other points may be found in tables 9 and 10, which give the appropriation accounts of companies and public corporations respectively.

The third section of table 3 shows the various receipts of, and payments by, public authorities which determine their disposable revenue. Public authorities receive money in direct taxes, indirect taxes, and income from property (rents, interest, etc.); they pay out transfers in the form of social security benefits, etc., subsidies and debt interest (death duties and other taxes falling on capital accounts are left out on the receipts side, as are transfers to capital accounts, such as war damage compensation, on the expenditure side). Their property income must be reduced by the amounts absorbed in appreciation of the stocks of government trading departments. The balance is available for current expenditure on goods and services, and what is not spent in this way contributes to the surplus of public authorities (which also includes the excess of the receipts from capital taxes over capital transfers). These and the other ways in which action by public authorities causes sums to be set aside from current expenditure are shown in table 29 on the financing of gross capital formation.

Most of the items in the public authorities' section of table 3 have been fairly stable in the last two years. From 1948 to 1949 there was a rise of about £280 millions in payments of direct tax, and a roughly corresponding rise in disposable revenue, but between 1949 and 1950 there were no large changes. The total of disposable revenue showed a small further increase.

In adding up the total of disposable incomes, the various transfers which are counted as income to those who receive them but as negative income to those who pay them cancel one another out. The only transfer items which do not cancel in this way are indirect taxes and subsidies, which are entered as revenue (positive and negative) of public authorities although they have not been reckoned in the opposite direction in the other sectors. For this reason the total of disposable incomes exceeds the total of incomes of factors of production (after deduction of stock appreciation) by the amount of indirect taxes less subsidies. Gross National Expenditure (Table 4)

Table 4 gives the gross national expenditure divided between personal consumption, public authorities' current expenditure on goods and services, gross domestic capital formation and the overseas surplus or deficit (net investment abroad less net grants from abroad). Personal consumption represents current expenditure out of the personal disposable income measured in table 3, and the balance represents gross personal saving together with any excess of tax provision over tax payments. Similarly, the public authorities' current expenditure on goods and services is made out of their disposable revenue as defined in table 3, and the residue represents the combined surplus or saving of public authorities less any net transfer from private capital accounts. These two residues, together with depreciation provision and the additions to reserves of companies and public corporations as shown in table 3, constitute the funds from which, directly or indirectly, the gross capital formation of the nation is financed. Gross domestic capital formation is divided into two parts, one consisting of the replacement of and additions to the stock of fixed capital assets (fixed capital formation) and the other of the physical increase in stocks and work in progress. The foreign balance is the excess of the United Kingdom net investment abroad over the net gifts received from abroad. Net investment abroad represents a form of disposal of savings alternative to domestic capital formation. Gifts from abroad enter as a negative item because the object of the table is to show the way in which the nation's disposable income is spent, and gifts from abroad make it possible for expenditure to exceed total disposable income.

The figures in table 4 show personal consumption rising by £363 millions between 1948 and 1949 and by £474 millions between 1949 and 1950. Current purchases of goods and services by public authorities, after rising by over £200 millions from 1948 to 1949, remained practically constant in 1950. Fixed capital formation increased by £162 millions from 1948 to 1949, but by only £80 millions from 1949 to 1950. The increase of physical stocks is estimated as £100 millions less in 1950 than in 1949. The foreign balance, on the other hand, which was a small deficit in 1948 and a small surplus in 1949, rose by almost £200 millions in 1950, the chief factor in the changes being net investment abroad. Thus the increase in gross national expenditure, which from 1948 to 1949 was shared mainly between personal consumption, public authorities' consumption and

lomestic capital formation, from 1949 to 1950 was shared between consumption nd the foreign balance, while the total of domestic capital formation fell lightly.

The tables following in later sections can all be regarded as a further developnent or detailed subdivision of some item or items contained in tables 1-4. Secion II analyses the gross domestic product by industry and type of income paynent, expanding table 1. Section III gives further details on the composition of the national income, expanding table 2, and in particular gives figures for the vages and profits paid by different industries (though unfortunately the bases of the industrial classifications are somewhat different). Section IV deals with he sources and distribution of personal income and shows how it is affected y taxation, carrying further one of the subjects covered by table 3. Section V gives a detailed account of personal consumption expenditure (the first group of items in table 4) including estimates of expenditure in various years revalued at constant prices. Section VI describes in some detail the revenue, borrowng and expenditure of public authorities, elaborating the figures which occur n each of the first four tables; it also contains tables illustrating the incidence of taxation. Section VII deals with capital formation (the third group of items n table 4), giving analyses of capital expenditure on fixed assets by industrial sectors, social services, etc. Finally, in the Social Accounts which constitute he last section of the paper the figures are again summarised in a series of nterlocking accounts for different sectors of the economy. The aim of these ables is to present in the style of double-entry book-keeping all the most im>ortant of the money flows which form the subject of this paper.

1. NATIONAL PRODUCT, INCOME, AND EXPENDITURE: SUMMARY