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DEPOSIT D BY THE UNITED STATES OF AMERICA

The President.

Letter of Transmittal

COUNCIL OF ECONOMIC ADVISERS,

Washington, D. C., December 13, 1947.

SIR: The Council of Economic Advisers herewith submits its Second Annual Report in accordance with the requirements of Congress as set forth in the Employment Act of 1946.

THE MEANING OF MAXIMUM PRODUCTION AND MEANS OF AT-

TAINING IT____

What Would "Maximum" Production Be?____

Foresighted Development of Resources Is Necessary to

Maximum Production__.

High Production Demands Adequate Capital_

How Can the Adequacy of Capital Be Judged?_

The Labor Aspect of Maximum Production__.

Management and the Profit Motive Affect the Level and

Continuity of Production___.

77

8

9

10

12

16

Maximum Production Must Be Properly Balanced____

To Achieve Its Maximum, Production Must Anticipate

Consumer Responses..

18

20

Private Production, Public Demand, and the Role of Gov-

ernment

24

PART III

MAXIMUM PRODUCTION WOULD INVOLVE REAL PRICE COMPETI-

TION

28