The Course of Profits During the War

T HE counterpart of the cost of living indexes used in so many cases during the war to settle conflicts over wages is an index of profits; for the motive behind wage demands was only in part a matter of rising price levels and rising consumer costs; it was equally a belief on the part of the wage earner that the relative share of capital or management in the national product was increasing, that business men and business firms were receiving vast profits from their war production. In this day of appeal to facts the only way of meeting such a belief and satisfying the demand that goes with it lies in the application of scientific methods to the measurement of the phenomenon in question. When it comes, however, to the matter of constructing an index of profits the task is far from simple; it is by no means as satisfactory as the determination of an index number of prices, for it involves an immediate appeal to industrial accounting systems and the prerequisite to thoroughly satisfactory results is uniform accounting methods. The uniformity of our railroad accounting systems, established after a generation of legislative and administrative struggle, offers a marked contrast to accounting in other fields of privately owned and operated industry. It is possibly a safe forecast of the near future to assume that the interest of the public in profits will increase rather than decrease. The deep interest which the public has shown and is showing in such fundamental industries as coal production may well lead to a greater measure of public control and to a demand for more uniform methods of accounting. The changes in accounting methods by industrial concerns since the passage of the income tax law has been little short of

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