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Published online by Cambridge University Press: 07 November 2014
The past two decades have witnessed a remarkable development in the science of national accounting. This development has taken or is taking place in three interrelated systems of accounts: first, the national product accounts; second, input-output accounts; and, third, money flows or flow of funds accounts. The national product accounts are concerned with transactions reflecting the economy's over-all productive accomplishment, that is, principally with incomes and expenditures measuring the value of final product. The input-output accounts focus on transactions between productive establishments and thereby supplement the national product accounts by providing an intensive analysis of technological interrelationships within the economy. The money flows or flow of funds accounts trace transactions in financial claims as well as goods and services and thereby contribute—what is lacking in the other two systems—an intensive analysis of financial interrelationships within the economy. The national transactions accounts in process of preparation in Ottawa are a version of this third type of accounts.
This paper was presented at the annual meeting of the Canadian Political Science Association in Montreal, June 8, 1956. The views expressed are the responsibility of the author alone.
1 New York, 1952.
2 Washington, 1955.
3 The sectors and categories shown in the Table are provisional.
4 It is assumed that new investment goods are investment goods only for the final purchaser, that is, the sale of these goods is recorded in the A account.
5 Sector gross savings are net in the sense that they are the arithmetic result of gross savings for some and gross dissavings for other economic units in the sector. Similarly sector financial dissavings are net in the sense that they reflect the result of financial dissavings for some and financial savings for other economic units in the sector. The total demand for external financing by economic units comprising a sector thus will normally exceed the tabulated financial dissavings of the sector.
6 A more intricate problem of “shifting categories” arises in the accounting of the costs of transferring ownership of existing real capital assets and of financial claims. Real estate agents, stock brokers and bond dealers, for example, treat their commissions or markups as receipts for current services rendered while the users of their services tend to “capitalize” the cost of these services by showing sales of capital assets net and purchases of capital assets gross of such costs.
7 That is, to the extent that this is reflected in current payments or payments due and accrued. However, it should be emphasized that what is entered here is strictly speaking not the payments but the service for which the payments are made. The payments themselves are entered under the categories embracing respectively “Currency and deposits” and “payables” (Table II, items 15 and 16).
8 The Branch was at that time in the Department of Reconstruction and Supply.
9 See also Humphreys, D. J. R., “Personal Savings in Canada: Direct Estimates, 1939–1953” in American Statistical Association, Proceedings of the Business and Economic Statistics Section, Papers Presented at 114th Annual Meeting, Sept., 1954 (Washington, 1955).Google Scholar
10 See the excellent paper of Sigel, S. J., “A Comparison of the Structures of Three Social Accounting Systems” in National Bureau of Economic Research, Studies in Income and Wealth, XVIII (Princeton, 1955), 267.Google Scholar
11 Morris A. Copeland, “Comment” in ibid., 288.
12 This, of course, does not preclude breaking down the balancing entries of the N.T. accounts (which are themselves not transaction entries) to show significant components. For example, gross savings might be shown as consisting of net savings and charges for depreciation and similar reserves.
13 Write-downs may be taken to include any charges against the value of assets as shown in the balance sheet which do not arise out of sales: charges ranging from “hidden” bank reserves to charges for depreciation and depletion. If, however, current charges for reserves of this nature are not deducted from the value of assets as shown but, instead, appear on the liabilities side of the balance sheet, the charges are not treated as write-downs.
14 A peculiar type of float appears in the period t.4 to t.5. This period probably tends to be very short and in most cases perhaps cheques are not recorded as received until deposited, that is, t.4 and t.5 in effect coincide.
15 The gross float was actually higher. Canadian dollar net debit items in transit at the end of December, 1955, were $1,002 million.