, Dr. Kuznets' book on national income, Dr. Silver- 25] tief'sman's analysis study of theBritish shifts foreign in the trade, demand and for Dr. and Wassily supply Leon- of commodities during business cycles. Even if all of these investigations should be completed within this year, which is not probable, we would still have a goodly harvest in ket,changescapitalprospect Dr. Wickens' in formation, forproduction, 1936, investigation Dr. Dr. Wolman's Kuznets' of real-estate treatise improved on financing, theestimates labor Mr. mar- of including Dr. Mills' systematic study of Fabricant's work on the consumption of capital, and two Bulletins:volumes on business cycles.Dr. Mills, the editor of the Bulletin, has announced the issues:following topics, fromBusinessWage which and five Profits, Hours will bebyunder selectedSolomonLeo the Wolman Codes for Fabricant our of 1935 Fair Competition, by RecentTheChanges National Changes in theBureau inVolume Employment, TechniqueMovements,ing and Depression Character forby byMeasuringMeredith andWesley of ProductionRecovery, B. C. Cyclical GivensMitchell bydur- Charles and Arthur A. Bliss F. Burns Aspects of Recent Price Changes, by Frederick C. Mills for preparing the manuscriptsOurChanges editor, of all in Missourthe Sizebooks Martha and comeand Anderson, Distribution bulletins During isa Quarterresponsible of the National of a not Century, only In- by Simon Kuznets cost. Miss Anderson has charge also of what publicity we do. for the press, but also for circulating manuscripts among the To increase the circulation of our books and bulletins, she attendedtions in the Chicago annual atmeetings the end of of the December, social science taking associa- with her mentsproduction.Directors, with printers, recording The improvements proof their reading, votes, inmaking and typography, the business other stagespaper, arrange- ofand k an exhibit of recent publications. The results justified this binding effected in the last two years have been due to her, I and have been accompanied by reductions in manufacturing experiment so thoroughly that we may repeat it this year.

[26 27] tiveconferencesently Committee. take form as Meanwhile, definiteaids in enoughour weeffort forshall tosubmission holdmake other wise to planning thechoices Execu- of IV. Planning future undertakings. shouldvestigationsTHE National also initiate to Bureauthe freshfinal should stageinvestigations. notof publication only The task every of selecting carry some of its in- year; it sibilities.hithertoand formulating Genuine not known. researchnew No problems one is an can effort is forecastone to of find our with out gravest certaintysomething the respon- measure of success which such an enterprise will attain. The nitelypossible numerous. lines of Our exploration Directors intomake the suggestions unknown that arise are indefi- out of their diverse experiences; every staff member in trying to solve one problem raises new problems; correspondents Committee,sibilitiesTheinoften decisionsways write will that thewhichaffectus we aboutDirector can weour foresee virginmake Feelingfuture of inResearchbutlands developmentany this dimly. yearthat responsibility andweamong should theassuredly, alluring staff cultivate.a haveheavy but one, the Executive pos- wished to secure competent advice from wider circles. For calledinformalthat apurpose similar discussion conferencewe yieldedheld a Planning lastso much year. of AConference clarificationbrief account in that igj.of this The we meeting on the 3oth of May is given in our June Bulletin. economics;Professor Mr. James Henry W. S.Angell Dennison discussed dealt withresearch research in monetary problems suggested by business and national planning; Dr. David Friday outlined the program of studies which the Social Science Research Council Committee on Credit and Bank- wedirecting hope hopesinfluence that to certain have upon made.other the projects[28 NationalThis conference suggested Bureau's has by program, alreadyit will pres- hadand a 291 PUBLICATIONS OF THE ALL members of the Board will share in the deep regret with V. Personnel which the National Bureau records the death of Mr. Hugh sentedtorate.Frayne the Atlast American this summer. first annualFederation For twelve meeting ofyears Labor held Mr. sinceuponFrayne hisour had loss,direc. repre- we feel him conspicuous by his absence. Scarcely any other andDirector none has has shown been a a more fuller regular measure attendant of consideration at our sessions, for others. On our behalf, the Executive Committee took the first opportunity to express to Mr. Frayne's family and to the American Federation of Labor the sympathy of the National additionBureau. of Dr. Fritz Strauss,Our technical who is staffassisting has been Dr. strengthenedEugen this year by the toAltschul the staff. in hisDr. studyOswald ofWe W.agriculture are Knauth anticipating wasand businessone with of thelively cycles. quartet pleasure of another accession takinginvestigators an important who partbegan in preparingthe National our Bureau's first two staff volumes work, on national income. Though circumstances compelled him to leave the staff, he returned as a Director, presently to be- RESEARCH . NATIONALINCOME BUREAUBy WESLEY OF ECONOMIC C. MITCHELL,AND OswALD W. KNAUTLI IN THE UNITED STATES WILLFORD I. RING, FREDEPJCK R. MACAULAY . BUSINESSDISTRIBUTION CYCLESByVolume ANDVolumeOSWALD UNEMPLOYMENT W. KNAUTII (iga) III (igal)(1922) Details OF INCOME BYSummary STATES IN 1919 (1922) o pp.. $t.30 440152 pp. come President. That among the many flattering induce- '4. . DEPRESSION,EMPLOYMENT. UNITEDBy STATES,theWILLFOP.D NATIONAL 1920-22 I. KING BUREAU STAFF and i6 COLLABORATORS HOURS AND EARNiNGS IN PROSPERITY AND (igs) [880-1923 (*954) 405 pp.. $4.10 147 pP. . 7.6. THEiNCOME GROWTH IN OF AMERICANTRIBUTION, TRADE UNIONS, 5959 1920By MAURICELEOAND WOLMAN 1921 LEvEN THE VARIOUS STATES: ITS SOURCES AND (*925) to 306pp. ps). $s.o $3.50 DIS 8. BUSiNESS ANNALS (1926)asBy Revealed WILLARD by L. Business THORP, Annals, with an introductory by WESLEY C. MITCHELL chapter, BusinesS Cycles 8o pp.. $2.50 ments held out to him since his retirement from business he to. 9. BUSINESSMIGRATION CYCLES: AND ByBUSiNESS HARRYWESLEYTHE PROBLEM JEROME C.CYCLES MITCHELL AND (1926) ITS SETTiNG 256489 pp.. pp.. $2.50 $.oo (*927) theshould scientific choose interest to return and to the the social National value Bureau of our is work which a tribute to 'ii. THE BEHAVIOR OF PRICES (*927) TRENDS By FREDERICKWILLFORD I.C. KING MILI..s IN PHILANTHROPY (1928) t3 pp. $1.00 598 pp. 14. INTERNATIONALRECENT By Volumethe NATIONAL I, Statistica BUREAU (1929). STAFF compiled and iby C0LLSB0EATORS IreRE FERENCZI ECONOMIC CHANGES (1929) MIGRATIONS 2 vol., 950 pp., per SCt, $7.50 we rate highly. iS. nationalVOIUBSB Labour II, Office, Interpretations and edited (sgt),by WALTER edited by F. WALTER WILLCOX F. 5,512 pp.. $7.007*5 pp.. 35.00ol the Inter WILLCOX [30 WESLEY C. MITCHELL •i. Out of print. THE NATIONAL(2930) INCOMEBy WiLl-FoRD AND ITS I. Ku'tc PURCHASING POWER 394 pp. I it i6. CORPORATION CONTRIBUTIONS TO ORGANIZED COMMUN- 19.17. THE SMOOTHING OF TIME SERIESITY PLANNING(igi) WELFARE ANDSERVICES ByCONTROL PIERCELEo (1930) WOLMAN OF PUBLIC WORKS (igo) WILLIAMS and FREDERICK E. CROXroN 260347 pp.,pp., $2.00 $s.o ;-:' L'' C41t._' '4.. 21.20. ECONOMIC TENDENCIES IN THE UNITEDODICTHE STATES: PAYMENT ASPECTS (1932)By FREDERICKPIERCE WILLIAMS R. MACAIJLAY PURCHASE OF MEDICAL CARE THROUGH FIXED PERI- 308172 pp., pp., $.oo $2.00 22. SEASONAL VARIATIONS IN INDUSTRYOF AND PRE-WAR TRADE AND (i93)By POST-WAR FREDERICKSIMoN KVZNETS CHANGES (1932) C. MILLs 639455 pp.. pp., $5.00 $4.00 24.23. PRODUCTION TRENDS IN THE UNITEDSTRATEGIC STATES(1934) SINCEFACTORS 1870By ARTHUR IN BUSINESS F. BURNS CYCLES (,g4) 363 pp., $3.5o 26.25. GERMAN BUSINESS CYCLES, 1924—1933INDUSTRIAL PROFITSBy JOHNCARL IN MAURICE T.THE SCHMIDT UNITED C1.ARK STATES (,9) (1934) ' 288238 pp., $2.50 pp., $1.50 28.27. CORPORATE PROFITS AS SHOWN BY MECHANIZATIONAUDIT REPORTSBy ByHARRYINW. RALPHA.INDUSTRY PATON C. EPSTEIN (i9) JEROME 48468 pp., pp., $5.00 (in press) Subscriptions to the National Bureau Bulletin THE BULLETIN (5 issues, $i) may begin 14 ,. 48. with any of the following numbers:ASPECTS OF RECENT PRICE MOVEMENTS, F. C. MILLs (Oct. 44 ._ •-' 1ç314 51.50.49. RECENT NATIONAL CORPORATE CHANGES INCOME, IN PROFITS, PRODUCTION. SoLoMoN C. FABRICANTA. BLiss Uune 28, 1954)51, '934)7,1933) 1934) 1929—32, SIMON KUZNETS (rev. (Apriled., June iB, (.. '-'4.4 ': P1' .41 52. GROSS CAPITAL FORMATION. 1919-33, SIMON KUZNETS (Nov. 15, - .. , , ,,. —. ' 54.53. CHANGESWAGES AND IN PRICES,HOURS UNDERMANUFACTURING THE CODES1954) COSTS OF FAIR AND COMPETI- INDUS.TION,TRIAL LEO PRODUCTIVITY, WOLMAN (Feb. 1929-1934,s8. 1935) F. C. MIU5 (Dec. 21, 1934)