The study concerns the performances of first grade children in solving problems involving subtraction situations and the relationship of these performances to levels of conservation of numerousness and to I.Q. groups. The subjects were grouped into levels of conservation by a pretest administered prior to the main test of problem solving in subtraction. The effects of aids and transformations on the performances of the children in the problem solving test were also examined. An analysis of the results yielded the following: (1) children in the highest level of conservation of numerousness performed significantly better than those in the third and fourth levels; (2) there were significant differences among the performances of children in the three I.Q. groups; (3) there were significant differences among the twelve groups of children formed by levels of conservation and I.Q. groups; (4) the pretest of conservation of numerousness was found to be a better predictor of success in problem solving than the group I.Q. test; and (5) subtraction problems without aids or without transformations were significantly more difficult than problems with aids or with transformations. (Author/JG)