Economics and The Public Welfare
59: The Undistributed Profits Tax of 1936
Chapter 59
The Undistributed Profits Tax of 1936
But the New Deal was not content with striking at the accumulation of capital by well-to-do men, or with forcing the dissipation of the capital already accumulated in great fortunes through estate taxes that could not possibly be paid out of income and that must be paid by the liquidation of capital assets. In 1936 it struck a heavy blow at the accumulation of capital out of corporate profits by proposing a confiscatory tax on profits retained for use in the business.
The proposal was designed, for one thing, to force the distribution of corporate profits by dividends, so that a greatly increased volume of dividends might become subject to income taxes. The corporation itself was to be relieved from corporate income taxes and from the corporate tax on capital stock. The proposal involved, also, taxing dividends received by stockholders at the “normal” rate from which they were then exempt.
Corporate Savings, Not Income, Taxed—Terrific Rates Proposed. Corporations would be taxed, not on their incomes, but on their savings. If a corporation paid out all its profits in dividends, it paid no tax at all. To the extent that it saved, however, it would have to pay a terrific tax, as shown by the tables on page 379.
The tax rates indicated in the bill were those of the second column in our table, but the significant rate is that shown in the third column, namely, the tax as a percentage of corporate savings, which is derived from the comparison of the first and second columns. For corporations with incomes of less than $10,000 a year, the tax on savings ran from 10% to 42.14%, while for corporations with incomes of more than $10,000 a year, the tax ran from 40% to 73.91%.
The Business Community Fights—Their Arguments. The business community made a magnificent fight against this bill and the Congressional committees listened to them, both in the hearings before the House Committee on Ways and Means and the Senate Finance Committee.
Retaining Profits Major Cause of Country’s Growth. Case after case was presented showing the history of small businesses which, employing three or four laborers, had in relatively short periods of time (fifteen or twenty years) grown into very substantial businesses employing several hundreds of laborers, by withholding dividends from stockholders, putting profits back into the business, and expanding. The classical case, of course, was that of the Ford automobile company, which grew to be the biggest business in the country by precisely this process.
| The Proposed Tax on Corporate Savings from Adjusted Net Incomes of $10,000 of Less * | ||
|---|---|---|
| Percentage of adjusted net income undistributed (%) | The tax as a percentage of adjusted net income (%) | The tax as a percentage of corporate savings (%) |
| 1 | .10 | 10.00 |
| 5 | .50 | 10.00 |
| 10 | 1.00 | 10.00 |
| 15 | 2.25 | 15.00 |
| 20 | 3.50 | 17.50 |
| 30 | 7.50 | 25.00 |
| 40 | 13.00 | 32.50 |
| 50 | 18.50 | 37.00 |
| 60 | 24.00 | 40.00 |
| 70 | 29.50 | 42.14 |
| The Proposed Tax on Corporate Savings from Adjusted Net Incomes of More Than $10,000 * | ||
|---|---|---|
| Percentage of adjusted net income undistributed (%) | The tax as a percentage of adjusted net income (%) | The tax as a percentage of corporate savings (%) |
| 1 | .4 | 40.00 |
| 5 | 2.0 | 40.00 |
| 10 | 4.0 | 40.00 |
| 15 | 6.5 | 43.33 |
| 20 | 9.0 | 45.00 |
| 30 | 15.0 | 50.00 |
| 40 | 25.0 | 62.50 |
| 50 | 35.0 | 70.00 |
| 57.5 | 42.5 | 73.91 |
* See Chase Economic Bulletin, May 12, 1936, p. 16.
The argument was pressed that this was one of the greatest contributions to the country’s growth. The argument was pressed that there was need for development of new industries giving increased employment to offset the dwindling of old industries.
Tax Would Create Monopolies. The second major point, a corollary, was that the penalty tax on undistributed profits would operate to create and entrench monopolies through preventing the rise of vigorous competitors.
It was pointed out that there were great corporations with vast surpluses already created which would escape Federal taxation entirely or almost entirely, because they were then paying out practically all of their current incomes as dividends, whereas small and growing businesses with inadequate surpluses would be heavily taxed.
Savings in Good Times Offset Losses in Bad Times. Stress was laid on the immense variation in the need for large surpluses in business, depending on the regularity or irregularity of their annual profits. Those with less stable incomes must save for the rainy day or be ruined when the years of losses came.
The immense variation in incomes of virtually all businesses with the cycle of prosperity, crisis, and depression was stressed, and the need to save in the periods of prosperity in order to be safe in periods of depression was emphasized.
Capital losses in the preceding period of depression had weakened many corporations, and the need to rebuild their capital was urged.
Many Businesses Under Contract to Retain Profits. It was pointed out that many businesses were under contract to refrain from paying out dividends in whole or in part, under sinking fund provisions or under other contracts with creditors, or were required to build up reserves by State laws. Some concession had been made to this in the House bill, which recognized contracts made in writing prior to March 3 of 1936 as justifying the retention of profits without the payment of the progressive rate, though even the profits retained were to be subject to the very high rate of 22 1/2%.
Bank “Lines of Credit” and Dividends. This concession took no account, however, of the very common case where bank lines of credit were subject to the understanding that dividends be withheld in whole or in part. Bank lines of credit were not usually written contracts but verbal understandings.
Bank credit men were aghast. There is a constant issue between bank credit men and many borrowing corporations over dividend policy. In many cases bank loans can be made safe if dividends are withheld which would be entirely unsafe if all profits were paid out. The new tax would have presented an almost insuperable obstacle to the conservative corporation director and the bank credit official in the case of the underfinanced corporation. They would be met by the argument that no tax at all is paid if all profits are paid out in dividends, while the Government would take from 40% to over 73% of every dollar saved; and the further argument would be made that competitors were reducing costs by paying out dividends and thus escaping taxes.
The Law Hits Heavy Industries. The argument was made, too, that reduced savings by corporations meant reduction in demand directed toward the heavy industries. Business corporations constitute the main market for capital equipment. The securities market was supplying them with very little capital for such purposes. If they could not save their profits, they could not buy any new capital equipment.
Business Receiving Little Capital from Securities Market. The following table will show how low the volume of new capital issues had fallen in the United States, both as compared with earlier times and as compared with foreign countries. The securities legislation of 1933 and 1934, and the interpretations given this legislation by the Securities and Exchange Commission, had largely paralyzed new issues in the United States.
| Indices of New Domestic Corporate Capital Issues in Different Countries * | |||||||
|---|---|---|---|---|---|---|---|
| United States (1923 = 100) | United Kingdom (1923 = 100) | Germany (1924 = 100) | Japan (1923 = 100) | Switzerland (1923 = 100) | Italy (1923 = 100) | Netherlands (1923 = 100) | |
| 1923 | 100 | 100 | ...... | 100 | 100 | 100 | 100 |
| 1924 | 114.9 | 132.1 | 100 | 67.7 | 245.1 | 152.2 | 352.7 |
| 1925 | 136.7 | 195.5 | 286.6 | 88.2 | 228.5 | 225.9 | 296.6 |
| 1926 | 142.5 | 208.4 | 606.7 | 111.9 | 159.2 | 142.6 | 295.0 |
| 1927 | 176.7 | 260.5 | 635.5 | 102.8 | 169.1 | 79.4 | 229.6 |
| 1928 | 202.8 | 324.2 | 638.3 | 98.3 | 204.7 | 135.5 | 707.7 |
| 1929 | 303.6 | 235.9 | 382.2 | 70.3 | 523.2 | 182.8 | 505.5 |
| 1930 | 170.1 | 188.4 | 526.2 | 30.8 | 458.8 | 154.8 | 321.7 |
| 1931 | 58.9 | 63.0 | 340.I | 37.6 | 560.8 | 108.8 | 67.7 |
| 1932 | 12.3 | 124.0 | 82.5 | 29.7 | 212.9 | 91.6 | 47.6 |
| 1933 | 6.1 | 140.7 | 92.0 | 76.6 | 275.2 | 84.0 | 18.9 |
| 1934 | 6.8 | 157.9 | 121.4 | 90.0 | 182.7 | 89.1 | 79.2 |
| 1935 | 15.3 | 239.6 | 96.1 | ||||
| 1936 (1st q.) | 15.8 | ||||||
The argument was urged, too, that a tax on corporate savings of this magnitude would force a great many small corporations to disincorporate and to revert to partnership or individual ownership.
Basis of Law the Fallacy of “Oversavings.” Behind this proposal was the general fallacy of “oversavings.” There was the belief that the troubles of 1929 had grown out of corporate savings in the preceding years. The Treasury at first denied that it entertained this theory. An official spokesman for the Treasury said before the House Committee on Ways and Means, “This is not a reform bill. This is a tax bill.” But the same Treasury spokesman also said, “The greatest depression in the history of the country followed the accumulation of the greatest corporate surpluses in the history of the country.” 1 Finally, before the Senate Committee the Treasury admitted, through an official spokesman, that it inclined toward the theory in question: “We also have some ground for suspecting that the accumulation of these very corporate surpluses assisted materially in causing the depression.” 2
If this statement is taken to mean that the greatest accumulation of corporate surpluses in the history of the country preceded the 1929-1933 depression, it simply is not true. The table following (p. 383) shows that it is not true. The greatest accumulation of corporate surpluses came with the boom which preceded the crisis and depression of 1920-1921. We have seen, moreover, that the 1920-1921 crisis and depression were made very much less disastrous by virtue of the great accumulation of corporate surpluses that had preceded them. We had a quick comeback from that depression.
Additions to corporate surpluses from 1916 to 1919, inclusive, amounted to $14,865,000,000, whereas the comparable four years preceding the crisis of 1929, namely, 1925 to 1928, inclusive, show increases in corporate surpluses of only $8,807,000,000.
There is no doubt that the theory that corporate savings preceding 1929 caused the crisis, was responsible for this legislative proposal. The President himself, in his speech of acceptance before the Chicago Convention in 1932, had given voice to this theory.3 It was one phase of the old indictment of the capitalist system which—originating with Sismondi and Rodbertus 4—had passed on with successive modifications through Karl Marx to John A. Hobson, and from him to J. M. Keynes—the belief that excessive savings are responsible for crises and depressions.
| Net Dividend Payments and Retained Net Income * of All Active Corporations in the United States (In millions of dollars) | |||||
|---|---|---|---|---|---|
| Net income after taxes (a) | Net dividend payments (a) | Retained net income | |||
| Amount | % of net income | Amount | % of net income | ||
| 1909 | $2,599 | $1,567 | 60.3 | $1,032 | 39.7 |
| 1910 | 2,906 | 1,828 | 62.9 | 1,078 | 37.1 |
| 1911 | 2,531 | 1,866 | 73.7 | 665 | 26.3 |
| 1912 | 3,425 | 1,950 | 56.9 | 1,475 | 43.1 |
| 1913 | 3,347 | 2,167 | 64.7 | 1,180 | 35.3 |
| 1914 | 2,371 | 2,028 | 85.5 | 343 | 14.5 |
| 1915 | 4,083 | 2,055 | 50.3 | 2,028 | 49.7 |
| 1916 | 7,408 | 2,500 | 33.7 | 4,908 | 66.3 |
| 1917 | 7,342 | 3,025 | 41.2 | 4,317 | 58.8 |
| 1918 | 4,553 | 2,620 | 57.5 | 1,933 | 42.5 |
| 1919 | 6,307 | 2,600 | 41.2 | 3,707 | 58.8 |
| 1920 | 4,343 | 2,900 | 66.8 | 1,443 | 33.2 |
| 1921 | 24 | 2,630 | (b) | (d) -2,606 | (c) |
| 1922 | 4,380 | 2,634 | 60.1 | 1,746 | 39.9 |
| 1923 | 5,827 | 3,299 | 56.6 | 2,528 | 43.4 |
| 1924 | 4,998 | 3,424 | 68.5 | 1,574 | 31.5 |
| 1925 | 6,971 | 4,014 | 57.6 | 2,957 | 42.4 |
| 1926 | 6,774 | 4,439 | 65.5 | 2,335 | 34.5 |
| 1927 | 5,880 | 4,765 | 81.0 | 1,115 | 19.0 |
| 1928 | 7,566 | 5,166 | 68.3 | 2,400 | 31.7 |
| 1929 | 8,084 | 5,927 | 73.3 | 2,157 | 26.7 |
| 1930 | 1,366 | 5,613 | (b) | (d) -4,247 | (c) |
| 1931 | (d) -3,145 | 4,182 | (c) | (d) -7,327 | (c) |
| 1932 | (d) -5,375 | 2,626 | (c) | (d) -8,001 | (c) |
| 1933 | (d) -2,379 | 2,101 | (c) | (d) -4,480 | (c) |
| 1934 | 157 | 2,642 | (b) | (d) -2,485 | (c) |
| 1935 | 1,674 | 2,927 | (b) | (d) -1,253 | (c) |
| 1936 | 3,903 | 4,702 | (b) | (d) -799 | (c) |
| 1937 | 3,872 | 4,832 | (b) | (d) -960 | (c) |
| 1938 | 1,480 | 3,222 | (b) | (d) -1,742 | (c) |
| 1939 | 4,040 | 3,841 | 95.1 | 199 | 4.9 |
| 1940 | 4,778 | 4,067 | 85.1 | 711 | 14.9 |
| 1941-p | 7,209 | 4,464 | 61.9 | 2,745 | 38.1 |
Sources: 1909-1937 from Temporary National Economic Committee, Monograph No. 12, entitled “Profits, Productive Activities and New Investment,” Table VI, based largely upon Treasury Department “Statistics of Income”; 1938-1941 from “Statistics of Income.”
(a) Excluding intercorporate dividends; (b) over 100%; (c) no percentage computed because of net deficit; (d) deficit; (p) preliminary.
* This table is taken from the excellent monthly letter of the National City Bank of New York, Sept., 1943, p. 104.
Applied When Corporate Savings Were Negative. It must be said that if this theory had any validity at all, the New Deal chose a very bad time in which to apply it. The table above shows that beginning with 1930 there had been an uninterrupted series of years where corporate surpluses were depleted instead of being added to, years of gigantic corporate deficits instead of additions to corporate surpluses. Certainly additions to corporate surpluses were not retarding prosperity in 1936, nor could they have been doing so since 1929.
Prevailing economic doctrine has been and is that the accumulation of capital is of first importance for economic progress and for the interests of labor. When capital and natural resources are abundant and men are scarce, the worker is important and his wages are high. When, on the other hand, as in China, population is very dense, natural resources relatively scarce, and capital very scarce and timid, it is cheaper to hire men for draft purposes than to feed an animal for draft purposes. Retarding the rate of capital accumulation or, worse still, diminishing the total of the capital of the country, are policies definitely hostile to the interests of the masses of men.
Confusion of Bank Expansion and Savings, 1922-1929. This has long been accepted economic doctrine, according with history and experience. In the course of the great depression that followed 1929, however, there came to be a considerable body of opinion which held that the great crisis was caused by an excessive accumulation of capital between 1922 and 1929.
The fact is that what took place in the years 1922-1929 was an excessive expansion of bank credit, based on inflowing gold and the cheap money policy of the Federal Reserve banks. This bank credit, unneeded for normal banking uses, flowed into capital uses and speculative uses, creating appalling distortions in the general financial picture. In earlier chapters this has been discussed at length.
Part of this doctrine of oversavings related to the savings of corporations. It was complained that they had withheld dividends from their stockholders, piling up corporate surpluses. At this point, however, the complaint broke down into two contradictory lines. One complaint was that they used these withheld profits to build unneeded plant and equipment, which unduly increased the productive power of the country, leading to further unneeded production of goods, which finally broke the markets and brought on the crisis.
The second complaint regarding them, however, was that they did not use these surpluses to build additional plant and equipment, but held them in the form of cash which they lent to the stock market at 10% in the form of brokers’ loans “for account of others” in 1928 and 1929, and that their failure to employ these funds in additional plant and equipment led to a falling off in demand for goods from the heavy industries, which brought reaction and depression.
Now, the facts are far from receiving correct interpretation in either of these views. The facts are that corporate savings of ordinary business profits declined in the latter part of the period under discussion. In 1929, for example, according to the Brookings Institution figures, only a billion dollars was added to corporate surpluses out of ordinary business profits. Altogether $2,238,000,000 were added to business surpluses, but more than half of this grew out of realized capital gains,5 due to the corporations selling previously acquired securities at the fantastic prices of 1929. And the further fact is that the greater part of the abnormal cash reserves which corporations had, came, not from savings, even of capital gains, but rather from the new stock issues which corporations were able to put out in the wild stock market at very high prices. They thus accumulated funds far in excess of their needs, which they held as cash, because they did not know what else to do with them, and which they lent at 10% to the stock market when the stock market was willing to pay 10%.
And the further fact is that the capital gains and the wild stock market and the excess cash in the hands of corporations were all the product of the vast and unneeded expansion of bank credit which took place between June 30 of 1922 and early April of 1928. This same expansion of bank credit put liquid reserves not only into the hands of business corporations, but also into the hands of many others, who took part in lending to the stock market at 10% in the form of brokers’ loans for the account of others.
To attribute this complicated financial mess to the old, sound, traditional policy of American business corporations of putting aside a part of their profits for expansion or to build up working capital or to provide against the rainy day, is a grotesque misunderstanding of the pathology that took place.
The Fallacy of Excess Capacity. With respect to the other version of the complaint, that the piling up of corporate surpluses between 1922 and 1929 led to excessive plant and equipment, the evidence is that there did not take place,6 during this period, the creation of a greater percentage of unused capacity than we had previously had. Always there is unused capacity. Our economic organism is loosely articulated. There are great variations from time to time in the demands made upon the different branches of industry. If we did not have excess capacity all along the line, we should not have enough at particular times, and the failure to have enough at strategic points can easily mean the slowing down of the whole industrial machine—witness the shortage of railway facilities in 1919-1920.
The Heart of the Doctrine of Oversavings. Two writers have independently given us the same “dilemma” of savings. Harold G. Moulton in his Formation of Capital,7 offers the “dilemma” that savings by the individual, withholding funds from the purchase of consumers’ good in order to divert them to producers’ goods, means such a falling off in the demand for consumers’ goods as to lead to business reaction, which in turn reduces the demand for producers’ goods, and so makes the savings pointless. J. M. Keynes, in his General Theory of Employment, Interest and Money, presents the same argument.8
This looks like a dilemma when one examines it only from the front. But when one looks at it from the side, it is quite clear that it is not a dilemma, but merely a chimaera in dilemma’s clothing. The difficulty arises from the fact that both these writers are assuming an uncaused increase in savings. Savings may be increased from many causes. If there comes a great fear regarding the economic future—as in 1914 at the outbreak of the first World War—men may curtail their expenditures and may not invest the savings. But this is not the typical cause of an increase in savings, and indeed could not be the cause of a general increase in savings, because too many men would be under pressure to use capital assets in maintaining consumption in such a situation. A more typical cause would be the following. Let us suppose, for example, that there is a new invention which promises great profits, but which cannot be exploited without new capital, and let us suppose that the inventor, to get new capital, offers a high enough rate of interest to induce other individuals to curtail their current consumption and turn over to him the funds that he needs. Assume that, assured of these funds, he immediately gives orders for the new capital equipment he needs, creating an additional demand for producers’ goods, which leads the producers of the equipment to hire more labor and to buy more materials. Is there anything in this likely to lead to business reaction?
It will be observed here that it is not necessary to introduce bank credit into this illustration. The hypothesis can be altered so as to eliminate all credit. We could assume that the savings of the inventor and his friends take the form of proprietors’ capital in the new enterprise, and that they pay cash for the new machinery day by day as it is being produced out of funds which they save day by day by reducing their current consumption.
The general point can be further illustrated by assuming the discovery of new oil fields, with everybody in the region saving all that he possibly can to buy drilling equipment, or to buy stocks of oil companies, with all available labor in the community diverted from the production of current goods and services to developing the oil fields, and with men bidding high rates of interest to get any loans that are available. Does such a situation lead to business reaction and stagnation?
The Undistributed Profits Tax Bill as Passed. The President’s power over the Congress in 1936 was great, but the opposition to his appalling proposal, led by Senator Harry Byrd of Virginia, fought hard. They could not defeat the bill but they could hold it down.
Instead of a top rate of 73.91% for the tax on undistributed profits 9 proposed in the original bill, they held the top rate for this tax down to 27% on undistributed net income amounting to 60% or over of the adjusted net income. The rate was 12% on undistributed net income which ran between 10% and 20% of the adjusted net income, and was 7% for undistributed net income of 10% or less, as contrasted with the 40% tax for undistributed net income of 10% or less proposed in the original bill.10
Evil Effects Immediately Manifest. It was a triumph for sanity, but a very inadequate triumph. The effect of the undistributed profits tax was great and immediate. There was a great increase in corporate dividends in 1936 and 1937. Many of the evils forecast in the presentation of the objections to the bill before the Congressional committee promptly manifested themselves. There are many corporations which, even in 1946, have reason to regret that they were forced by this law to pay dividends as large as those which they paid in 1936 and 1937. The flood of dividends at the year end, both in 1936 and 1937, was particularly heavy, and this was true even after the crisis of 1937-1938 had begun and the outlook for business profits was very gloomy.
The table on page 383, for net dividend payments and for retained net income for all active corporations in the United States, shows that dividend payments, which had been $2,642,000,000 in 1934 and $2,927,000,000 in 1935, spurted to $4,702,000,000 in 1936 and to $4,832,000,000 in 1937, dropping again in 1938 to $3,222,000,000.
Moreover, fears that business corporations would reduce their purchase of new equipment out of profits were promptly realized. Case after case of this sort was observed in the latter part of 1936. The measure was eminently successful in diverting corporate profits from the purchase of producers’ goods to income for consumers. It was eminently successful in holding down the capital accumulation of the country.
Repeal of Undistributed Profits Tax Early 1938. But the evils were so manifest that the Congress finally broke away from the President in early 1938. Under the leadership of Senator Pat Harrison, Chairman of the Senate Finance Committee, the Congress repealed the undistributed profits tax, and simultaneously gave the taxpayer the option of taking capital gains on assets held more than eighteen months out of the category of the income tax and paying a special capital gains tax upon them of 15%. This made it possible for men with large incomes to engage in long-run ventures and retain 85% of the profits which such long-run ventures might bring, instead of having to pay rates of 40%, 50%, and even 83% upon them.
A full explanation of this vigorous assertion of Congressional independence must await our discussion of the crisis of 1937, but it was a very thorough assertion of independence. The President did not dare to veto the bill. Instead he held it for ten days and then let it become a law without his signature.
Roosevelt and Pat Harrison. The President announced his decision on this point in a pathetic speech to a group of school children, who did not know what it was all about, making sharp criticism of the action of the Congress. Following this speech of the President’s, Senator Pat Harrison made a reply before the Senate. The Senate was in full attendance and members of the House crowded all available space to hear the Senator. Senator Harrison met the President’s arguments with vigor and clarity. He expressed his regret that the President had not seen fit to veto the bill, because in that case he had no doubt as to what the action of the Congress would have been. He implied that he was quite sure that the Congress would have overridden the veto.
No member of the Senate, not even the President’s closest adherents, replied to Senator Harrison. Congressional approval of the speech was emphatic. The Congress had watched the theories of Sismondi and Rodbertus, Marx, John A. Hobson, and Keynes, as applied to American corporations, in action, and the Congress had repudiated these theories.11
- 1This point will be discussed at length in Chap. 34.
- 2I have not been able to find that this article was ever published. However, the reader will find much of it in two books by Veblen: Imperial Germany and the Industrial Revolution, New York, 1915; and The Nature of Peace and the Terms of Its Perpetuation, New York, 1917.
- 3See my book The Effects of the War on Money, Credit and Banking in France and the United States, published by the Carnegie Endowment for International Peace, Oxford University Press, New York, 1919. For London, see the interesting articles by Mr. J. M. Keynes in the British Economic Journal in late 1914.
- 4O. M. W. Sprague: “Crisis of 1914 in the United States,” American Economic Review, September, 1915; H. G. S. Noble: “The New York Stock Exchange in the Crisis of 1914,” Garden City, N. Y., Country Life Press, 1915. These two papers are classics of permanent value.
- 5The figures of all the State and National banks and trust companies appear only once a year in the Comptroller’s report as of approximately June 30. For dates other than June 30, it is necessary to make estimates. During the war period these estimates are made on the basis of variation in the National Bank figures.
- 6War Industries Board Price Bulletin No. 3, Government Control Over Prices, by Paul Willard Garrett, assisted by Isador Lubin and Stella Stewart, Washington, Government Printing Office, 1920, p. 550.
- 7Mr. Herbert Hoover, in particular, did a superb job in bringing the grain and milling interests into the service of the country. I shall later find occasion to criticize his policies as President, but I wish to pay high tribute to his work in feeding the Belgians before we entered the war, to his work in food control at home during the war, to his postwar work in feeding stricken countries, and to his work under President Truman along similar lines after World War II.
- 8See my “Value and Price Theory in Relation to Price-fixing and War Finance,” an address before the American Economic Association, printed in papers and proceedings, American Economic Review Supplement, March, 1918. Reprinted in the Economic Bulletin issued by the Capital Research Company of Los Angeles, Vol. II, No. 2, Dec. 6, 1940, and reprinted in the hearings of the Senate Committee on Banking and Currency on the Price Control Bill Dec. 16, 1941. See also my testimony of Dec. 16, 1941, before this Committee.
- 9“An Index Number of Production,” American Economic Association, Dec., 1920, published in Papers and Proceedings the following March.
- 10See Federal Reserve Charts on Bank Credit, Money Rates and Business, Feb., 1941, p. 32.
- 11See Federal Reserve Charts on Bank Credit, Money Rates and Business, Nov., 1941, p. 34.
