The chief defects of the method are: I. The impossibility of testing how far the ownership of the wealth is within the country or not. It is obvious, for example, that if half the farms in a country are mortgaged to or owned by foreigners, their gross value will give a false statement of na tional wealth in the sense defined.
2. The difficulty of determining whether all forms of wealth have been included.
3. The risk of overlapping, e.g., stock and shares duplicated with real property owned by companies.
4. The absence of tests of profit earning capacity. For exam ple, the carriages, railway lines, stations, etc., of a railway com pany are all "valued," and their aggregate comes to, say, is,000, 000. The railway as a whole may have been losing money for years, or, may be making several millions a year.
is contended however that this difficulty may be exaggerated. As a general rule, on capitalisation of plus and minus "goodwill," the differences tend to cancel out, and an aggregate of valuations as "going concerns" tends to approximate to invested capital, except when there are striking changes in the value of money and rate of interest.
Sir Josiah Stamp's valuation of British national wealth for 1914 was as follows:— 5. The difficulty of accurately determining any "averages" em ployed as factors. If they are the results of impressions, they may be considerably in error, and even if they are the product of actual observations they ought usually to be carefully "weighted" in their application to the different classes. He has also given the following record for previous years Wealth of Various Countries.--Sir Josiah Stamp's summary of the estimated wealth of eighteen leading countries of the world at the outbreak of the World War in 1914 is set forth in the ac companying table giving the total wealth for each country and also the amount per caput of the population.
Owing to economic dislocation, to the rapid changes in the value of a common measure, gold, and to still more rapid change of national currencies as well as various other factors that must be considered, no really reliable estimates have been possible. Many rough guesses have been made, e.g., Sir Josiah Stamp s valuation for Great Britain and Ireland for 1928 was as follows (figures in million L) :—Real property: Build ings 4,500, Land 95o; Farmers' capital 450; Profits and Interest 16,170; Profits below income tax level 475; Furniture and mov able property 1,50o; Government and local property 900; Total 24,945; Less: belonging to people abroad 500; Gross wealth 24, 445; Deduct debt charges 6,400; Net wealth 18,045. He pointed
out the much greater importance, since the war, of problems relat ing to the effect of the national debt upon gross and net wealth.
The most recent figure of the wealth of the United States, was a Government estimate for 1922 of 321,000 million dollars, or, say, 65,0o0 million I. The savings of the United States since that time indicate that the total wealth at the end of 1928 will amount to $394,500,000,000, an increase of 22.9 per cent. over the 1922 figure. The per capita wealth is esti mated to have increased from $2,938 in 1922 to $3,287 in 1928. The prospect is that the total wealth at the end of 1929 will amount to $408,700,000,000 and the per capita wealth to $3,366.
The following table shows the estimated savings and increase in wealth of the United States since 1922, according to two authori ties.
Savings and Wealth of the United States (in Million $) *Recent estimates by National Industrial Conference Board.
The same authorities estimate the wealth of the entire British Empire as $210,000 million and the whole world at $1,1oo,000 million. This means that the United States, with only 6.3 per cent. of the world's population and only 5.3 per cent. of the world's land area, has approximately 35 per cent. of the world's wealth. The United States has 78 per cent. of all the automobiles in the world, 72.5 per cent. of the telephones, 58.5 per cent. of the telephone and telegraph lines. 38.3 per cent. of the monetary gold, 34 per cent. of the railroad mileage, 23.6 per cent. of the hogs, 21.7 per cent. of the ships, and 21.5 per cent. of the cotton spindles.
of the Royal Statistical Society, various dates, on the "Multiplier"; (193r) on "The National Capital." See Sir Josiah Stamp, British Income and Property (1916), and Current Problems in Finance and Government. (J. S.)