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The article presents the report of the President presented at the annual business meeting of the American Economic Association. It presents the critical examination of the inadequacies to train physical scientists and engineers and there is quite general agreement on the need for a substantial strengthening of this aspect of our educational system. However various people who have pressed for such a strengthening have been careful to insist that it ought not to be accomplished at the expense of work in the social sciences and the humanities. It seems desirable to use the competition to encourage the balanced type of contribution that combines the deductive and empirical approach. Both the entries in the competition and the responses to the informal survey indicate a situation which is cause for grave concern. There is something wrong with the incentives under which economists work in the early stages of their careers. A systematic canvass needs to be undertaken to determine what steps should be taken these incentives so as to made studies that are both theoretical and factual more attractive than mere a priori model analysis inquiries.

The article presents a discussion on the tendencies in economic theory. One argues that little or nothing worth has been accomplished in theory during the last thirty years and there is little really left to do. Another says that it is just an evaluation of results and of possible tasks which textbooks in economics have furnished. For example, the subject of trade unionism is badly in need of a general, even if tentative, statement of results. The clear vision and the sense of relative values which such a text would impart should suggest to the workers in the field the tasks which are really most worth doing. Another has put forward his view that much of the economic theory has been static theory, concerned with "normal equilibria" and delicate marginal adjustments, resting on the assumptions of a fluid market where labor, capital, and goods are perfectly mobile. If these assumptions were true, money would, indeed, be a meaningless "cloak," obscuring the real forces at work. It is, moreover, quite grotesque for static theory to offer itself as a support for its own foundation. A static or "normal" theory of money and credit, resting on the notion of accomplished equilibrium, after transitional changes have been effected, misses the main point as to the function of money and credit. Static theory which assumes frictionless fluidity, misses the whole point concerning money and credit. A functional theory of money and credit must be a dynamic theory, basing itself on an analysis of friction, of transitions and the like.

The article highlights the concept of political economy coined by well-known socio-economist Horace Greeley. Historians of economic thought, in customarily appointing Henry C. Carey dean of the American School, have generally neglected the high spokesman of discontent, Horace Greeley, founder and editor of the "New York Tribune." Horace Greeley's life and political economy stand out as clearer expressions of a young America in its middle period transition. Greeley was an awakened figure of his time. Never the totally eccentric dreamer he is frequently considered, he found himself aware that narrow parochialisms were breaking up, and he aimed to conform society to the changes under way. He saw his country as the great chance for righting wrongs- and he wished to make it a proving ground for social experimentation. Thus, he devoted his life and his paper to teaching the people to seek freedom by building a wealthy nation in which resources should be correctly utilized and special privileges should be destroyed.

This article evaluates the report on Behavioral and Social Sciences Survey which assesses the state of political economics in the U. S. The conventional economists unduly emphasize, at the expense of more important things the methods and techniques applicable. Various recommendations from the panel of economist who have surveyed the entire field of economics are presented. Also recommended that the economic profession pay more attention to the economic implications of the fact that the U. S. is heavily involved as the power in a hierarchical international capitalist system.

The next annual meeting of the American Economic Association will be held in Washington, during December 28-30, 1931. Hotel Washington has been selected as headquarters. Some names have been added to the membership of the association since May 1. The index to volume II of Social Science Abstracts has recently been published. This index constitutes the largest single reference work on the world's periodical literature in the social sciences for 1930. There are over 36,000 topical entries in the subject index and the names of over 12,000 contemporary writers in the authors' index. Reference was made in the March issue of the Review to a series of studies under the auspices of the Social Science Research Council relating to agriculture. The National Association of Real Estate Boards has sent out a memorandum which has been placed before U.S. President Herbert C. Hoover relating to the possibility of creating a discount system which would serve existing financial institutions making loans on urban residences in much the same way as the federal reserve system serves commercial banks.

The article discusses the role of money in economic theory. Political economy, is the science of business, and economic men are money-makers; nevertheless, the use of money is a fact of no importance for economic theory. This seeming contradiction between the letter of the economic law and its spirit as interpreted by loyal commentators long passed without notice. While the psychological school has been developing its pecuniary logic, certain pure theorists have sought another way of emancipating themselves from hedonism. To explain and to predict economic behavior, then, the economist needs a measure of the strength of the opposing sets of regularly acting motives. The use of money is one of these great rationalizing habits. It gives society the technical machinery of exchange, the opportunity to combine personal freedom with orderly cooperation on a grand scale, and the basis of that system of accountancy which Sombart appropriately calls "economic rationalism." The economist have tried treating money as a superficial phenomenon: they have tried using hedonism as the basis of economic rationality. But in working out, in treatise after treatise, a reasoned account of how men behave, they have come, without foreseeing what they were doing, to the basis on which Cournot built in 1888. The current tendency to make money "the center around which economic science clusters," then, is a tendency to be fostered.

The article discusses economic theorizing and scientific progress. There is a continuing interest among American economists in social speculation. The depression which many American economists feel as to the present state and tendency of the science, is something more than this habitual depreciation. The real charge against American economic speculation is not that it has made use of deduction but that it has made use of it wrongly and defectively. The indictment lies, in strict accuracy, not against erroneous method but against imperfect employment. The question remains whether formal verification--however essential in the physical sciences be either a possible or a necessary element in economic inquiry. Grave as has been the direct harm to the progress of economic science by faulty method, the larger injury has been the un-wholesome influence exerted by example upon students, devotees and disciples. This has taken the form of the encouragement of commendation, the vogue of text-book writing, the tolerance of metaphysical controversy as to final terms and ultimate concepts. If there be substantial truth in the foregoing, the moral to be drawn is neither methodological formulae nor an "advice to young economists," but a larger scientific consciousness.