APPENDIX I

THE NATIONAL INCOME

The discrepancies between various current estimates ofNational Income are more largely due to different ideas of themeaning of this concept than to strictly statistical differences,—uncertain though many of the underlying statistical estimatesmay be. The following note accepts Mr. Colin Clark 's statistics,but not his concept of gross national income, without attempt-ing to go behind them or to criticise them. The actual figuresgiven are Mr. Clark 's brought up to date where necessaryby Mr. Rothbarth for the financial year April 1, 1938-March 31, 1939 in terms of the prices of that year.

There are two fundamental concepts which are serviceablefor general use. The first is the total current output measuredin terms of money cost, already given in the text, namely:

£ million

3,710 current value of private consumption excluding in-direct taxation but including the cost of makinggood current depreciation;

290 current cost of net new investment in buildings,plant, transport and stocks, i.e., current capitaloutlay in excess of what is required to make goodcurrent capital depreciation;

850 current cost of Government operations excluding"transfer" payments to pensioners, holders ofnational debt, etc., expenditure out of which isalready included in the previous items.

4,850

I propose to call this the National Output.

The second concept is that of Taxable Income, namely theaggregate of individual incomes (including charities, privateinstitutions and companies). It differs from the above inthat it includes "transfer " incomes of £500 million and excludesGovernment non-tax income of £50 million from tradingprofits. It follows that its amount is £5,300 (£4,850+£500—£50) million. It can also be broken down into the followingconstituents:—

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