MY DEAR MR. PRESIDENT: We have the honor to transmit herewith a report on "The Structure of the American Economy", prepared under the direction of our Industrial Committee by Dr. Gardiner C. Means and his staff. This document is the first major attempt to show the inter-relation of the economic forces which determine the use of our national resources. It indicates some of the problems which must be faced and solved if we are to have reasonable use of our resources and full employment.

The members of the National Resources Committee wish to indicate their belief in the importance and value of this report as a stimulant to public discussion, and to further efforts for solution of the problems presented.

This report on the Structure of the American Economy was undertaken as a result of discussions between the Advisory Committee of the National Resources Committee and its Industrial Committee wherein emphasis was given to the need for a broader understanding of the national economy as a functioning whole. Its preparation would have been impossible without the prior work of the countless individuals who have contributed to the growing body of statistical data reflecting contemporary social and economic activity. Acknowledgment and appreciation are due especially to the Bureau of Internal Revenue in the Treasury Department, the Bureaus of Agricultural Economics and of Home Economics in the Department of Agriculture, the Bureaus of the Census and of Foreign and Domestic Commerce in the Department of Commerce, the Bureau of Labor Statistics in the Department of Labor, the Division of Research and Statistics of the Federal Reserve Board, the Research and Statistics Section of the Securities and Exchange Commission, the National Research Project of the Works Progress Administration, the National Bureau of Economic Research, and the Harvard University Committee on Research in the Social Sciences for making available unpublished data and in many cases giving advice as to its significance. In addition to the acknowledgment due to the technical staff who assembled and organized the data and to the contributors to the statistical appendix who filled important statistical gaps, acknowledgment is due to Dr. A. F. Hinrichs and Mr. Louis Bean for serving as alternates to members of the Industrial Committee and for providing valuable criticism, to Dr. Hildegarde Kneeland for critcism of the chapter on the structure of wants, to William R. Muench who supervised most of the statistical computations, and to Charles Faunce, who with the assistance of Norman F. Hampton, was responsible for the drafting of charts.

Earlier reports of the National Resources Committee and its predecessors have examined the Nation's material resources of land, water, and minerals; the changing character of the population which seeks to utilize these resources; and the improving engineering techniques whereby resources are used to serve human wants. In each of these reports a major aspect of the national household has been sketched in with a greater or less degree of detail in order to give a background for the development of major national policies and to provide a larger frame of reference within which specific problems in specific fields could be more intensively analyzed.

In this report on the Structure of the American Economy an effort is made to bring the major aspects of the national economy into focus so as to emphasize the organic character of the process whereby the Nation's resources are employed to provide useful commodities and services. This emphasis on organization requires that the national community be treated as a single functioning whole and in such a way that every phase of human activity is covered insofar as it involves the use of resources. Only by bringing all the different aspects of the national economy into a single frame of reference can a basis be laid for developing effective policies in respect to particular aspects.

This frame of reference is so broad in scope that it has been necessary to introduce certain limitations in order to keep the report within manageable proportions. The first of these is the concentration of the report on what have been called the structural characteristics of the national economy-those characteristics which show a high degree of continuity-changing only gradually or not at all and giving to the American economy its particular character. The second limitation is introduced by seeking out only what are believed to be the main structural characteristics, especially those which appear to be of major significance for the problem of obtaining more effective use of national resources. A third limitation has developed inadvertently. Certain major structural characteristics are not covered or are only very inadequately covered in the report. On some of these such as the trend of consumer savings, data are so completely lacking that they could not be included. Others were to be included according to the original plans for the report but the investigations necessary to their inclusion were incomplete or inadequate to allow their inclusion without unwarranted delay in publication. The most serious omission of this sort is an analysis of the debt and ownership structure and the structural aspects of interest rates. Such gaps are indicated at the appropriate points in the text. In spite of its shortcomings, the report is presented in the hope that it can give added background for the development of national policies respecting the use resources.

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We have the honor to transmit herewith the report on the Structure of the American Economy requested by the Advisory Committee as background to an understanding of the basic national problem of unemployed resources. The report has been prepared by a staff under the direction of Dr. Gardiner C. Means, who takes primary responsibility for the material presented and its detailed organization.

We wish to emphasize the central importance of insuring reasonably full use of resources. We believe that this report should help to clarify the character of this basic national problem.