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Exam Questions Harvard Principles Suggested Reading Syllabus

Harvard. Reading Lists and Semester Exams for Principles of Economics. Dunlop, Gill and Sanberg. 1965-1966

Richard T. Gill directed the Harvard economics department’s Juggernaut course Economics 1 (Principles of Economics) for eight years (1958/59-1966/67). He was followed in turn by Otto Eckstein, a.k.a. “Otto Ec-10” (1967/68-1983/84), Martin Feldstein (1984/85-2004/05), and Gregory Mankiw (2005/06-2018/19).

I suspect that the reason for Richard T. Gill’s giving the first six lectures in the Economics 1 (which was taught for the most part in smaller sections) was that an overview of economic history and the history of economics was better provided as a series of briefings than as socratic dialogues. Also few graduate students and junior faculty would have had even minimal exposure and/or interest in those subjects. 

In this post we provide some background to Economics 1 à la Gill and a sketch of the stations of his eclectic career which are followed by the semester readings and exams for the Principles of Economics as taught in the Harvard economics department in 1965-66.

Bonus material: Joseph Shore & Richard T. Gill, Rigoletto — Quel vecchio maledivami & Pari Siamo (1979 recording). Joseph Shore wrote “Richard T Gill was the greatest Sparafucile I ever sang with and this is the best duet I sang in all my Rigoletto shows.” 

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Ec 1: A Monster Becomes an Institution Everything About Ec 1 Pleases Gill Now Except Gen Ed Status

By Richard R. Edmonds
April 12, 1967

Economics 1 has never been unknockable. Students always moan a little about the ultra-general final exam questions and the obscurities of Dorfman’s price theory text. And all but the most even-tempered freshmen at times grow resentful of the inevitable calculus wonk who loudly corrects mistakes in his section man’s graphs. These are minor irritants though. The vast majority of students (95 per cent according to a 1962 Economics Department survey) end up satisfied with Ec 1 and the course hardly seemed a target for radical discontent.

So the prospect of a critique of Economics 1 by the Harvard-Radcliffe Young People’s Socialist League was a bit startling both to those who run the course and those who take it. The eight-page document, released last month, was an anti-climax. Though well-researched and well-written, it blunted the edge of its militancy with too much scholarly prose, and too little focus on how the course should change.

The critique drew mixed reviews. Arthur Smithies, Nathaniel Ropes Professor of Political Economy, thought it raised economic issues that deserved to be considered seriously. Several Ec 1 sectionmen and former sectionmen said they agreed completely with its criticisms of the course. But Richard T. Gill ’48, lecturer in Economics and administrative head of Ec 1 since 1959, didn’t like the critique at all, and his opinion was crucial.

Unruffled

Gill wasn’t ruffled by the sight of a pair of students telling him in print how the course should be run. And though he found the eight pages full of faulty economics, he wasn’t worried about the effect of these errors. What bothered him was what he considered the narrowness of the critique’s “new left” view of economics. The public “dialogue” its authors insistently demanded was just what Gill wanted to avoid. This is Gill’s final year as head of the course and he understandably does not want to leave it in a blaze of artificial controversy over issues he considers trivial.

A month after the critique was issued, it appears to have failed as an instrument of radical reform. At a March 6 Ec 1 staff meeting Gill asked if there was any sentiment for revising the course substantially; only a couple of hands went up. Several of the section men who liked the critique best didn’t even bother to attend. Whether the critique succeeded in exposing serious deficiencies in Economics 1 is still an open question.

Curiously the critique is more a reactionary than a radical document. Though the critique’s author Stephen Kelman ’70 and his confederates would deplore the suggestion that they wanted a return to the good old days, it is ironic that instituting all the practical changes their criticisms implied would make the course much as it was in the late 50’s.

Before Gill took over the course in the spring of 1959, he and three others in the Department submitted a massive plan for revising Ec 1 (their outline for the revised course was more than 20 pages long). Gill acted, he says, because “Economics 1 had settled into a rut; the focus was too much on the system in the United States here and now parts of the course got bogged down in diagramatics so that students were learning tools and not much else.”

During the late ’50’s both the number of students taking Ec 1 and the number concentrating in Economics were declining. Since Gill took over course enrollment has soared from 550 to this year’s all-time high of 829.

Gill made three big changes in Ec 1’s content. He added the section on British industrialism and the classical economists that now fills the first month of the course, as well as the chunk on the Soviet economy (being taught this week and next) and the exhaustive treatment of underdeveloped countries that occupies the rest of the spring.

To make room for the new material, three weeks on distribution (which the critique says is now inadequately treated by a few sentences in Dorfman) were trimmed and the material reinserted in other parts of the course. The other major casualty was a three week section on “alternatives to capitalism” that used to come during reading period, right after the course had developed micro-economic theory and applied it to American capitalism. (It was the critique’s final and most specific charge that socialism receives only “confusing attention” now in Ec 1.)

The history of economic theory is Gill’s special interest, but he says that “personal predilections” only partly explain how Ricardo and Arkwright found their way into an introductory economics course. The first month of Ec 1 is designed, says Gill, “to convey the relativity of present economic conditions to institutions and ideas of the past, to relate economics to the rest of the social sciences.”

The value may be here, but it escapes many students. A survey the Economics Department took in 1962 asked those who took the course whether there should be more or less on each of the 14 topics covered. The pollees voted for more of everything but economic history and Gill accordingly chopped out a third of the material. Some feel he should have gone farther.

“The course has to be introduced with a problem,” says one section man, “but the story of how England got to be the kind of economy it is, is not as germaine as it might be for the majority of students.” Another, who is in his third year teaching the course, says, “At first I couldn’t see any point to it, but now I’m starting to agree with Gill that it’s a good way to get people started.”

Behind the criticisms of Ec 1’s historical material and behind last month’s critique as well is the conviction that the course would be better if it were more political. “This is the only course most people take in economics,” says a section man, “so there ought to be more time on present problems and less on economic tools.” Kelman’s call for more “controversy” in Economics I was based on a similar idea — the course should be constantly examining both sides of economic questions instead of trying to develop an objective economic theory first.

The critique’s vision of an issues-oriented introductory course is not a new idea. In the late ’50’s and early ’60’s Harvard had a Gen Ed course called “Economics of the Citizen” which tried this approach. It never became as popular as the more rigorous Ec 1. Eventually it gained the reputation of being a gut of little substance that the self-respecting avoided. Gill argues that talking explicitly about controversy isn’t always the best way to equip students to talk about political problems — “you can’t just describe economics — you’ve got to get down to working those damn curves to understand the problems.”

Gill’s 1959 plan changed the structure of Ec 1 as well as the material it covers. In the old days Ec 1 lectures were strictly a star show-each of the Department’s great men mounted the podium once and talked for an hour to the crowds below. Though continuity may still be lacking, the lectures under Gill’s regime have a function. They come in blocks instead of being scattered sporadically throughout the term and the blocks give the course more structure than it once had by forcing section men to keep pace with upcoming lectures.

Lectures are scheduled on the kind of material that probably wouldn’t otherwise get covered — background to policy and development questions where vast amounts of knowledge have to be condensed and jammed into a single meeting. The section men are left with huge chunks of the course material — notably microeconomic theory for which they have to develop a teaching approach of their own. This ingenious division of labor, Gill’s biggest improvement, has made the monster course smooth and flexible.

Gill has been the influential figure in giving Ec 1 its present shape, but he doesn’t run the course by himself. Actually Economics 1 is governed like a Harvard in miniature — responsibility is scattered and different kinds of decisions are made at different levels. In the course catalogue, the Department chairman’s name always is listed first — even before Gill’s. Most years the chairman gets no closer to the mechanics of the course than providing section men and giving a couple lectures, but the listing indicates that… [article truncated here]

SourceThe Harvard Crimson, 12 April 1967.

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Touching Basses: The Extraordinary Lives of Richard T. Gill
CLASS OF 1948

By Andrew K. Mandel, CRIMSON STAFF WRITER
June 1, 1998

What happens when you put a prizewinning pugilist, an economist, a world-renowned opera singer, a Harvard House master and a television personality in the same room?

Richard T. Gill ’48 stands alone.

A former Economics 1 professor who led Leverett for 16 years as senior tutor and then master, Gill has written books with Professors Nathan Glazer and Stephan Thernstrom, has sung with all Three Tenors and Beverly Sills, earned The Atlantic Monthly’s short story prize and won a few boxing matches along the way. This all began not long after he entered Harvard College–at age 16.

Gill’s sister says her brother has always been “phenomenal.”

And his wife cannot help but chuckle when she looks back on her “very fascinating, if at times hair-raising” life alongside her husband of 48 years.

Longtime Harvard administrator Fred L. Glimp ’50 says Gill is “as close to a Renaissance man as I’ve ever met,” calling his former colleague “the kind of a guy that–if he weren’t so nice and so kind and impressive in a human way–everybody would hate him because he’s so dog-gone good at almost anything he puts his hand to.”

With Honors

The Long Branch, N.J. native was a product of the Depression, the youngest of three children.

His father Thomas G. Gill worked for a billboard advertising firm hit hard by the economic crisis of the 1930s; Richard lived what he called a “tight, but very happy childhood,” drawn to vocal performance by his mother Myrtle, a music teacher.

Gill met his future wife Elizabeth at a community concert when they were both 15. Their relationship was “stormy off and on,” Elizabeth Gill says, “but ultimately it was on.”

Placing second out of more than 100,000 students in a national American Legion Oratorical Contest in high school, Richard Gill came to Harvard in 1944 and led the Debate Council as its president, winning the College’s Coolidge debate prize and delivering the Class Oration senior year.

A congenial man to interview, Gill was apparently quite the fighter–both behind the podium and in the ring–as an undergraduate.

After Gill accidentally broke someone’s nose in boxing class, the coach of the varsity boxing team approached Gill and encouraged him to fight for Harvard.

Gill also managed to find a niche as a soloist in the Glee Club, the editor of the Student Progressive, the head of the Liberal Union and a member of Phi Beta Kappa junior year.

“I was busy,” Gill acknowledges.

Called away from Cambridge after sophomore year, Gill spent time in the army stationed in Japan, and won the regimental boxing championship, in the middleweight division.

Once back in the Square, Gill graduated summa cum laude in economics, garnering the Palfrey Exhibition (awarded to the most distinguished graduating scholarship student) and a Henry Fellowship to study philosophy and psychology at Jesus College in England.

And though he later earned a Fulbright Fellowship for further study, Gill returned to the States after only a year abroad when his father became ill.

Mastering Harvard

At age 21, Gill became an assistant dean of the College, and claims to be the youngest “baby dean” in Harvard College history.

Awarded his Ph.D. in economics in 1956, Gill directed the largest course at the College, known now as Social Analysis 10: “Principles of Economics.”

And by 1963, after an eight-year stint as senior tutor, Gill and his wife Elizabeth were moving into the master’s residence at Leverett House.

Being administrators during the days of student protests was challenging, the Gills admit.

When strangers threw rocks through the windows of the Gill home and nearly injured their children, Elizabeth Gill was not sure if the protests were directed at her advocacy of increased diversity in Cambridge’s public school teaching staff–or at her husband’s “neanderthal” ideologies.

“It turns out they were my enemies,” she sighs.

Her husband’s commitment to freedom of speech was unpopular in the late ’60s, Gill says.

“I was very much a law-and-order type,” Richard Gill notes.

Gill says one of his Leverett students had interned for President Lyndon B. Johnson, and there was a good chance LBJ would agree to speak at the House senior dinner. (“Not even [famed Eliot House Master] John [H.] Finley [’25] could’ve topped that,” Gill laughs.)

Ultimately, Johnson declined the offer–and Gill, who faced “the sharpest of criticisms” from some Faculty members for extending an invitation to the commander-in-chief during the Vietnam War, concedes that the president’s arrival “would have caused a riot.”

The Making of a Star

At the same time protesting at Harvard had begun to take center stage, Gill found his way to the spotlight.

A heavy smoker for many years, Gill decided to quit in favor of private voice lessons, where he practiced furiously.

In May of 1967, Gill appeared as the Count in the Leverett House Opera’s The Marriage of Figaro. The production–“the most charming I have ever been a part of,” Gill beams–was organized by the student-directoral team of John Lithgow ’67 and John C. Adams ’69.

The Crimson review of Figaro was quite positive.

“Master Richard Gill, who plays the Count, would be well worth hearing by himself. His voice is as majestic as his hearing; he is at once dramatic and agile,” the student reviewer wrote. “If his tone quality were only a little more variable, if he could sound sweet and smooth when necessary, he would be unassailable.”

Spending a year on sabbatical in England, Gill sang regularly–away from the “fear of failure in front of my Harvard colleagues”–and was encouraged to perform professionally.

By 1971, he could not resist auditioning for the New York City Opera–just to see how good he was.

He was deemed extremely good–and eventually accepted a trial position as a basso with the Manhattan opera company in 1971.

The contract paid $75 a night, and Gill was guaranteed a grand total of two performances.

It was “risky” to say the least, but Gill says he and his wife agreed that they “had to just go for it.”

Armed with a sizable advance on a large economics textbook Gill was commissioned to complete, the couple announced their departure to nonplussed Dean of the Faculty John T. Dunlop in the spring.

Their three sons were supportive of the career change, and their youngest transferred high schools when the Gills moved to Allendale, N.J.

“We were sort of oblivious to the real risks he took,” says son Peter S. Gill ’78, who was unfazed upon noticing that his sixth-grade anthology of short stories contained works by James Thurber, Ogden Nash and Richard Gill. “We always thought this was typical for him.”

“If I failed, there was no way to return to Harvard,” says Richard Gill, noting he would have opted to teach in “somewhere like Honolulu or Wyoming” if he bombed in New York. “Harvard is no place to come after you stub your toe violently.”

Gill’s toe did just fine.

Earning the rare distinction of moving from the New York City Opera to the Metropolitan Opera by virtue of the Met’s invitation, Gill performed as a principal artist from day one.

The former Harvard House master became a world-class opera singer overnight, travelling from Pittsburgh to Amsterdam to Carcacas in a 14-year career spanning dozens of operas. His performance stirred Variety magazine to use the words “Richard T. Gill” and “tour de theatre” in the same sentence.

In the mid ’80s, Gill added another section to his resume. Combining the scholarship of his Harvard days with the glamour of the opera, Gill found a home in the television studio, helping to create ECONOMICS U$A, a 28-program public broadcasting television series for which he served as an on-air analyst.

The Encore Academic

By 1992, Gill had written several economic textbooks, as well as a sociological work entitled Our Changing Population with Professor of Education and Social Structure Emeritus Nathan Glazer and Winthrop Professor of History Stephan Thernstrom. His latest work, Posterity Lost: Progress, Ideology and the Decline of the American Family, was published last year.

Gill will discuss his book in one of the symposia planned for the class of 1948 on Wednesday.

But first, Gill will perform with the Boston Pops as their featured vocalist tomorrow evening.

“He’s Mr. Eclectic,” son Peter says.

When asked to explain his wild versatility, Richard Gill jokes that one must have “a certain limited intelligence to try so many things.”

Originally considering life as a lawyer, after serving a year in the Army as a teenager, “I had a reconsideration of my lifelong goals,” Gill says. “I can only applaud this decision in retrospect.”

SourceThe Harvard Crimson, 1 June 1998.

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Course Announcement

Economics 1. Principles of Economics

Full course. Indivisible. M., W., F., at 12. The major part of the course is conducted in sections. Throughout the year, however, there will be lectures, generally on W., at 12. M., W., and F., at 12 will be the normal hour for section meetings, but sections will be scheduled at other hours. Professor Dunlop, Drs. R. T. Gill, Sanberg and other Members of the Department.

The Department encourages students considering concentration to take this course in their freshman year.

Designed to introduce students to the methods of economic analysis that bear on the issues which confront this country and the world. Will thus serve the needs both of those students who plan no further work in Economics and those who desire to obtain the groundwork for more advanced courses in the field.

Source: Harvard University, Faculty of Arts and Sciences. Courses of Instruction for Harvard and Radcliffe, 1965-1966, p. 102.

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ECONOMICS I
1965-66
Readings for the Fall Term

*To be purchased by students

Adams, W. (ed.), The Structure of the American Economy (Third Edition)

*Caves, R., American Industry: Structure, Conduct, Performance

Committee for Economic Development, An Adaptive Program for Agriculture

Council of Economic Advisers, Report to the President on Steel Prices

*Dorfman, R. The Price System

*Gill, R., Economic Development: Past and Present

Hanson, A., Business Cycles and National Income

Heilbroner, R., The Making of Economic Society (paperback)

Heilbroner, R., The Worldly Philosophers (paperback; revised edition)

Joseph, M.L., et.al., Economic Analysis and Policy

Koivisto, W.A., Principles and Problems of Modern Economics

Mantoux, P., The Industrial Revolution in the Eighteenth Century

Meier & Baldwin, Economic Development

Phelps, E.S., Private Wants and Public Needs

Rees, A., The Economics of Trade Unions

*Schultze, C.L., National Income Analysis

Smith, A., Wealth of Nations

*  *  *  *  *  *  *  *  *  *  *

ECONOMICS 1

All lectures will be given at 12 noon in Lowell Lecture Hall. Section assignments will be posted outside University Hall 9 at 9:00 a.m. on Thursday, September 30. If any conflicts develop, resectioning will be held in University Hall 9 on Monday, October 4, and Tuesday, October 5, from 2:00 to 4:00 p.m.

Lectures: Dr. Gill Sections
Mon., Sept. 27 Fri. or Sat., Oct. 1 or 2
Wed., Sept. 29 Mon. or Tues., Oct. 4 or 5
Wed. or Thurs., Oct. 6 or 7
Fri., Oct. 8 Mon. or Tues., Oct. 18 or 19
Mon., Oct. 11
Wed., Oct. 13
Fri., Oct. 16

Hour Exam, Wed. Oct. 20 at 12 noon

Sections meeting at 12 noon will take the hour exam in their regular classrooms; sections meeting at other hours will take the exam in Lowell Lecture Hall at 12.

There will be occasional lectures later in the term which will be announced in sections and in the Crimson.

*  *  *  *  *  *  *  *  *  *  *

ECONOMICS I
Fall Term 1965-66

  1. Introduction: Problems and Concepts (Sept. 27 to Oct. 2)

Reading:

Koivisto, Principles and Problems of Modern Economics, Chaps. 1 & 3

  1. Historical Development and the Doctrine of Laissez-Faire (Oct. 4 & Oct. 19)
    1. Historical Foundations of Industrial Society

Readings:

Gill, Economic Development, Chaps. 1-4

Heilbroner, The Making of Economic Society, Chaps. 1-3

Mantoux, The Industrial Revolution in the Eighteenth Century, Part II

    1. The Classical Economists and the Doctrine of Laissez-Faire

Readings:

Heilbroner, The Worldly Philosophers (revised ed.), Chaps. 1-4, 6

Smith, The Wealth of Nations, Bk. I, Chaps. 1 & 2; Bk. IV, Chaps. 2 & 3, Part II

Meier & Baldwin, op. cit., Ch. I

October 20, Hour Exam on Parts I & II

  1. Markets and Industrial Organization (October 22 to December 18)
    1. Competitive Markets
      1. The Concept of the “Invisible Hand”
      2. Theory of the Firm
      3. Household Behavior
      4. Market Structure

Reading:

Dorfman, The Price System (last two chapters at the discretion of the instructor)

    1. Modern Industrial Organization
      1. Introduction

Reading:

Caves, American Industry, Ch. I

      1. Market Behavior

Readings:

Caves, op. cit., Chaps. 2 & 3

Adams, Structure of the American Economy, Chaps. 5 & 10

Council of Economic Advisers, Report to the President on Steel Prices

      1. Market Regulation

Reading:

Caves, op. cit., Chaps. 4-6

      1. Unions and Collective Bargaining

Readings:

Koivisto, op. cit., Ch. 21

Rees, Economics of Trade Unions, Chaps. 3 & 4

Joseph, Economic Analysis and Policy, Sections 41-46

      1. Agriculture

Readings:

CED, An Adaptive Program for Agriculture

Joseph, op. cit., Section 38

  1. The Economy in the Aggregate (Jan. 3 to Jan 28): Introduction to National Income Analysis
    1. Business Fluctuations and Depressions

Readings:

Hansen, Business Cycles and National Income, Chaps. 1-2

Joseph, op. cit., Sections 13-16

    1. The Determinants of National Income

Reading:

Schultze, National Income Analysis, Chaps. 2,3, & 4

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003, Box 9; Folder: “Economics, 1965-66 (1 of 2)”.

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1965-66
HARVARD UNIVERSITY
Midyear Examination
January 26, 1966

ECONOMICS I
(Three hours)

Answer all questions

  1. (20 minutes)

The major classical economists opposed the Corn Laws. What arguments of classical economic theory could be used to defend this position? In what respects were these arguments particularly relevant to British conditions in the early 19th century?

  1. (20 minutes)

The government decides to pay 20 percent of the cost of all food consumed.
(Do not worry about the source of the funds.) Illustrate the effects this policy would have on the consumption patterns and the standard of living of a typical consumer.

  1. (30 minutes)

Suppose the government legislates a significant increase in the minimum wage for a given industry. Taking a typical profit-maximizing firm in an industry with freely competitive product and factor markets, initially in long-run equilibrium, trace the effects of this law on the use of labor, the use of other factors of production, the firm’s cost curves, and its output. What changes would one be likely to observe in the industry as a whole over a longer period of time? In what ways would such a policy affect the “efficient” allocation of resources in the economy?

  1. (30 minutes)

Show how the following phenomena operate as barriers to entry:

    1. scale economies
    2. absolute cost barriers
    3. product differentiation

Illustrate each of the above types of barriers to entry with references to the assigned reading.

  1. (20 minutes)

The demand for labor is said to be derived from the demand for the products which it produces. Show in what sense this is true. How might knowledge of this demand relationship be useful to a union in determining its wage demands?

  1. (20 minutes)

Using supply and demand analysis, discuss the operation of:

      1. an acreage limitation on a given agricultural commodity
      2. a law which requires that the commodity cannot be sold below a given price (which is higher than the present market price)
      3. a subsidy paid by the government to the farmer growing the commodity of a given number of cents per bushel grown
  1. (40 minutes)
GNP-GNI Personal Income Disposable Income Consumption Corporate Profits Indirect Taxes
300 240 200 190 36 24
350 280 233 220 42 28
400 320 267 250 48 32
450 360 300 280 54 36
500 400 333 310 60 40

Government spending is initially 80.
Private investment is 70.

    1. Given the above information, determine the equilibrium level of GNP. Show how you arrived at your answer. In what sense is this an “equilibrium” level?
    2. Why is Gross National Product (GNP) equal to Gross National Income (GNI)?
    3. Must the income and expenditures of each major sector of the economy — private individuals, business, and the government — balance in equilibrium? How do they compare in the above example?
    4. What is the Marginal Propensity to Consume out of GNP in the above example? What is the income multiplier?
    5. Suppose that full-employment GNP is at a level of 450. What change in government spending is necessary to achieve it, it no other relationship in the economy changes? What would this do to the government balance (surplus or deficit) in the new equilibrium position?

Source: Harvard University, Faculty of Arts and Sciences. Papers Printed for Mid-Year Examinations [in] History, History of Religions, Government, Economics, … , Naval Science, Air Science. January, 1966.

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ECONOMICS I
1966
Readings for the Spring Term

*To be purchased by students

Agarwala & Singh, The Economics of Underdevelopment

Bergson, A., The Economics of Soviet Planning

*Campbell, R., Soviet Economic Power

Domar, E., Essays in the Theory of Economic Growth

*Duesenberry, J., Money and Credit: Impact and Control

“Eckstein, A., “On the Economic Crisis in Communist China,” Foreign Affairs, July 1964.

*Eckstein, O., Public Finance

Friedman, M., Capitalism and Freedom

*Gill, R., Economic Development

Goldman, M., “Economic Controversy in the Soviet Union,” Foreign Affairs, April 1963.

Goldwin, R., Why Foreign Aid?

Hirschman, A., The Strategy of Economic Development

*Johnson, L., The Economic Report of the President, 1966

*Kenen, P., International Economics

Krause, L., The Common Market

Kuznets, S., Postwar Economic Growth

Leeman, W., Capitalism, Market Socialism and Central Planning

Lewis, J., Quiet Crisis in India

Mason, E., Economic Planning in Underdeveloped Areas: Government and Business

Nurkse, R., Problems of Capital Formation in Underdeveloped Countries

Phelps, E., Private Wants and Public Needs

Rostow, W., The Economics of Take-off into Sustained Growth

*Schultze, C., National Income Analysis

*  *  *  *  *  *  *  *  *  *  *

ECONOMICS I
Spring Term 1965-66
  1. The Economy in the Aggregate, Part II: Analysis of the Problems of Economic Stability and Growth (February 7 – April 1)
    1. The Determinants of National Income – Review

Reading:

Schultze, National Income Analysis, Chs. 2-4 (review)

    1. Public Finance and Government Expenditure

Readings:

Eckstein, Public Finance, Chs. 1-2, 5-8

Phelps, Private Wants and Public Needs, Chs. by Galbraith, Bator, Hayek, and Break.

    1. Money and Monetary System

Readings:

Schultze, National Income Analysis, Ch. 5

Duesenberry, Money and Credit, Chs. 1-8

Friedman, Capitalism and Freedom, Chs. 3 & 5

    1. The Dynamics of Growth

Reading:

Domar, Essays in the Theory of Economic Growth, Ch. 4
(also in American Economic Review, March 1947, pp. 34-55)

    1. Economic Growth in Advanced Countries

Readings:

Schultze, National Income Analysis, Ch. 6

Kuznets, Postwar Economic Growth, Lecture II

    1. International Trade

Readings:

Kenen, International Economics, Chs. 1-5

Krause, The Common Market, Introduction

    1. Problems of Government and Economic Policy

Reading:

The Economic Report of the President, 1966

(Spring Recess April 3 – April 10)

  1. Economic Growth and Organization in Other Countries (April 11 – May 19)
    1. The Soviet Economy
      1. Introduction: The Theory of Planning

Readings:

Mason, Economic Planning, Ch. 3

Leeman, Capitalism, Market Socialism…, Ch. by Leontief

Bergson, The Economics of Soviet Planning, Ch. 14

      1. Growth and Organization of the Soviet System

Reading:

Campbell, Soviet Economic Power, Chs. 1-8

      1. Outlook for the Future

Readings:

Campbell, Soviet Economic Power, Ch. 9

Goldman, “Economic Controversy in the Soviet Union,” Foreign Affairs, April 1963

Kuznets, Postwar Economic Growth, Lecture IV

    1. Economic Growth of Underdeveloped Areas
      1. The Underdeveloped Economy

Readings:

Gill, Economic Development, Ch. 5

Kuznets, “Underdeveloped Countries and the Pre-industrial Phase in the Advanced Countries,” in Agarwala & Singh

      1. The Process of Economic Growth

Readings:

Rostow, “The Take-off into Self-sustained Growth,” in Agarwala & Singh

Kuznets, “Notes on the Take-off,” in Rostow, Ch. 2

      1. Issues in How to Induce Economic Growth

Readings:

Nurkse, Problems of Capital Formation, Ch. 1

Hirschman, The Strategy of Economic Development, Chs. 2 & 4

      1. Case Studies — India and China

Readings:

Lewis, Quiet Crisis in India, Chs. 2, 3, & 6

Eckstein, A., “On the Economic Crisis in Communist China,” Foreign Affairs, July 1964

Gill, Economic Development, Ch. 6

      1. Foreign Aid and International Trade

Readings:

Goldwin, Why Foreign Aid?, pp. 10-32, 90-108, & 131-140

Kenen, International Economics, Ch. 6

  1. Conclusion: Problems and Prospects (May 20 – May 23)

No Readings

NOTE: Resectioning to remove class conflicts will be held in University Hall 9 on Monday, February 7 and Tuesday, February 8 from 2:00 to 4:00 p.m.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003, Box 9; Folder: “Economics, 1965-66 (1 of 2)”.

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1965-66
HARVARD UNIVERSITY
Final Examination
June, 1966

ECONOMICS I
(Three hours)
  1. (60 minutes)

Suppose inflationary pressures lead to price increases in several sectors of the economy. What steps should the Federal Government take to restrain these inflationary pressures? How might other economic objectives be jeopardized by efforts to control the inflation? How might your views on the question of “social balance” of the public versus the private sector affect your policy proposals for dealing with the inflationary problem? If the country in question were the United States in 1966, would you have to take into account the balance of payments situation in making your policy decisions?

  1. (30 minutes)

Define and relate four of the following five pairs of terms:

    1. Full employment surplus – balanced budget multiplier
    2. Preconditions – take-off
    3. Allocational efficiency of taxation – equity of taxation
    4. G.A.T.T. – E.E.C.
    5. A budget deficit financed by Treasury sales of bonds in the open market – a Federal Reserve open market sale of bonds
  1. (30 minutes)

In The Good Society (1936) Walter Lippmann wrote:

“It may be predicted confidently that if ever the time comes when Russia no longer feels the need of mobilization military build-up and forced industrialization), it will become necessary to liquidate the planning authority and to return somehow to a market economy.”

Do recent economic reforms in the Soviet Union support this statement? What advantages might an increased role of markets in the U.S.S.R. have for that economy?

  1. (30 minutes)

“If one thing is certain it is that the path to development of the modern poor country will be very different from that of the earlier developers of the West. The problems are different and so also are the mechanisms for solving these problems.”
Discuss this question, giving specific examples to illustrate your points.

  1. (30 minutes)

Choose one of the following questions:

    1. Country X has three nationalized industries: railways, steel production, lighthouses.
      What should be the price and output policies of each industry if efficient allocation of resources were the national goal? How would each industry be financed? How would the results compare with a free market organization in these industries?
    2. In Australia, with no foreign trade, wool costs $5.00 per unit and cloth costs $12.00 per unit. In India, with no foreign trade, wool costs 10 rupees per unit and cloth costs 12 rupees per unit.
      If the cost of shipping a unit of either wool or cloth from one country to the other is $2.00, would trade take place? Explain.
      If it costs $2.00 to ship a wool unit, what is the cost of shipping cloth at which there will no longer be any gain from trading?

Source: Harvard University, Faculty of Arts and Sciences. Papers Printed for Final Examinations [in] History, History of Religions, Government, Economics, … , Naval Science, Air Science. June, 1966.

Image Source: Master of Leverett House, Richard T. Gill in The Harvard Class Album 1966.

Categories
Comparative Economic Systems Exam Questions Harvard Socialism Suggested Reading Syllabus

Harvard. Readings and Final Exam for Comparative Economic Systems. Bergson, 1968

Who among us has not tried to sneak a little wit into the formulation of a final exam question? Abram Bergson was a very serious scholar who, the record has shown, was not endowed with a funny bone in his body. Still, he was capable of calling a theoretical market socialist community, “Shangri-Lange” in the exam for his course on comparative economic systems. At least he gave it a try.  

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Miscellaneous Bergsonia

A photo of Abram Bergson when he was a teen-aged undergraduate at Johns Hopkins University.

1946-47 biographical note on Bergson who was a fellow of the Social Science Research Council.

Bergson’s reading assignments for his Columbia course Structure of the Soviet Economy in 1954-55.

Bergson’s reading lists and exams for “Normative Aspects of Economic Policy” at Harvard.   Spring term 1959; Spring term 1960.

Bergson’s Harvard reading list for Economics of Socialism, Spring term 1977.

Paul Samuelson’s memorial biography of Abram Bergson for the National Academy of Sciences in 2004.

For Bergson’s work in Soviet Economic Studies see John Hardt, “Abram Bergson’s Legacy: 1914-2003”.

___________________________

HARVARD UNIVERSITY
DEPARTMENT OF ECONOMICS

Economics 131
Comparative Economic Systems
Spring Term, 1967-68

Part I
INTRODUCTION

  1. Background
  2. The Theory of Socialist Economics

Paul A. Samuelson, Economics, 6th ed pp. 17-24. 620-631.

Robert Dorfman, The Price System. Englewood Cliffs, New Jersey. 1964, Ch. 6.

O. Lange, “On the Economic Theory of Socialism,” in B. Lippincott, ed., On the Economic Theory of Socialism, Minneapolis, 1938.

F. A. Hayek, Individualism and Economic Order, London, 1948, Ch. IX.

A. Bergson, Essays in Normative Economics, Cambridge, Mass., 1966, pp. 216-236.

Karl Marx, Critique of the Gotha Programme, International Publishers ed., New York, 1938, pp. 3-23.

W. N. Loucks, Comparative Economic Systems, 7th ed., New York, 1965, pp. 108-120 (5th ed., pp. 98-110; 6thed., pp. 93-105.

Part II
SOCIALIST PLANNING IN THE USSR

  1. Economics of the Industrial Enterprise

J. Berliner, “The Informal Organization of the Soviet Firm.” Quarterly Journal of Economics, August 1952; reprinted in F. Holzman, Readings on the Soviet Economy, Chicago, 1962.

A. Bergson, The Economics of Soviet Planning, New Haven, Conn., 1964, Ch. 5, and pp. 287-297.

  1. General Planning

R. W. Campbell, Soviet Economic Power, 1st ed., Cambridge, Mass., 1960, ch. 5.

A. Bergson, Economics of Soviet Planning, Chs. 1, 3, 7, 8, 13.

G. Grossman, “Scarce Capital and Soviet Doctrine,” Quarterly Journal of Economics, August 1953, reprinted in Holzman, Readings.

M. Bornstein, “The Soviet Price System,” The American Economic Review, March 1962; reprinted in M. Bornstein and D. Fusfeld. The Soviet Economy, Homewood, Ill., 1962.

A. Nove, The Soviet Economy, New York, 1961, ch. 3.

L. Smolinski, “What Next in Soviet Planning,” Foreign Affairs, July 1954

R. W. Campbell, “Marx, Kantorovich, and Novozhilov,” in Slavic Review, October 1961; reprinted in H. Shaffer, The Soviet Economy, New York, 1963.

M. Goldman, “Economic Controversy in the Soviet Union,” Foreign Affairs, April 1963; reprinted in M. Goldman, Comparative Economic Systems, New York, 1964.

A. Bergson. “The Current Soviet Planning Reforms,” in A. Balinky et al., Planning and the Market in the USSR, Rutgers, 1967.

Part III
EASTERN EUROPEAN VARIANTS

  1. Economic Reform in Poland and Czechoslovakia

S. Wellisz, The Economics of the Soviet Bloc, New York 1964. Chs. 2 and 6.

L. Smolinski, “Reforms in Poland,” Problems of Communism, July-August 1966.

J. M. Montias, “Economic Reform in Perspective,” Survey, April 1966.

  1. Market Socialism in Yugoslavia

J. M. Fleming and V. R. Sertic, “The Yugoslav Alternative,” International Monetary Fund Staff Papers, July 1962; reprinted in Goldman, Comparative Economic Systems.

E. Neuberger, “The Yugoslav Investment Auctions,” Quarterly Journal of Economics, February 1959.

A. Waterston, Planning in Yugoslavia, Baltimore, Md., 1962, pp. 50-82.

B. Ward, “The Nationalized Firm in Yugoslavia,” and comments on this by G. Macesich and H. G. Grubel, American Economic Review, May 1965, No. 2.

J. Vanek and J. M. Montias, “Planning in Yugoslavia,” in National Bureau of Economic Research, National Economic Planning, New York, 1967, pp. 379-381, 394-407.

Part IV
VARIETIES OF CAPITALIST EXPERIENCE

  1. The Laissez-Faire Ideal

Milton Friedman, Capitalism and Freedom, Chicago, 1962, omitting Ch. IV.

  1. The British Nationalized Enterprise

C. A. R. Crosland, “The Private and Public Corporation in Great Britain,” in E. S. Mason, The Corporation in Modern Society, Cambridge, Mass., 1959.

F. Cassell, “The Pricing Policies of the Nationalized Industries,” Lloyd’s Bank Review, October 1965; reprinted in A. H. Hanson, Nationalization: A Book of Readings, London, 1963.

  1. French Planning

Pierre Massé, “French Methods of Planning,” Journal of Industrial Economics, November 1962; reprinted in M. Bornstein, Comparative Economic Systems, Homewood. Ill., 1965.

Vera Lutz, French Planning, American Enterprise Institute, Washington, D.C., May 1965.

A. Schonfield, Modern Capitalism, New York, 1965, Ch. VIII.

  1. The Swedish Alternative

Alan G. Gruchy, Comparative Economic Systems, Boston 1966, pp. 357-375, 385-393, 395-416, 423-437.

Part V
COMPARATIVE PERFORMANCE

  1. Inequality

A. Bergson, Essays in Normative Economics, Ch. 8.

A. Bergson, The Economics of Soviet Planning, Ch. 6.

  1. Comparative Growth

A. Bergson, “Reliability and Usability of Soviet Statistics: A Summary Appraisal,” American Statistician, June-July 1953; reprinted in Holzman, Readings.

R. W. Campbell, Soviet Economic Power, 2nd ed., Boston, Mass., 1966, Ch. 6.

A. Maddison, “Soviet Economic Performance,” Banca Nazionale del Laboro Quarterly Review, March 1965.

M. Ernst, “Overstatement of Industrial Growth in Poland,” Quarterly Journal of Economics, November 1965.

Y. Vanek, “Yugoslav Economic Growth and Its Conditions,” and connents by N. Spulber, American Economic Review, May 1963, No. 2.

A. Bergson, “The Great Economic Race: USSR v. USA,” Challenge, March 1963, reprinted in Goldman, Comparative Economic Systems.

Janet Chapman, Real Wages in Soviet Russia Since 1928, Cambridge, Mass.,1963, Chs, IX and X.

  1. Economic Merit

A. Nove, The Soviet Economy, New York, 1961, Ch. 12.

A. Bergson, The Economics of Soviet Planning, Ch. 14.

O. Hoeffding, “State Planning and Forced Industrialization,” Problems of Communism, November-December 1959; re-printed in Holzman, Readings.

Jan Tinbergen, “Do Communist and Free Economies Show a Converging Pattern,” Soviet Studies, April 1961.

Peter Wiles, “Convergence: Possibility and Probability,” in Balinky et al., Planning and the Market in the USSR.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003, Box 9; Folder: “Economics, 1967-68”.

___________________________

HARVARD UNIVERSITY
Department of Economics

Economics 131: Professor Bergson
Final Examination
June 3, 1968

Part I (counts 25%)

Answer one and only one of two.

  1. In Marxiana, a socialist community, the economy is organized in accord with the Competitive Solution except in one particular: the Central Planning Board (CPB) seeks to apply the labor theory of value rather than western marginal theory. What operating rules might the CPB be expected to establish for the manager of an industrial enterprise? How might the managers’ behavior then differ from that under the unmodified Competitive Solution? What is implied for economic efficiency?
  2. In the socialist community of Shangri-Lange, the Competitive Solution is applied without qualification. Discuss the possible economic consequences of a government decision to increase defense spending. Consider in particular the consequences for each of the following:
    1. The government budget;
    2. The rate of interest;
    3. The general level of consumers’ goods prices;
    4. Economic efficiency.

Part II (counts 50%)

Answer two and only two of four.

  1. “As the Soviet experience shows, an interest rate is really not needed for investment project appraisal. So long as one selects the project that minimizes the cost of producing the desired output, there can be no economic waste, and this the Soviet project designers have sought to do from the very beginning of the Five Year Plans.” Discuss.
  2. “That Soviet planning is highly inefficient becomes self-evident when we consider one simple fact: the gross national product per employed worker in the USSR in 1960 was but 24-40 per cent of that in the United States in the same year.” Do you agree? Explain your answer carefully.
  3. “However much or little socialism and capitalism have converged generally, there can be no question that the Yugoslavs have by now practically reverted in all but name to a form of capitalism.” Discuss with special reference to Yugoslav enterprise management.
  4. “French planning surely has been an unqualified success. The record of French post-war growth is itself sufficient evidence of this.” Discuss.

Part III (counts 25%)

  1. Explain briefly four and only four out of seven items:
    1. “Safety factor”; “simulation”
    2. Indicative planning
    3. Milton Friedman on government policy toward “technical (natural) monopolies”
    4. “Occupational wage scale” in determination of Soviet wage differentials
    5. Dynamic versus static efficiency
    6. Average versus marginal cost pricing for coal under the British National Coal Board
    7. “Horizontal” and “Vertical” Modernization Commissions in French Planning.

NOTE: Please indicate on outside cover of your first bluebook the numbers of the questions that you answer

Source: Harvard University, Faculty of Arts and Sciences. Papers Printed for Final Examinations [in] History, History of Religions, Government, Economics, … ,Aerospace Studies, June 1968.

Categories
Harvard Public Finance Syllabus

Harvard. Syllabus of public lectures on taxation by Simon Newcomb. December 1879

 

The following outline of three lectures given by Simon Newcomb at Harvard in December 1879 was found in a grab-bag folder of undated course material from the department of economics. A quick plunge into the online newspaper archive newspapers.com was enough to find a public announcement of the lecture to nail down the date. 

One of the missions of Economics in the Rear-view Mirror, is to enter such obscure artifacts into the digital record. For fun I try to imagine Newcomb giving a TED talk…or a TikTok dance video.

__________________________

Simon Newcomb’s Methodenstreit with Richard Ely in 1884 has been transcribed and posted earlier.

Links to works by Simon Newcomb can be found at The History of Economic Thought website.

Newcomb’s 1909 obituary in The Times provides a snapshot of his life.

The biographical memoir written by W. W. Campbell for the National Academy of Sciences in 1916 is of course more complete.

__________________________

HARVARD UNIVERSITY.
Lectures on Taxation.

Professor SIMON NEWCOMB of Washington will give three lectures on Taxation in Sanders Theatre, on MONDAY, Dec. 8, WEDNESDAY, Dec. 10, and FRIDAY, Dec. 12, at 7 ½ P. M.

The public is invited.

AMORY T. GIBBS, Secretary

Dec. 1, 1879.

Source: Boston Evening Transcript, 2 December 1879, p. 5

__________________________

SYLLABUS OF
MR. NEWCOMB’S LECTURES ON TAXATION.

LECTURE I

The object of the course is the study of the comparative effects of different methods of raising revenue. This study is to be conducted in the same way as if the operation of natural causes alone were to be considered.

The object of taxation is the diversion of a portion of the industrial activity of the country from private to public objects.

The questions involved are not those of the absolute merits of different systems, but only their relative merits.

The expenditure of revenue is necessarily connected with the subject, because the effect of a tax depends as much upon how it is to be expended, as upon how it is to be collected.

Distribution of Indirect Taxes

Relative advantages of direct and indirect taxation.

Problem: To what extent can a tax levied on the activities of one person be transferred by him to others with whom he exchanges services?

Classification of Taxes: —

(1.) On persons.

(2.) On Production.

(3.) On accumulated wealth.

Each of these three divisions subdivided into two classes.

(α.) Taxes on totals of persons or things.

(β.) Taxes on selected persons or things.

Taxes in class (α) whether (1) poll taxes, (2) income taxes, (3) uniform property taxes, not directly transferable, but must be borne by the payers. Hence,

Class (α) includes taxes which are commonly considered direct;

Class (β) those which are indirect.

CASE I. The full amount of a tax can be added to the price of commodities when this addition causes no falling off in the demand. Digression on relations of price and demand, and the conditions on which they depend. Put,

P, the supposed price at which an untaxed commodity C, may be sold,

Q, the corresponding demand, or quantity sold at the price P in a unit of time.

ΔP, an increment of price, added on account of the tax.

ΔQ, the corresponding decrement in the quantity which can be sold,
so that at the price P + ΔP can be sold Q – ΔQ.

If ΔQ is small compared with ΔP, we may call the commodity C insensitive; if large, sensitive.

CASE II. When the demand is sensitive to a rise of price, one of two results must follow.

(α.) Production diminished till price is restored.

(β.) Price raised by only part of the tax, and the latter divided between producer and consumer. The result which must follow depends upon how far the production is monopolized.

LECTURE II.

Digression on natural monopolies with respect to the distribution of taxation under Case II. of the preceding lecture.

Tax upon gross production reducible to an income tax.

An income tax is the fairest of all, could it be fairly assessed and collected. But, in practice, the difficulty of defining aggregate income is such that this tax is most unfair.

The ultimate general effect of taxation upon industry is nearly the same on whatever articles the tax is levied. But on special classes of persons and industries the effect may be different.

In general, the person who cannot change his employment or the articles he consumes will be most affected.

In order that the equilibrium may be least disturbed, commodities which may be substituted for each other should be equally taxed.

Is there any transfer of a tax upon a commodity beyond the producer and consumer? Answer: Not in general. A tax on tobacco, for instance, is paid entirely by the consumer of tobacco.

Taxes on Accumulation.

A tax on capital would be equivalent to one on total production if adjusted, not to the capital itself, but to the income derivable from it. But our actual taxes on capital are enormously greater than if thus adjusted.

Can a property tax be transferred? The answer is dependent on the law of accumulation of capital. Ultimately the tax is paid by the community through a discouragement of saving and a consequent raising of the rate of interest.

LECTURE III.

Hints on Systems of Taxation.

Popular delusion that a tax should be capable of being evaded because those who are least able to pay can then escape. No large class of articles consumed exclusively by the poor.

(1.) The great point in which our systems of state taxation differ from those founded on Adam Smith’s first principle is that, in the latter, ability is measured by revenue, whereas we measure it by accumulated wealth.

(2.) Abroad, municipal taxes are paid by the tenants, and not by the owners. But, owing to our short leases, it is better among us that the owner pay.

(3.) Personal property should not be taxed for municipal purposes. Is right that, in levying state taxes, general ability to pay should be considered. But our attempt to collect a uniform percentage on all kinds of property from every one is a failure.

(4.) Objects of taxation should be sought for which indicate the wealth of the owner. There is no inherent necessity that taxes should be proportioned to value.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003. Box 10, Folder “Economics, undated (5 of 5)”.

Image Source: Simon Newcomb in Leading American Men of Science, David Starr Jordan, ed. New York: Henry Holt and Company, 1910. Page 363.

Categories
Exam Questions Microeconomics Princeton Suggested Reading Syllabus

Princeton. Value and Distribution Theory. Readings, Exams, Sample Questions. Baumol, 1976

This post adds William J. Baumol’s reading list and examination questions to the stock of core economic theory material transcribed and posted here at Economics in the Rear-view Mirror. For a contemporary comparison I include links to the four half-semester courses of microeconomic theory required of my cohort at M.I.T. a half-century ago. 

________________________

Cf. M.I.T. core microeconomic theory
1974-75

Bishop

Weitzman

Varian

Samuelson

________________________

Core graduate economic theory courses
Princeton, 1976-77

Fall Term
  1. Microeconomic Theory: Value and Distribution. Baumol (First class Sept. 14)
    M 10:40-12:10 and Tu 10:40-12:10 in Rm 5 WWS
  1. Macroeconomic Theory: Income Determination. Gersovitz.
    W 10:40-12:10 and F 10:40-12:10 in Rm 5 WWS
Spring Term
  1. Microeconomic Theory: General Equilibrium. G. Faulhaber
    Tu 10:40-12:10 and Tu 1:00-2:30
  2. Macroeconomic Theory: Inflation and Growth. D. Jaffee.
    M 10:40-12:10 and F 10:40-12:10

________________________

PRINCETON UNIVERSITY
Department of Economics

ECONOMICS 501
Microeconomic Theory:
Value and Distribution

Fall Term 1976

Professor W. J. Baumol

*On Reserve

MAIN REFERENCES

Henderson, J. M. and Quandt, R. E., Microeconomic Theory, New York: McGraw-Hill, 1958.

Baumol, W. J., Economic Theory and Operations Analysis, Englewood Cliffs: Prentice-Hall, 1965. (ETOA)

  1. Theories of Consumption and Demand

Henderson and Quandt, Chapter 2, Sections 1 through 8.

*Hicks, J. A., Value and Capital; 2nd Ed., New York: Oxford University Press,
1946, Chapters I, II, III, and pp. 302-314.

*_______, A Revision of Demand Theory, Oxford: Clarendon Press, 1956, Chs. VII-IX.

*_______, Malinvaud, E., Lectures on Microeconomic Theory, Amsterdam: North Holland Press, 1972, Chapter 2.

ETOA, Chapters 9 and 10.

*Linder, S. B., The Harried Leisure Class, New York: Columbia University Press, 1970, Chapter VII and pp. 150-2.

  1. Neumann-Morgenstern Utility Theory.

Henderson and Quandt, Chapter 2, Section 9.

ETOA, Chapter 22.

  1. Theory of Cost and Production

*Viner, Jacob, “Cost Curves and Supply Curves,” in Stigler, G. J. and K.E. Boulding, Readings in Price Theory, Chicago: Irwin, 1952, pp. 198-232.

ETOA, Chapters 11, 12 and pp. 402-405.

Henderson and Quandt, Chapter 3.

Malinvaud, Chapter 3.

  1. Market Structure and Market Behavior

*Chamberlin, E. H., The Theory of Monopolistic Competition, 5th ed. (or later). Cambridge:
 Harvard University Press, 1942, Chapters III, IV, and V.

*Sweezy, P.M., “Demand Under Conditions of Oligopoly,” in Stigler, G. J. and K. E. Boulding, eds., Readings in Price Theory, Chicago: Irwin, 1952, pp. 404-409.

*Robinson, J., The Economics of Imperfect Competition, Chapters 2, 3, 6, 7. 11. 15. 16, and 18.

ETOA, Chapter 14.

Baumol, W. J., Business Behavior, Value and Growth, rev. ed., New York: Harcourt, Brace and World, 1967, Chapters 3, 6, 7, 8, and 10.

  1. Elements of Distribution Theory

ETOA, Chapters 17, 18, 19.

*Robinson, Joan, “Capital Theory up to Date,” Canadian Journal of Economics, Vol. 3, 1970, pp. 309-17.

*Kaldor, Nicholas, “Alternative Theories of Distribution,” Review of Economic Studies, Vol. 23, No. 2, 1955-6, pp. 83-100.

*Samuelson, P. A., “Parable and Realism in Capital Theory: The Surrogate Production Function,” Review of Economic Studies, Vol. 39, 1962, pp. 193-206.

*_______, “A Summing Up,” Quarterly Journal of Economics, Vol. 80, 1966, pp. 568-83.

*Baumol, W., “The Transformation of Values: What Marx ‘Really’ Meant,” Journal of Economic Literature,Vol. 12, pp. 51-62.

  1. Introduction to Welfare Theory

Henderson and Quandt, Chapter 7.

ETOA, Chapter 16.

Malinvaud, Chapters 4 and 9.

________________________

Economics 501

Fall Semester, 1976

Midterm Examination

    1. Define a quasi-concave utility function.
    2. Explain why the assumption of quasi-concavity is acceptable for ordinal utility analysis while concavity is not.
    3. State and prove any theorem about quasi-concave functions.
  1. Explain in economic terms the meaning of the result that an expenditure function is concave in prices and indicate why it is plausible.
    1. Formulate precisely a definition of economies of scale for a firm producing n outputs y1, … , yn and
      using m inputs r1, … , rm.
    2. Explain why it is difficult to define the concept of declining average cost for such a firm.

________________________

Economics 501

Fall Semester, 1976

Final Examination

  1. Explain only one of the following:
    1. The reason microeconomic analysis uses demand curves all of whose points refer to the same period of time.
    2. The rationale of the total differentiation step in comparative statics method.
  2. The price elasticity of a straight line supply curve through the origin is __________. Give a proof of your answer.
  3. Using Shepherd’s lemma and whatever other theorems you need about expenditure functions, give a brief proof of the Slutsky theorem.
  4. Suppose wheat is produced on three parcels of land, A, B and C, and let there be fixed coefficients in the production function so that each parcel can produce exactly 100 bushels. Let the cost of producing 100 bushels on parcel A be $3, on parcel B be $5 and on C be $9. Construct a table showing average and marginal costs with and without rent for three different levels of total output.
  5. In words, explain briefly the economic rationale of the complementary slackness conditions uivi = 0 and yjlj =0. That is, why would we expect them to hold in an optimal production program?
  6. A farmer expects to harvest m bushels of wheat in August and m in September. He will sell x1 in August and x2 in September. The price in August is p1 per bushel and in September it is p2. He can also store wheat from August to September at a cost of w per bushel.
    1. Assuming that the farmer wishes to maximize his profits and that p1, p2 and m are all positive, construct the appropriate model and prove that

x2m

p2 = v2 (where v2 is the second dual variable)

x1 = m if p1 > p2w

x1 < m if p1p2w.

    1. In one sentence each, give an economic interpretation of the four results.

________________________

Economics 501
Sample Exercises
[Undated]

    1. Explain the term comparative statics.
    2. In outline, briefly describe in words the steps of the mathematical method used to derive a comparative statics theorem indicating in each case the purpose of the step.
    3. State (do not prove) one such theorem.
    1. What is the basic premise of revealed preference theory?
    2. Use that premise to derive the Slutsky theorem diagrammatically stating explicitly where the premise enters your proof.
  1. Define:
    1. identification
    2. saddle point
    3. gross and net complements
    4. law of diminishing returns
    5. substitution effect
    6. Walras’ law
    7. lexicographical ordering.
  2. Prove that for a straight line demand curve the midpoint between its two intercepts is of unit elasticity.
  3. Draw indifference maps showing equilibrium of the consumer’s demand in each of the following cases:
    1. One of the two commodities is a diamond-studded bow tie. Our consumer doesn’t buy any.
    2. Our consumer is given a fixed amount of money to spend either on his stamp or his coin collection. He decides it is better to end up with a one-good collection rather than two mediocre ones, and spends all the money on stamps.
    3. The price of shoelaces is lowered, but the consumer buys no more laces than he did at the old price.
    1. Given a nonlinear demand curve, illustrate graphically how the corresponding marginal revenue curve can be constructed (no verbal explanation necessary).
    2. Give a rigorous proof of the validity of your construction procedure in a.
    1. Define the substitution effect on x of a change in the price of x.
    2. Prove the Slutsky Theorem about the sign of the substitution effect.
    1. Define quasi concavity.
    2. Use the definition to prove one of the following:
      1. The indifference curves corresponding to a strictly quasi concave utility function can have no linear segment.
      2. A consumer with a strictly quasi concave utility function who purchases in a competitive market can have at most one optimum.
    1. Define: corner maximum, local maximum, interior maximum.
    2. Explain the relevance of each of these for the useability of the standard tools of marginal analysis.
    3. Relate each of these to the usual second order maximum conditions.
    1. Show how from the shape of the offer curve one can determine the elasticity of the corresponding demand curve.
    2. Discuss the statistical problems involved in the empirical estimation of the demand curve as defined in economic theory.
    3. What is the identification problem?
  4. A perfectly competitive firm wishes to maximize its total profits

T = pq – c1 x1 – c2x2

subject to the production function constraint

q = f(x1, x2)

where q is the output quantity, x1 and x2 are the two input quantities, and p, c1 and c2  are the (fixed) input and output prices.
Assume now that c1, the price of the first input, changes. Use the comparative statics methods to show that dx1/dc1 < 0. Why is there in this case no income effect, only a substitution effect?

  1. The elasticity of a straight line supply curve through the origin is ______________. Prove your answer.

Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library. Economists’ Papers Archive. William J. Baumol Papers, Box 20. Folder “Economics 506: History of Economic Thought (syllabi, book orders, library mtls. etc. 1968-1990” [Note: this folder has items such as transcribed here and not only materials for Economics 506].

Categories
Exam Questions Harvard Public Utilities

Harvard. Final Exam for a new course on Municipal Ownership and Control in Europe and Australia. Holcombe, 1909-1910

Arthur Norman Holcombe (1884-1977) was awarded a Ph.D. in economics at Harvard in 1909. In the Preface to his doctoral thesis he thanked “Professor Gustav Schmoller of Berlin, Professor Lujo Brentano of Munich, and above all Professor F. W. Taussig of Harvard.” 

Thesis title: Public ownership of telephones on the continent of Europe. Boston, etc., Houghton, Mifflin, 1911, 8°. pp. xx, 482 (Harv. Econ. Stud., 6).

Biographical/Historical Note

Arthur Norman Holcombe was born in Winchester, Massachusetts, on November 3, 1884. He graduated from Harvard with an AB in 1906, and a Ph.D. in 1909. On August 30, 1910, he married Carolyn H. Crossett; they had five children. In 1964, he married Hadassah Moore Leeds Parrot. Holcombe split his career between public service and teaching. He was credited with establishing political philosophy and theory as basic disciplines in Harvard’s government curriculum. Among his students were Henry A. Kissinger and Henry Cabot Lodge. In 1949, he assisted Chiang Kai Shek in the drafting of a constitution for the Republic of China. In 1955, he retired as Eaton Professor of the Sciences of Government to become chairman of the Committee to Study the Organization of Peace, an affiliate of the American Association for the United Nations. He died on December 9, 1977.

Source: John F. Kennedy Presidential Library. Arthur N. Holcombe Personal Papers. Guide to the papers.

________________________

Course Announcement
1909-10

[Economics] 24 2hf. Problems of Municipal Ownership and Control in Europe and Australia. Half-course (second half-year). Mon., Wed., and (at the pleasure of the instructor) Fri., at 9. Dr. Holcombe.

The purpose of this course is to study the policy in leading countries of Europe in regard to so-called municipal monopolies, such as water, gas, electric lighting works, and street railways. A description of the historical development and of the present situation of such municipal undertakings is followed by a comparison with the results of private enterprise where such comparison is possible. An examination is made of the attitude of the municipality towards private franchise seekers and franchise holders, and towards its own employees when it undertakes the management of municipal enterprises. In conclusion, there is discussed the question of municipal ownership in relation to that of state ownership and of “municipal socialism” with regard to socialism in general. The work of the course includes the writing of one thesis and assigned reading in the English, French, and German literature of the subject.

Source: Official Register of Harvard University, Vol. VI, No. 29 (23 July 1909). History and Political Science Comprising the Departments of History and Government, and Economics, 1909-10, pp. 60-61.

________________________

Course Enrollment
1909-10

Economics 24. 2hf. Dr. Holcombe. — Problems of Municipal Ownership and Control in Europe and Australia.

Total 34: 4 Seniors, 21 Juniors, 5 Sophomores, 1 Freshman, 3 Others.

Source: Harvard University. Report of the President of Harvard College, 1909-1910, p. 45.

________________________

ECONOMICS 24
Year-end Examination, 1909-10

  1. Discus the following quotations from authors read in the course:—
    1. “We have more street railway facilities, electric lighting facilities, and telephonic facilities than have our British cousins; and we make more use of our ample facilities than our British cousins make of their restricted facilities. This shows that the prices charged to us by our companies under the stimulus of an enlightened self-interest are better adapted to our purses, than are the prices charged to our British cousins by their city fathers.”
      [Hugo Richard Meyer, Municipal Ownership in Great Britain (1906), p. 331]
    2. “Thus while the development of electric light and power was delayed in Great Britain, the public has been the gainer by reason of the fact. Not only has the country been saved the costly experimentation that America and Germany are even now paying for, but by the time the industry was an accepted success the cities were convinced that it was an undertaking that should not be left in private hands.”
      [Frederic Clemson Howe, The British City, The Beginnings of Democracy (1907), p. 114]
    3. “There are no particular reasons why the financial results from private or public operation should be different if the conditions are the same. In each case it is a question of the proper man in charge of the business and of local conditions.”
      [Report to the National Civic Federation, Commission on Public Ownership and Operation, (3 vols, 1907). Part I, Vol. I, General Conclusions and Reports, p. 23]
    4. “The wage worker who reads the labor report cannot but perceive that municipalization in various ways carries peril to the trade union.”
      [J. W. Sullivan, Municipal and Private Operation of Public Utilities, Relative to the Laobr Report of the National Civic Federation, Commission on Public Ownership and Operation, (1908), p. 70]
    5. “I take it that the key to the whole question of municipal or private ownership is the question of politics.”
      [John R. Commons, “Labor and Politics” in Report to the National Civic Federation, Commission on Public Ownership and Operation, (3 vols, 1907). Part I, Vol. I, General Conclusions and Reports, p. 89 ff.]
  2. What is the place of the municipality in the execution of the policy of a “national minimum,” as set forth by Sydney Webb? Compare this program with the municipal program of the German Social-Democracy.
  3. Compare the power and the practice, with respect to the regulation of the prices of gas and electricity, of the British Board of Trade, the Massachusetts Board of Gas and Electric Lighting Commissioners, and the Wisconsin Public Utilities Commission.
  4. What is an indeterminate franchise? What are the conditions essential to its satisfactory operation?
  5. Discuss N. P. Gilman’s “case for legal regulation of industrial disputes in monopolistic industries,” in its bearings on the situation in the so-called public service industries, whether under private or public ownership.
    [Nicholas Paine Gilman, Methods of Industrial Peace (1904), Chapter 15, “The Case for Legal Regulation”, pp. 401-408.]

Source: Harvard University Archives. Harvard University, Examination Papers, 1873-1915. Box 9, Bound vol. Examination Papers 1910-11; Papers Set for Final Examinations in History, Government, Economics,…,Music in Harvard College (June, 1910), pp. 54-55.

Categories
Business Exam Questions Johns Hopkins Undergraduate

Johns Hopkins. Department of Political Economy Exams, 1931-32

The United States was descending towards the trough of the Great Depression during the last full academic year that occurred under the Hoover Administration. This post takes us to the undergraduate and business course offerings in economics at Johns Hopkins University for 1931-32. The mid-year and year-end examinations for all courses have been transcribed along with short course descriptions. Two minor gaps have been filled with examinations from an adjacent years.

A later post will provide a list of the graduate course offerings from the department of political economy for 1931-32.

__________________________ 

Cf. Economics Exams from 1937-38
(Previously Posted)

Johns Hopkins. Exams for the five sections of principles of economics, 1937-1938

Johns Hopkins. Semester exams for statistics. Robert G. Deupree, 1937-1938

Johns Hopkins. Final exams for undergraduate money and banking. Weyforth, 1937-1938

Johns Hopkins. Final examinations for Corporation Finance and Investments. Evans, 1937-1938

Johns Hopkins. Exam questions for undergraduate principles of accounting. Cooper, 1937-1938

Johns Hopkins. Exam questions for undergraduate economic history. Broadus Mitchell, 1937-1938

Johns Hopkins. Exam questions for mathematics of finance and applied statistics. Evans, 1937-1938

Johns Hopkins. Examination questions for undergraduate marketing. Roy J. Bullock, 1937-1938.

__________________________ 

1931-32

1-C. Elements of Economics.

The course is meant to be an introduction to further economic study, and so does not embrace detailed scrutiny of certain aspects of economic life which are fully presented in more advanced courses. The structure of economic society is given, especially through study of the theories of production and distribution. Attention is paid to those subjects which have importance for those intending to engage in business enterprise.

Three hours weekly, through the year. Section 1: Dr. EVANS, Thurs., Fri., Sat., 8.30, Maryland Hall 110; Section 2: Associate Professor MITCHELL, Mon., Tues., Wed., 8.30, Gilman Hall 313; Section 3: Associate Professor WEYFORTH, Mon., Tues., Wed., 11.30, Gilman Hall 314.

  • GEORGE HEBERTON EVANS, JR., Ph.D., Associate in Political Economy. A.B., Johns Hopkins University, 1920; Ph.D., 1925.
  • BROADUS MITCHELL, Ph.D., Associate Professor of Political Economy. A.B., University of South Carolina, 1913; Fellow, Johns Hopkins University, 1916-17, and Ph.D., 1918.
  • WILLIAM OSWALD WEYFORTH, Ph.D., Associate Professor of Political Economy. A.B., Johns Hopkins University, 1912, and Ph.D., 1915; Instructor, Western Reserve University, 1915-17.
THE JOHNS HOPKINS UNIVERSITY
Mid Year Examination
POLITICAL ECONOMY 1-C

Dr. Mitchell

Tuesday, January 26, 1932

  1. Explain briefly the following terms: (a) the factors of production; (b) luxury; (c) elasticity of demand; (d) wealth.
  2. What is the function of the enterpriser? Is the enterpriser gaining or losing in importance as an economic agent?
  3. Define capital and discuss the capitalistic method of production.
  4. Distinguish between subjective and objective value.
  5. Explain the law of diminishing utility. What is meant by marginal utility?
  6. Explain how market price is determined under conditions of competition.
  7. What indictments of the capitalist system are offered by the present business depression?
  8. What is the cause and cure of “technological” unemployment?
  9. What do you think of the proposal to set up a National Economic Council with purely advisory powers?
THE JOHNS HOPKINS UNIVERSITY
Final Examination
POLITICAL ECONOMY 1-C

Dr. Mitchell

June 1, 1932

  1. Explain the “quantity theory of money”.
  2. (a) What is meant by “economic rent”? (b) Explain the proposal of the Single Tax. (c) Can a tax on land be shifted from owner to occupier; give reason for your answer.
  3. (a) Explain the subsistence theory of wages, the socialist theory of wages, and the productivity theory of wages. (b) Should wages keep pace with the cost of living, and nothing more?
  4. Discuss as many theories of interest as you can, indicating the one which to you seems most reasonable.
  5. (a) How do “pure profits” arise? (b) Is the function of the enterpriser undergoing change? (c) What are some of the means of avoiding economic risk?
  6. If you were made responsible for economic planning in the United States, what powers would you assume and what policies would you formulate?

 

THE JOHNS HOPKINS UNIVERSITY
Mid Year Examination
POLITICAL ECONOMY 1-C

Dr. Evans

Wednesday, January 27, 1932.

  1. Discuss economic method.
  2. Comment upon the beginnings of political economy.
  3. Give three of the principles of production discussed in class.
  4. Why did most of the countries of the world adopt the gold standard?
  5. Discuss the causes which led to the abandonment of the gold standard by Great Britain in September 1931.
  6. Give a seeming exception to the law of diminishing utility and explain carefully why your illustration is not an exception.
  7. Illustrate the method for calculating the cost of living.
  8. Discuss the equation of exchange.
  9. List the advantages and disadvantages of the national banking system.
  10. Use diagrams to show the relation between cost of production and price.
  11. Discuss monopolies which arise because of properties inherent in the business.
  12. Give three laws of supply and demand.
  13. When is it economically justifiable to take wealth from some people in order to give it to others?
THE JOHNS HOPKINS UNIVERSITY
Final Examination
POLITICAL ECONOMY 1-C

Dr. Evans

June 1, 1932

  1. “The corporation affords opportunity for dividing and recombining the incidents of ownership in varying proportions.” Explain and illustrate.
  2. “An increase in the rediscount rate of a Federal Reserve Bank is expected to cause member banks to raise their discount rates.” Upon what assumption does this expectation rest?
  3. Discuss the expansion of public works as a method of increasing demand during the period of depression.
  4. “Inflation of the currency by governmental action is a form of taxation.” Explain. Who pays the tax? How is it possible for individuals partly to evade the tax?
  5. “Even if the velocity of circulation remains constant, an increase in the quantity of money need not necessarily raise prices.” Discuss.
  6. Is it not reasonable to suppose that most wage earners would be willing, if necessary, to work for less than they are now paid? If they would be willing to work for less, why do employers continue to pay the present wage rates?
  7. Distinguish between technological capital and loanable funds. For the use of which is interest paid? How are they related?
  8. “More completely than any other form of income, profits defy explanation by general rules.” Do you agree? Why or why not?
  9. “American foreign trade is the greatest unprotected industry that we have. It furnishes an output of between $4,000,000,000 and $5,000,000,000 annually — the total of our sales to foreign countries — and is thus the greatest, as well as almost the only, unprotected business in the United States.” Discuss the effect of the tariff upon our exporting industries.
  10. Enumerate as many sound principles of political economy as possible. Do not, however, use more than one sheet of paper and devote only one line to each principle.
Political Economy 1-C (Dr. Weyforth)
Note Mid-year Exam 1931-32 missing
1930-31 exam substituted here
THE JOHNS HOPKINS UNIVERSITY
Mid-Year Examination Political Economy 1
(Dr. Weyforth)

Monday — February 2, 1931 — 9 a.m.

  1. The following are mentioned by Ely as a few of the fundamental institutions of our present economic system: private enterprise, private property, contract, freedom, competition. Comment upon these institutions so as to show their significance in our present economic system.
  2. Distinguish between wealth and welfare. Does the growth of a country in wealth necessarily mean a commensurate increase in its welfare? Explain.
    That is meant by the “standard of living”? Does the normal growth of population menace the maintenance of standards of living? Why? How do you account for the fact that standards of living have risen during the past century in spite of large increases in population?
  3. Define “diminishing utility” and “marginal utility”. What is the relationship between marginal utility and price? Explain fully.
  4. “Market price constantly tends to approach the normal price, which is defined as the expense of producing a unit of the commodity in question.” Explain this statement. That is meant by the “marginal producers”? Define and illustrate the terms “increasing cost,” “decreasing cost,” and “constant cost” as applied to different types of industry.
  5. If it takes two years to build a steel mill, will this have a bearing upon the value of steel mills in the event of a sudden increase in the demand for steel as in the case of the outbreak of a war? That difference would it make, if it took only two months to construct a mill? Explain.
  6. What are the functions of money in our economic system? What is the gold standard? That are its advantages and disadvantages? what other monetary standards can you suggest?
  7. What is the nature of a bank deposit? How do the demand deposits of commercial banks serve as a medium of exchange? What are the principal functions of commercial banks?
THE JOHNS HOPKINS UNIVERSITY
Final Examination
POLITICAL ECONOMY 1-C

Dr. Weyforth

June 1, 1932

ANSWER ANY 8 QUESTIONS

  1. Construct demand and supply schedules for some commodity and indicate how price tends to be fixed. Explain the difference between elastic and inelastic demand.
  2. “Once goods have been produced, the only thing to do with them is to sell them for the best price which can be obtained, whether this price be above or below the cost of production. Hence it is ridiculous to assert that cost of production determines price.” Discuss this statement showing the true connection between price and cost of production.
  3. What is meant by the business cycle? What are some of the economic causes of the business cycle? Explain.
  4. How are changes in the general level of prices calculated? Explain the relationship between the quantity of money and the general level of prices.
  5. Explain the marginal productivity theory of wages. Why is it that persons doing disagreeable work do not always receive higher wages than those doing pleasant work?
  6. What are the factors affecting the supply of and the demand for loanable funds?
  7. How do profits affect the distribution of productive activity? Discuss the importance of profits as a stimulus to managerial efficiency.
  8. Explain the Ricardian theory of rent.
  9. “Tariff protection is a deliberate interference with economic specialization in all of its various aspects. This is its fundamental and fatal weakness.”
    Appraise this statement carefully.

__________________________

2-C. Statistics. Dr. EVANS.

[GEORGE HEBERTON EVANS, JR., PH.D., Associate in Political Economy. A.B., Johns Hopkins University, 1920; Ph.D., 1925.]

The first half of the course will be devoted to a brief history of statistics as a science, followed by an examination of the methods for collecting, presenting and analyzing statistical data. In order that the student may more clearly understand statistical method, practical exercises are assigned to supplement the class room work.

During the second half year the use of statistics in the analysis of economic and business problems is considered. Various index numbers, such as those measuring wholesale prices, retail prices, cost of living, wages and production will be studied. Special attention will be given to the business cycle and the various statistical aids that have been developed for forecasting business conditions. Students will be referred to assignments in publications so that they may become familiar with the principal sources of statistical information concerning economic and business problems.

Prerequisite: Mathematics 2-C or 3-C.

Three hours weekly through the year. Dr. EVANS. Wed., Fri., Sat., 10.30. Gilman Hall 314.

THE JOHNS HOPKINS UNIVERSITY
Mid Year Examination
POLITICAL ECONOMY 2-C

February 2, 1932

  1. Put the following data into a frequency table. Give evidence which tends to show that you have made a proper selection of both the size and the position of your class-interval.

10, 11, 13, 15, 17, 17, 20, 21, 22, 22, 23, 23, 23, 24, 25, 27, 30, 35, 36, 40.

  1. Show that a railroad with three divisions might have a lower cost per ton-mile in July than in June on every division, and yet have a higher cost per ton-mile for the railroad as a whole. Discuss.
  2. The following table shows the number of associate professors at certain American colleges and universities, whose salaries fell in the classes indicated. Note the modal salary class, and find the median salary. In your judgment, which average is most typical?
Salary Class
(by mid-point)
Number Salary Class
(by mid-point)
Number
250 1 2250 168
500 3 2500 174
750 3 2750 129
1000 4 3000 153
1250 15 3250 74
1500 57 3500 91
1750 88 3750 17
2000 186 4000 15
4500 1
  1. Discuss the mathematical expressions which indicate dispersion. Which would you use to show the dispersion of the data given in problem 3?
  2. If an arithmetic mean were to be calculated for the data given in problem 3, should a weighted or unweighted average be calculated? Discuss.
  3. How may a frequency distribution be described?
  4. Discuss very briefly: random, sampling; questionnaires; the substitutes for renumeration; the ratio chart.
THE JOHNS HOPKINS UNIVERSITY
Final Examination
POLITICAL ECONOMY 2-C

June 7, 1932

  1. An effort was made to determine the average weekly wage of 20,000 coal miners by taking a sample consisting of 256 workers, The arithmetic mean computed from this sample was $40 with a standard deviation of $2.40. What is the reliability of this result?
  2. What is moving correlation? When and why should it be used?
  3. Discuss three variable correlations.
  4. The U. S. Bureau of Labor publishes currently an index of the cost of living. The base is 1926. Using some hypothetical figures, show how the base may be shifted to another year. Can the process employed by you always be used? Why or why not?
  5. Explain “mathematical methods of trend fitting are not fool-proof”. State the steps in the computation of a straight-line arithmetic trend by the method of least squares.
  6. Obtain an index of seasonal variation for the following data:
Quarter 1924 1925 1926 1927 1928 1929 1930
First 1.5 2.0 2.0 2.5 2.5 3.0 2.5
Second 2.5 2.5 2.0 2.0 1.5 3.5 4.0
Third 2.0 2.5 2.0 2.5 3.0 2.5 3.0
Fourth 2.5 3.0 3.5 3.5 3.0 3.5 3.0

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3-B. Money and Banking.
Associate Professor WEYFORTH.

[WILLIAM OSWALD WEYFORTH, Ph.D., Associate Professor of Political Economy. A.B., Johns Hopkins University, 1912, and Ph.D., 1915; Instructor, Western Reserve University, 1915-17.]

In this course an analysis of the functions of money, credit and banking in our modern economic life will be made. There will be a description of various types of monetary systems, of the forms of credit and of banking and financial institutions. Particular attention will be given to the relationship between money, bank credit and prices; to the effects of price fluctuations upon individuals and upon general business conditions; to the problems of stabilizing prices and controlling business fluctuations by means of a deliberately directed monetary and credit policy. The Federal Reserve System will be studied with special emphasis upon its problem of credit control. Some time will also be devoted to the relationship between the money market and the stock market, to the problem of brokers’ loans, and to the financial operations involved in our international trade.

Prerequisites: Political Economy 1-C and 2-C.

Three hours weekly through the year. Associate Professor WEYFORTH.

Mon.. Tues., Wed., 9.30. Gilman Hall 311.

THE JOHNS HOPKINS UNIVERSITY
Mid Year Examination
POLITICAL ECONOMY 3-B

January 29, 1932

  1. What is the gold standard? What are its advantages and disadvantages? Explain the difference between the gold standard as found in the United States and as found in England after 1925.
    Explain how the recent abandonment of the gold standard by England is likely to affect her foreign trade.
  2. Explain how prices in one gold standard country are related to prices in other gold standard countries. Explain the effects of movements of gold from one country to another upon the price levels of the respective countries. In what ways may the central banks of the respective countries offset the effects of the movement of gold? What are the limitations upon the power of the central banks in this respect?
  3. What is bimetallism? Outline the history of bimetallism in the United States. What factors are responsible for the recent revival of interest in bimetallism?
  4. Define and illustrate the more important types of commercial credit instruments. Explain the nature and importance of negotiability. Describe in detail how a bank acceptance may be used to finance a shipment of copper from Brazil to New York.
  5. What are the economic effect of fluctuations in the general level of prices? How are such fluctuations measured? Explain the causes of such fluctuations.
  6. What are the functions performed by investment bankers? What is their importance in our economic organization? Describe at least two types of underwriting operations。
  7. What are the various types of investment trusts? Explain the differences in their methods of operation. What are the legitimate functions? What unsound practices developed during the boom preceding the crash of 1929?
  8. Explain a margin purchase and a short sale on the New York stock exchange.
THE JOHNS HOPKINS UNIVERSITY
Final Examination
POLITICAL ECONOMY 3-B

Dr. Weyforth

June 3, 1932

  1. What are the factors affecting the rates of exchange between two gold standard currencies? Show under what conditions gold tends to move.
  2. What is the theory of the international distribution of gold among gold standard nations? Show how this theory may be affected by the policy of central banks.
  3. What are the factors determining the rate of exchange between two countries, one or both of which have a paper standard? How is equilibrium in the balance of payments maintained under such conditions?
  4. Describe the principal types of loans made by commercial banks. What are the principles that should govern commercial banks in their lending? What have been the developments in the lending policy of commercial banks since the War.
  5. The Goldsborough Bill would make it the duty of the Federal Reserve Banks to restore commodity prices as represented by the index number of the U. S. Bureau of Labor Statistics to the average level existing between 1921 and 1929, and to maintain prices at that level. What has been the attitude of the Federal Reserve officials toward this bill? Explain fully.
  6. What possible principles may guide a central bank in its credit policy? Explain the difficulties that have confronted the Federal Reserve officials since the War.

__________________________

4-B. Labor Problems.
Professor BARNETT.
(Course 4B will not be given in 1931-32.)

[GEORGE ERNEST BARNETT, Ph.D., Professor of Statistics. A.B., Randolph-Macon College, 1891; Fellow, Johns Hopkins University, 1899-1900, and Ph.D., 1901.]

Three hours weekly through the year. Mon., Tues., Wed., 10.30. Gilman Hall 314.

In the first part of this course the problems growing out of modern industrial employment will be studied, e.g., child labor, industrial accidents, unemployment. It includes a critical discussion of the ameliorative measures which have been adopted in the leading industrial countries. Special attention will be given to an analysis of the principles underlying the schemes of social insurance against sickness, old age, and unemployment, so generally put into effect in recent years in European countries. In the second part of the course the history, structure and functions of American trade unionism are considered. Particular attention will be given to the working of representative systems of collective bargaining and an analysis of the conditions under which these systems have attained their greatest strength. An appraisal of rival forms of wage fixation, such as individual bargaining, governmental intervention and shop committees will conclude the course.

Prerequisites: Political Economy 1-C and 12-B.

THE JOHNS HOPKINS UNIVERSITY
Political Economy 4-B
Mid-year Examination

January 30, 1933

  1. On what principles, should an economic man divide his income between expenditure and saving?
  2. On what principles, should he divide his expenditure among different objects of expenditure?
  3. How and why should he divide his savings between investment and insurance?
  4. Describe briefly the various causes of unemployment.
  5. Discuss the effects of shortening the hours of labor.
  6. Why are the risks of unemployment, old age, etc. a part of the labor problem?
THE JOHNS HOPKINS UNIVERSITY
Final Examination
POLITICAL ECONOMY 4-B

May 29, 1933

  1. Define “trade union” and distinguish trade unions from such associations as medical societies, bar associations.
  2. Describe the relations among the various units (local unions, national unions, etc.) making up the structure of American trade unionism.
  3. Classify and discuss the methods of enforcement used by trade unions against employers.
  4. Discuss “picketing”.
  5. What is the object of trade unions to the injunction?
  6. What is “scientific management” and how has it influenced the employer in his attitude toward labor?
  7. Outline the chief lines of approach to the governmental adjustment of industrial disputes.
  8. Is the labor market a good market?

__________________________

6-B. Corporation Finance and Investments.

[GEORGE ERNEST BARNETT, Ph.D., Professor of Statistics. A.B., Randolph-Macon College, 1891; Fellow, Johns Hopkins University, 1899-1900, and Ph.D., 1901.]

In the first part of this course the theory and practice of corporation finance will be considered with particular reference to the problems presented in the United States. The more important topics taken up include: advantages and disadvantages of corporate organization; classification and examination of the characteristics of stocks and bonds; the choice of different types of securities to be issued; methods by which these securities are floated; the methods and forms of syndicate underwriting; policy with reference to dividends and surplus; refunding of debt and provisions for amortization; receivership and reorganization. The second part of the course will be devoted to the study of investments. The more important topics covered in this course include: an analysis of the essentials of a good investment; an historical study of the rate of interest and of periodic fluctuations in the rate; definition of the essential legal characteristics of the various debt instruments and especially of the mortgage; historical and analytical description of the more important forms of investment, such as Government, State and municipal bonds, securities of private corporations, and real estate mortgages; theories of valuation and amortization.

Prerequisites: Political Economy 1-C, 2-C and 11-B.

Three hours weekly through the year. Professor BARNETT. Mon., Tues., Wed., 10.30. Gilman Hall 313.

THE JOHNS HOPKINS UNIVERSITY
Mid Year Examination
POLITICAL ECONOMY 6-B

Monday, January 25, 1932.

  1. Discuss the relative advantages of the partnership and the corporation as legal forms of the business unit.
  2. Why has no-par common stock largely replaced common stock with a par value?
  3. A corporation was liquidated. After the creditors were paid there were assets to the amount of $200,000. The capital stock consisted of $200,000 common and $100,000 preferred. How much would a common stockholder receive?
  4. When should a corporation pay a cash dividend?
  5. What is a bond? Define the various classes of bonds.
  6. The bonds of X. R.R. are convertible into common at 80. A buys $10,000 of the bonds at 120. At what price for the common would conversion be profitable?
  7. A syndicate was formed to acquire and sell $10,000,000 of 6 per cent bonds. A selling commission of one per cent was allowed. The bonds were bought at 97 and sold at 100. Smith and Jones subscribed to $100,000 and sold $50,000. All the bonds were sold. Disregarding the expenses of the sale, except the commission, how much were Smith and Jones entitled to receive from the syndicate managers.
THE JOHNS HOPKINS UNIVERSITY
Final Examination
POLITICAL ECONOMY 6-B

May 31, 1932

  1. Define “pure rate of interest” and outline the movement of this rate from 1897 to date. What is the explanation of these changes?
  2. Define reversibility and discuss its various forms. Explain the process by which banks furnish reversibility.
  3. Define the various forms of risk and explain the methods of avoiding them.
  4. A man about to retire at age 65 with no dependents has $100,000 in capital. Discuss the problem of its investment.
  5. What are the lending principles applicable to measuring the internal risk on government bonds. In the light of these principles, compare the risk on Bolivian bonds and United States bonds.
  6. Define the factor of safety — cumulative and non-cumulative — and the factor of change. Set up an illustrative comparison between two railroad bonds, assuming the proper figures for your purpose.
  7. List the various forms of taxation which a Maryland investor must consider, and explain how they affect different classes of investors.

__________________________

11-B. Principles of Accounting.

[HOWARD E. COOPER, M.S., Instructor in Accounting. B.S., University of Denver, 1925; M.S., Columbia University, 1927; Registrar, School of Commerce, Accounts and Finance of the University of Denver, 1922-26, 1927-28; Assistant Professor of Banking, University of Denver, 1927-28.]

A study is made of financial statements as the goals of accounting endeavor, of the analysis and recording of business facts in the accounting books and records, and of the methods of opening and closing the books for a single proprietorship, partnership and corporation as well as the use of controlling accounts, and consignment accounts. Many practical problems are assigned to give facility in the handling of accounting records and a ready appreciation of their significance.

Prerequisite: Political Economy 1-C.

Three hours weekly through the year. Mr. Cooper. Mon., Thurs, Fri., 1.30 p.m. Gilman Hall 312.

THE JOHNS HOPKINS UNIVERSITY
Mid Year Examination
POLITICAL ECONOMY 11-B

February 1, 1932

Please write your answers to these questions legibly and in ink.

    1. Discuss the purposes and content of a balance sheet.
    2. Discuss the purposes and content of a profit and loss statement.
    1. Why does a ledger need adjusting at the close of a fiscal period?
    2. What does a trial balance prove?
    1. What is the function of a journal; of a ledger?
    2. Name five temporary proprietorship accounts and two vested proprietorship accounts.
    1. What accounts appear in a post-closing trial balance?
    2. Illustrate what you regard the best way to journalize a transaction involving the discount of the proprietor’s own note at the bank. (Use for illustration a 60 day $1500 note discounted at 6%.)
    1. What is a controlling account?
    2. Illustrate how a sales journal can be set up to provide for the proper posting to a ledger when an accounts receivable controlling account is made use of.
    1. State the fundamental equation of accounting in two forms.
    2. Explain the effect upon your equation of each of the following:
      1. Purchase of machinery on account
      2. Sale of merchandise for cash

7-10. Making use of information below, prepare:

    1. Profit and Loss Statement for year 1931.
    2. Balance Sheet for Dec. 31, 1931.

TRIAL BALANCE, DECEMBER 31, 1931

Cash 3,150
Initial Inventory 85,250
Accounts Receivable 76,200
Furniture and Fixtures 1,900
Reserve for Depr.-Funiture & Fixtures 380
Delivery Equipment 1,500
Notes Payable 25,000
Accounts Payable 62,500
D.M. Craven, Capital 83,205
D.M. Craven, Personal 2,400
Sales 325,000
Purchases 310,000
Purchase Returns & Allowances 1,250
Freight-In 4,250
Selling Expense 5,280
Delivery Expense 1,125
Administrative Expense 6,380
Discount on Sales 825
Discount on Purchases 1,420
Interest Received 825
Interest Paid 1,320
499,580 499,580

ADJUSTMENTS:

Merchandise on hand 12/31/31 $92,600
Unpaid freight bills $480
Of the interest received, there is unearned $125
Delivery Expense-Supplies on hand $475
Accrued Interest on Accounts Receivable $150

Accrued Depreciation:

Furniture and Fixtures 10%
Delivery Equipment 20%

Bad Debts allowance ½ % of Sales

THE JOHNS HOPKINS UNIVERSITY
Final Examination
POLITICAL ECONOMY 11-B

June 6, 1932

  1. Explain the accounting for Notes Receivable Discounted.
  2. Distinguish between a sinking fund account and a sinking fund reserve account. Where do each appear on the balance sheet?
  3. Explain one method of accounting for consignments both from the standpoint of the consignor and consignee.
  4. Distinguish between stock discount and bond discount and discuss their treatment on the accounting records.
  5. Explain the imprest method of handling petty cush disbursements.
  6. Explain in detail what is meant by reconciliation of a bank statement.
  7. A and B are engaged in a partnership the capital of which is $20,000 divided equally between A and B. They agree to admit C to a one-third interest upon investment of $12,000. Set up the complete journal entries concerning the admission of a new partner.
  8. X, Y and Z are engaged in a partnership. The balance sheet is as follows:
Cash 10,000 Liabilities 5,000
Other Assets 40,000 X Capital 25,000
Y Capital 15,000
Z Capital 5,000
50,000 50,000

They decide to dissolve the partnership. The other assets are sold for $25,000, Z personally is insolvent. How should the affairs be wound up?

9 — 10 The Baltimore Corporation is formed with an authorized capital stock of 1000 shares of common stock and 500 shares of preferred each with a par value of $100 per share. The common stock is subscribed at 95 and paid one half down and the balance in 30 days. The preferred stock is subscribed for and sold at 110. Set up the journal entries to show the disposition of the capital stock.

__________________________

12-B. Economic History.
Associate Professor MITCHELL.

[BROADUS MITCHELL, Ph.D., Associate Professor of Political Economy. A.B., University of South Carolina, 1913; Fellow, Johns Hopkins University, 1916-17, and Ph.D., 1918.]

Three hours weekly through the year. Mon., Tues., Thurs., 1.30 p.m. Gilman Hall 314.

In the first part of this course a study is made of English economic history, the purpose being to show not only the industrial development of the English people as such but the way in which the economic motive has influenced the whole of social life. Particular attention is given to the characteristic forms of economic organization — the manorial system, the guild system, the entrance of capitalism and the causes and consequences of the Industrial Revolution. Special reference is made to those features of English economic history which have influenced industrial life in the United States. The second part of the course is a survey of the economic history of our own country. Here the same effort is made, as in the case of England, to show the bearing of economic considerations on political evolution, especially in the direction of the growing importance of the Federal Government.

THE JOHNS HOPKINS UNIVERSITY
Mid Year Examination
POLITICAL ECONOMY 12-B

Dr. Mitchell

February 1, 1932

  1. Describe the manorial system as to its chief economic features.
  2. The same for the Guild System.
  3. In what ways were rural and town workers better off in the middle ages in England then at present in America?
  4. What were the circumstances which provoked the announcements of “Gresham’s Law”?
  5. By what stages did the independent craftsman of 1700 become the wage worker of 1850?
  6. What were the causes and main consequences of the Industrial Revolution?
  7. Name and discuss briefly the social movements which followed the Industrial Revolution.
  8. Do you notice any great tendency in Economic history? If so, what?
THE JOHNS HOPKINS UNIVERSITY
Final Examination
POLITICAL ECONOMY 12-B

May 30, 1932

  1. Discuss the place of Alexander Hamilton in American economic history.
  2. That were the chief economic consequences of the War of 1812-14?
  3. Give an outline of banking in the United States from 1791 to 1913.
  4. Discuss the economic causes of the Civil War.
  5. Describe the currency agitation following the Civil War.
  6. Tell what you know of the panics of 1837 and 1873.
  7. Describe the growth of “big business” and the problems which this development has brought.
  8. That are some of the present-day evidences of departure, in American economic life, from our traditional laissez faire
  9. What economic measures would you suggest as probably assisting the country to emerge from the present depression, and as avoiding future depressions?

__________________________

14-B. Corporation Accounting.

[HOWARD E. COOPER, M.S., Instructor in Accounting. B.S., University of Denver, 1925; M.S., Columbia University, 1927; Registrar, School of Commerce, Accounts and Finance of the University of Denver, 1922-26, 1927-28; Assistant Professor of Banking, University of Denver, 1927-28.]

This course presents the accounting principles involved in the organization, operation and liquidation of corporations. Detailed consideration is given to the principles of valuation involved in each item appearing on the corporate balance sheet with special emphasis on depreciation; also to the principles involved in the accounting for: the voucher system, installment sales, factory costs, foreign and domestic branch offices, combinations and consolidations, consolidated balance sheets, interpretation of balance sheets, and estate and trust accounting.

Prerequisites: Political Economy 1-C and 11-B.

Three hours weekly through the year. Mr. COOPER. Mon., Thurs., Fri., 2.30 p.m. Gilman Hall 312.

Courses 16-B, 17-B and 18-B listed below are reading courses open respectively to students who have completed Political Economy 3-B, 6-B or 4-B and are specially recommended by the instructors in those courses. Students will be furnished with a prescribed list of readings and will meet with the instructor one hour each week for discussion. Six points credit will be allowed for the completion of each course.

THE JOHNS HOPKINS UNIVERSITY
Mid Year Examination
POLITICAL ECONOMY 14-B

January 28, 1932.

Please write your answers to these questions legibly and in ink.

  1. Set up in detail a schedule showing the cost to manufacture, using your own figures.
  2. What changes would you expect to be made in the accounting system upon the introduction of a voucher system:
    1. What is meant by the term “going concern valuation”?
    2. What is the general principle used in the valuation of current assets; of fixed assets?
    1. When would you consider it desirable to appreciate the value of fixed assets on your books?
    2. Illustrate by means of journal entries how it could best be accomplished.
  3. In setting up a reserve for bad debts at the close of the first year of operation of a concern, what information would you seek?
  4. Discuss fully the retail method of inventory valuation.
    1. Enumerate six causes of depreciation.
    2. Distinguish between the problem of depreciation and replacement.
  5. How would you handle the replacement of a part of an asset on the accounting records?
  6. How would you account for the cost of rearrangement of machinery in a factory?
  7. What is depletion and how is it calculated?
THE JOHNS HOPKINS UNIVERSITY
Final Examination
POLITICAL ECONOMY 14-B

June 4, 1932

  1. Explain in detail how a trial balance in terms of foreign currency should be converted into dollars so that it will balance.
  2. Discuss briefly the methods which might be used in the analysis of Balance Sheets.
  3. Discuss the accounting problem involved in case in which goods are shipped from a home office to a branch at a figure other than cost.

(a) What is the purpose of a statement of funds and its application?

(b) What is the purpose of a statement of affairs and a deficiency account?

  1. If you were asked how to determine the value of the good will of a corporation, what information would you require and how would you proceed?
  2. Distinguish between (a) principal and income and (b) real and personal property in accounting for the affairs of an estate.

(a) Describe two methods of carrying the investment account of a subsidiary on the books of the holding company.

(b) Under what circumstances does the consolidated good will on a consolidated balance sheet change?

8 — 10

The following are the balance sheets of Company A, a holding and selling Company, and Company B, a manufacturing company. A large part of the products of Company B is sold to Company A. The inventory of Company A curries a profit of $1000 over cost to Company B. The investment of Company A in the stock of Company B was made one year ago, at which time the surplus of Company B was $2000. Company A acquired a 75% interest in Company B.

Prepare a consolidated balance sheet. Be careful to prepare accurate working papers. Submit the working papers with your solution.

A.

Cash 5000 Accounts Payable 4000
Accounts Receivable 3000 Accounts Payable to Co. B 2000
Merchandise 6000 Capital Stock 10000
Capital Stock—Company B
(carried at cost)
8000 Surplus 6000
22000 22000

B.

Cash 1000 Accounts Payable 3000
Accounts Receivable 3000 Capital Stock 8000
Accounts Receivable—Co. A 2000 Surplus 4000
Merchandise 4000
Equipment 5000
15000 15000

__________________________

20-B. Marketing.

[ROY J. BULLOCK, M.B.A., Instructor in Marketing. A. ., Doane College, 1925; M.B.A., Harvard University, 1927; Associate Professor of Business Administration, University of Oregon, 1927-28.]

A comprehensive study of the machinery encountered in present-day business that is utilized in the distribution of merchandise from the producer to the consumer, together with the policies governing its use. Attention is given to such subjects as retailing, wholesale trade, advertising, buying, cooperative marketing and the various types of functional middlemen, with particular regard to the place occupied by each in the general marketing structure. Detailed examination is made of the distribution of the more important commodities. A considerable amount of time is spent in the discussion of problems taken from business practice that pertain to the topics under consideration.

Three hours weekly through the year. Mr. BULLOCK. Mon., Tues., Wed., 8.30. Gilman Hall 312.

THE JOHNS HOPKINS UNIVERSITY
Mid Year Examination
POLITICAL ECONOMY 20-B

Tuesday, January 26, 1932.

  1. Identify:
    1. Fashion cycle
    2. Wagon Jobber
    3. Drop shipment
    4. Emotional buying motives
    5. Fabricating materials
    6. Broker
    7. Selling agent
    8. Commission agent
    9. Intensive distribution
    10. Mill supply house
  2. What advantages has the chain store over other types of retail institutions? What problems are more difficult for the chain store than for other retailers? Are your generalizations borne out by the history of the chain store movement?
  3. Discuss the present problems of the wholesaler giving attention to the economic and social changes that have contributed to these problems and expressing your estimate as to the future in this field.
  4. “What is needed is a greater appreciation and understanding of the underlying economic basis for the rise in the cost of distribution.” List and explain these underlying economic causes.
  5. The Child Steel Company, which manufactured tubular steel products for automobiles, was forced into receivership in 1921. The embarrassment of the company was attributed to its dependence on a single industry for disposing of its product; when the slump occurred in the automotive trade in 1920, so many cancelations of orders were received by the company that it was left with inventories and commitments for raw materials which it could not continue to finance. In order to keep the plant running under the receivership, it was found necessary to look for orders outside the automotive industry, and a large order for tubular parts was obtained from a bedstead manufacturer which could be filled with only minor changes in the equipment of the plant. This order was handled so satisfactorily that in August, 1922, the receiver was considering the practicability of adding to the company’s line one or more new products in order to level its production curve and assure its future success. In considering this step the receiver was faced with the following question?
    Would it be wise to attempt to develop the company’s market in a wider field than the automotive industry? If so, what new products should be produced? If it should be decided to continue manufacturing bedstead parts, should the company enter into competition with bedstead manufacturers by fabricating finished products, or should it continue the policy of selling parts to bedstead manufacturers?
    Among the products manufactured by the Child Steel Company prior to its receivership were such tubular steel automotive parts as exhaust pipes, air pumps, manifolds, windshield tubing, and wheel rims. Distribution was secured partly through supply wholesalers but chiefly through a small force of technically trained salesmen who sold directly to manufacturers.
    The advertising program of the Child Steel Company in 1921 consisted of one-page advertisements appearing once a month in both the Iron Age and a weekly automotive journal which had a circulation among retailers and manufacturers. Circular letters also were sent once a year to all automobile manufacturers who were not using Child products. An engineering department was maintained for the purpose of cooperation with the users of the firm’s products.
    Before the depression of 1930, the Child Steel Company had sufficient orders for automotive products to keep its factory running at capacity. The few orders which were received in the latter part of 1921 and early in 1922 from customers outside the automotive industry were handled without additional equipment. Under the receivership the overhead of one month always was charged against the following month’s business; hence it was stated that the company was limited to selling products for which it could secure immediate payment and which would cover current overhead charges. In addition to the production of bedstead parts or finished bedsteads, it also was proposed that the company manufacture bicycle frames, wire tennis racket frames, vacuum cleaner handles, lawn-mower handles and rolls, tables for ice-cream parlors, and tubular parts for various sorts of electrical equipment.
    The company could continue to manufacture tubular parts to be sold to bedstead manufacturers without installing additional equipment. The manufacture of complete bedsteads, however, would require a reorganization of the plant in order to provide at the minimum, for assembling, painting, and finishing departments. Although ordinarily the connecting bars were made of angle iron, these pieces, as well as the head and foot pieces, for bedsteads, could be made of rods and tubular steel which the company already produced, but it would be necessary either to buy the springs from other manufacturers or equip a part of the Child plant for the production of springs.
    It was expected that it the company manufactured a finished product, a more stable and permanent market could be secured than if it continued the manufacture of parts which were sold to other manufacturers. It had been found that in times of depression the effect of price cutting in the steel trade was especially severe on those manufacturers who depended on other manufacturers for their market, whereas it seemed probable that by selling a finished product for retail distribution the company would be less likely to suffer from wide fluctuations in its market.
    If the policy of manufacturing bedsteads were adopted, it was planned to establish the Child brand by advertising and to sell directly to retailers. It had not been decided whether the company should try to secure national distribution or confine its efforts to one or two localities.
    There were numerous steel bestead manufacturers in the United States. One of the largest of these manufacturers advertised and distributed its beds nationally. It was one of the few companies that had its own tubular steel plants. Although several other firms in the bedstead trade also secured national distribution, a large part of the business was obtained by local manufacturers, each of whom concentrated his distribution in a local district und bought tubular steel and angle iron parts from iron and steel manufacturers. Many of these small firms did not advertise. Although a majority of the companies sold directly to retailers, several sold to wholesalers.
THE JOHNS HOPKINS UNIVERSITY
Final Examination
POLITICAL ECONOMY 20-B Marketing

June 1, 1952

  1. Identify:
    1. Trade-mark
    2. One price policy
    3. Merchandising
    4. Basis contract
    5. Trading up
    6. Trade mark act of 1920
    7. Price maintenance
    8. Consumer recognition
    9. Selling agent
    10. Elastic demand
  2. Define quantity discount, protective discount, and deferred discount. Explain the usefulness of each in sales strategy.
    1. Describe in detail the ways in which the Agricultural Marketing Act was intended to aid agriculture.
    2. What are the chief obstacles that must be overcome if the cooperative marketing of agricultural products is to be successful? What is your opinion as to the future of cooperative marketing in this country?
    1. What factors determine whether or not a manufacturer of fabricating parts or fabricating materials should advertise his product to consumers?
    2. Discuss the advantages and disadvantages of a private brand from the point of view of a grocery chain.
  3. Adam Smith in the “Wealth of Nations” makes the statement that division of labor is limited by the extent of the market. To what degree does this generalization justify modern marketing practice?

__________________________

21-B. Sales Management.

[ROY J. BULLOCK, M.B.A., Instructor in Marketing. A. ., Doane College, 1925; M.B.A., Harvard University, 1927; Associate Professor of Business Administration, University of Oregon, 1927-28.]

The first part of the course deals with management of the marketing functions of a business from the point of view of its administrative officers. Attention is given to such matters as sales organization, market analysis, prices and terms of sale, selling methods and management of sales force. The second part of the course is a study of the administration of retail accounting, store location and layout, purchasing policies, retail organization, advertising and display, and store operation. In both parts of the course the work will consist primarily of the study of problems encountered in business practice, supplemented by outside reading and research.

Three hours weekly through the year. Mr. BULLOCK. Mon., Tues., Thurs., 9.30. Gilman Hall 310.

EXAMINATION
POLITICAL ECONOMY 21-B

Friday, January 29, 1932 – 9 a.m.

I.

What general rules can you give for districting sales territories?
What is the relation between sales potentials and sales quotas?

II.

“Industry in general is just now beginning to recognize that merchandising is a specialized function.” Define merchandising. What types of problems would a merchandise manager deal with? In what respect is “trading down” a merchandising problem?

III.

(a) What general sources of information are available for sales research and market analysis?

(b) Draw up a set of general rules for procedure in making a market analysis.

(c) Discuss the advantages and disadvantages of the use of an outside agency. For research work.

(d) Compare the mail questionnaire with the personally presented questionnaire for use in market survey work.

IV. and V.

Tosdal, Problems in Sales Management, page 255, Problem 37. Grade Manufacturing Company. Discuss each of the six possible methods of distributing the product mentioned on page 259 and recommend the one you think is best.

EXAMINATION
Political Economy 21-B
(Sales Management)

Friday, June 3, 1932 — 9 a.m.

I.

Identify:

  1. Drawing account
  2. Functional Foremanship
  3. Bonus
  4. Budget
  5. Decentralized control
  6. Sales foremanship
  7. Dealer helps
  8. Departmentization on basis of outlet
  9. Line and staff organization
  10. Rex Cole

II.

    1. Should a separate department be established to do sales planning and research? Where should it be placed in the sales organization? Why?
    2. What should be the relation of the sales department to the credit department?

III.

    1. Discuss the personal interview as a means of selecting salesmen. Outline methods for improving its effectiveness.
    2. Should a company make written contracts with the salesmen it employs?

IV.

    1. Discuss the value of test campaigns to the manufacturer.
    2. What are the advantages and disadvantages of flat expense allowances for salesmen?

V.

“Sales departments vary widely in the functions which they perform and in the work for which they are responsible.” — Tosdal, Problems in Sales Management, p. 536. Illustrate the meaning of this statement. How do you account for such variation?

__________________________

22-B. Commercial Law.

[ROGER HOWELL, Ph.D., of the University of Maryland, Lecturer  in Commercial Law.]

The course will offer a study of certain branches of law which are of especial importance in the business world, from a practical point of view with the purpose of giving the student a general working knowledge of the problems met and of the general principles applicable thereto. Special attention will be devoted to the law of Contracts, Agency, Bailments, Sales, Negotiable Instruments, Partnership, Corporations, Bankruptcy, and the Administration of Estates of Insolvents and Decedents.

Two hours weekly through the year. Dr. HOWELL, Thurs, Fri., 8.30. Gilman Hall 314.

THE JOHNS HOPKINS UNIVERSITY
Mid Year Examination
Political Economy 22 (Commercial Law)

January 27, 1932.

  1. A, who was engaged in the wholesale furniture business, sent a circular letter to all retail furniture dealers in Baltimore, saying: “I enclose a complete list of all furniture in my show rooms and warehouse; you can inspect the same on January 11, 12 & 13, 1932. I invite you to send in a sealed bid for the entire stock. Bids will be opened at noon on January 15th, and if you are the highest bidder, I will advise you.” B submits the highest bid and demands delivery of the stock. A refuses, and B sues A Judgment for whom?
  2. A, in Galveston, sold to B of Liverpool 1000 bales of cotton under a written contract which provided that the cotton was “to be shipped on the Steamship Eastern Star”. A shipped 900 bales by the Eastern Star and 1000 bales by the Steamship Western Star. At Liverpool he tenders B first the 900 bales shipped by the Eastern Star, which B refuses. He then tenders the 1000 bales shipped by the Western Star, which B also refuses. All the cotton was of the same grade. The price of cotton has fallen sharply, this being the chief reason for B’s refusal to take it. Is B within his rights in refusing to accept each of A’s tenders?
  3. X, Y & Z are engaged in business under the firm name of the Prime Hat Company. In their business they use order blanks on which the firm name is printed at the top. A gives a verbal order for $500. worth of goods to X, who enters the order in duplicate on the firm order blanks, keeps one copy and gives the other to A, but does not sign either. Subsequently the firm refuses to fill the order and A sues. Judgment for whom?
  4. A sells his grocery business to B, B agreeing orally to pay therefor a lump sum in cash and to pay all outstanding obligations incurred by A for goods and merchandise for the store. B paid the cash and took possession. C has a claim against A for some canned goods sold to A on credit white A was running the store. This claim has not been paid. Can C hold B for it?
  5. On Monday morning at 9 o’clock A in Baltimore sends the following telegram to B in Chicago:— “Will sell 100 shares Steel common at 45. (Signed) A”. This telegram reaches B at noon, Monday. On Tuesday morning B writes and mails a letter to A accepting the offer. This letter reaches A Wednesday afternoon at 4 o’clock. Meanwhile the market had rallied and at the close of the Stock Exchange at 2 p.m. Wednesday Steel common was selling at 50. A refuses to deliver the stock and B now sues him for damages. Is A libel?
  6. A, a contractor, contracts with B, a property-owner to do the excavation work for the foundation of a building for $4000. The contract provided that the foundations were to go down to a depth of 30 feet. At 15 feet solid rock is unexpectedly encountered, making the work much more expensive than A had expected: he tells B he is going to quit. B offers him $2000. additional to complete the work. A accepts, and completes the work. B refuses to pay more than $4000. Is A entitled to the additional $2000.?
THE JOHNS HOPKINS UNIVERSITY
Final Examination
POLITICAL ECONOMY 22
(Commercial Law)

June 2, 1932

  1. A is agent for P to sell books. He sells a set to T, allowing easier terms than he was given authority to allow. P on learning of the transaction sends the books to T, but notifies him that he must pay for them on the terms which A was authorized to allow. T keeps the books, but refuses to pay except on the terms allowed him by A. Which prevails, T or P?

(a) A, an investment broker, is given specific instructions by P to buy certain securities. A has information which causes him to think these securities are a bad investment, and buys others instead. The investment results in a loss to P. What are P’s rights against A?

(b) A is P’s agent in a foreign country for the sale of P’s goods. A war is declared which seems likely to interfere with his chance of selling the goods in accordance with his instructions. He proceeds to sell them at once for the best price obtainable. The sale results in a loss to P. What are P’s rights against A?

  1. P employs A to rebuild his house under a contract by which A agrees to furnish competent workmen at a certain daily rate and to charge for material at cost, plus 10 per cent. The work is to be done under the supervision of P’s architect. Needing an engine on the work, A hires from T an engine for $150 a week, to be operated under the direction of T’s engineer. The engineer negligently allows the pressure in the boiler to become too great and it explodes, injuring X. X sues P, A, T, and the engineer. What are his rights against each?

(a) B writes to S, a manufacturer of tables, saying: “Please ship me one #x27 Sturdimake table this being the description of one of S’s makes of tables in his catalogue). I want a table that will hold a weight of at least 1000 pounds.” S ships such a table and it breaks under a strain of 900 pounds. There is no representation in the catalogue as to the weight which any of S’s tables will hold; S’s #29 table, however, would have held the weight desired. Is there any breach of warranty by S?

(b) Would it make any difference in the above case if the table sent had been defective and had broken under a strain of 200 pounds?

(a) S sells to B all the bricks in a certain yard for an agreed price, it being understood that B may remove the bricks any time within 3 months, but must pay the price before removal. In whom is the title after the agreement but before removal or payment? Suppose B neither removes the bricks nor pays?

(b) Suppose that in the above case, the price was fixed at $15, per thousand for bricks of first quality and $10 for those of second quality, it being understood that S should have his experts examine them and determine the relative quantities of each and that B would accept this determination. In whom is title after the agreement but before the examination by S’s men?

(c) Suppose the sale was of 10,000 first quality bricks only, there being a much larger quantity in the yard, at an agreed price, it being understood that B’s experts should select the bricks. In whom is title after the agreement but before the selection?

(d) Would it make any difference in either of the last two cases if the contract expressly declared an intention that title should pass to B at once?

  1. S contracts with B to manufacture, sell and deliver to B and put in running order a certain machine. He does so. B finds it unsatisfactory and notifies S that he rejects it. He continues to use it, however, for 3 months, continually complaining of its defective condition. He then takes it down and notifies S to come and get it. S comes back with a demand for the purchase price. What are the rights of S and B?

Sources:

The course announcements:

The Johns Hopkins University Circular. New Series, 1931, No. 3 (Whole Number 423). The College of Arts and Sciences of The Johns Hopkins University 1931-1932, pp. 36-37.

The Johns Hopkins University Circular. New Series, 1931, No. 5 (Whole Number 426). School of Business Economics, 1931-32.

The examination questions:

The Johns Hopkins University. The Eisenhower Library. The Ferdinand Hamburger, Jr. Archives. Department of Political Economy Series 6. Box 2 “Curricular Materials”; Folder “Exams 1930-1935”.

Image Source: Johns Hopkins University yearbook, Hullabaloo 1932.

Categories
Harvard Statistics

Harvard. Reflections on the teaching of economic and business statistics. Essay by William L. Crum, 1926

Reading the tribute published by colleagues at Berkeley for the statistician William Leonard Crum, one would come away with the impression that he was not just a nice man and good colleague, but that he was even a pretty, pretty good statistician. In fact Crum lagged the frontier of mathematical statistics by at least a full generation, cf. the 1945 report written by Crum and his younger colleague Edward Frickey on Harvard’s statistics and national income courses. 

I stumbled upon a reprint of the short 1926 article by Crum, transcribed below, at the Library of Congress, Manuscripts Division, Francis Willcox papers, 1851-1961 (Box 40, Folder “Outlines of Economics Statistics”). What the article lacks in profundity, the reprint provides in a somewhat better image of Crum in his early ’30s that I use here rather than a screen shot of the hathitrust.org image that provides an internet source for the text.

____________________________

In Memorium
University of California, 1968

William Leonard Crum,
Economics; Business Administration:
Berkeley

1894-1967
Professor of Economics, Emeritus

On June 11, 1959, the University of California on the Berkeley campus conferred the honorary degree Doctor of Laws upon Professor W. L. Crum. The citation read as follows:

“Your academic career has involved membership in faculties of four great universities: Yale, Harvard, Stanford, and California. A warmly respected colleague, valued teacher, and careful administrator, an economist who brings to the ‘dismal science’ a wealth of human understanding, judgment, and objectivity…”

Professor Crum was born on April 8, 1894, in Hoosick Falls, New York. He was graduated from Williams College in 1914 in Physics and received the M.A. and Ph.D. degrees from Yale in 1916 and 1917 in Mathematics. Following his service in World War I, which included 13 months’ duty in the artillery in France, he returned to Yale’s Mathematics faculty. Beginning in 1923, he served on the faculty of Economics at Harvard for 25 years except for two years at Stanford from 1927-29 as Professor of Statistics. He came to
Berkeley in 1948 as Professor of Economics in the Departments of Business Administration and Economics. Honorary degrees were conferred upon him by Williams College (1940), Harvard (1945), and California (1959).
Leonard Crum had one of the finest minds and best tool kits (science, mathematics, statistics, economic theory) in the economics profession. Beginning in 1918, there was a steady flow of books, monographs, and scholarly papers both in the refinement and application of mathematical, statistical methods and in substantive contributions. Early in his career he became a recognized pioneering authority in business cycle analysis. From 1923 to 1935 he was associated with the new Harvard Economic Society in various capacities, including the posts of Vice President and President. From 1936 to 1949 he was a Director of the National Bureau of Economic Research. Prior to World War II he was consultant, Division of Research and Statistics and Division of Tax Research, United States Treasury. He has served many journals in an editorial capacity, including Harvard’s Review of Economic Statistics and Quarterly Journal of Economics. A number of his early publications were classics in their fields—among them, Advertising Fluctuations, Seasonal and Cyclical (1927), Corporate Earning Power (1929), and Corporate Size and Earning Power (1939). These early studies provided the background for his important The Age Structure of the Corporate System (1953), published by the University of California Press. In Berkeley his primary teaching field was private finance and investments, in which he was a leading authority.

Leonard Crum was an exceedingly active and influential member of the Berkeley faculties in Business Administration and in Economics. His contributions derived not only from his continuous leadership and productivity as a scholar and a teacher but also from conscientious, effective participation and leadership in all aspects of departmental, school, campus, and University-wide responsibilities. His budgetary requests and reports as Vice-Chairman of the Department of Business Administration became the models for all other administrative units. He always had time, or made time, to serve on faculty and administrative committees, to appraise the research papers of colleagues and students, to talk over personal investment problems, to serve as member or chairman of campus or University-wide ad hoc committees.

At the memorial service on June 1, 1967, a colleague in another department remarked that Leonard Crum, time and again, was made chairman of committees when there were deep divisions of opinion since “he alone could find the consensus, and compel its acceptance.” He also noted, “Few combine Leonard’s proud independence of judgement with his ability to find a basis for common action in the service of the University.” Yet it was also noted by a colleague in the School of Business Administration that Dr. Crum “usually offered advice with such warmth and diffidence that most of us believed that we had thought up the ideas ourselves…. He was an individualist, who valued and heeded the views of others, but he did not shape his own ideas by waiting for the results of public opinion polls.” Another colleague from his own faculty remarked upon his fairness and forthrightness and his sense of humor and dry wit.

His basic kindliness, warmth of personality, and warm camaraderie were also stressed, together with an inherent New England formality, dignity, and reticence in manner. Most important of all, however, was his basic integrity, which was reflected in all aspects of his own work and in his administrative and professional relations.

All will agree with the observation also made at the Memorial Service that “he was a very uncommon man, indeed,” a man of extraordinary talents and highest standards of performance and almost complete disinterest in recognition for himself alone. Consequently his personal leadership and influence were unquestioned.

Leonard Crum was married on June 29, 1938, to Eleanor Marshall Evans who survives him.

E. T. Grether D. Votaw P. F. Wendt

Source: University of California, In Memorium, 1968, pp. 32-34.

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THE TEACHING OF ECONOMIC AND BUSINESS STATISTICS

By WILLIAM L. CRUM *

[*Co-author, with A. C. Patton, of An Introduction to the Methods of Economic Statistics, published by A. W. Shaw Company, 1925]

In recent years and especially following the war, there has been an enormous increase in the attention devoted to the elementary methods of statistical analysis. Not only in schools of business administration but also in the economics departments of liberal colleges there has been a vigorous development in the teaching of statistics, particularly as applied to economic and business problems. This tendency has resulted, in part, from the realization during the war of the great utility of statistical records and their interpretation, in the approach to and solution of the business problems of private enterprise, and the economic problems of public affairs. It has resulted also in considerable measure from the great interest in forecasting the cycles of business prosperity and depression. Such forecasting has been advanced recently by the application of statistical methods to the analysis of the already available and rapidly accumulating records of economic and business conditions. No doubt also the increasing attention to economies in production and distribution, which became necessary during the readjustment following war-time inflation, has played a large part in expanding the emphasis upon the analysis of numerical records of performance.

The teaching problems involved in presenting a course in the methods of business statistics are somewhat more specialized than those incident to a course in economic statistics. In teaching economic statistics it is now rather generally understood that certain well-defined fundamental concepts must be introduced at an early stage. These relate to the nature of statistical facts, the standard methods for presenting statistical data, and the elementary arithmetical devices for summarizing such data. For the most part, these introductory matters comprise a discussion of the collection and assembling of statistical material, the organization of such material into tables or charts, and the derivation from such material of those particular statistical numbers which serve to give a brief but adequate picture of the main properties of individual groups of data. Indeed, the chief teaching problem here consists in the development of methods of deriving summary statistical numbers — numbers concerned primarily with the averages and with measures of dispersion or variability — of the particular series of economic data which may be under examination.

It is here first that the teacher is confronted with the question of the mathematical knowledge to be assumed. Although it is undoubtedly much simpler to present the essential principles of statistical analysis to students or readers who have a working understanding of college mathematics, it is an important fact that at present the majority of those who desire to secure an adequate knowledge of economic and business statistics do not have this mathematical equipment. It is in practice necessary, therefore, to outline the course with a view to making it understandable to this majority of students. An examination of the text-books which have been written on economic and business statistics in recent years clearly reveals the tendency, at least in the majority of instances, to give a treatment which can be comprehended by those individuals who have only a minimum of mathematical knowledge.

When once the basic concepts essential to an understanding of statistical analysis have been grasped, the student is ready for the study of numerous specific economic applications of statistics. He can be introduced, for example, to the general problems of price index numbers, of individual incomes, of foreign trade movements, of manufacturing and basic production, of the business cycle and its forecasting, and to other economic problems which are currently approached from the statistical side. Presumably, the bulk of effort in a course in economic statistics is given to these applications, to the adaptation of the elementary concepts to the particular needs incident to these applications, and to the development of certain specialized methods which are required in many particular applications. A satisfactory course of this sort not only teaches the student how to analyse the statistics involved in the economic applications, but it gives him also some schooling in the interpretation of his results, and it cautions him emphatically against the too confident inferences which he is likely to draw if he disregards the necessary limitations on the statistical processes.

The teaching of business statistics is necessarily somewhat more specialized than the teaching of economic statistics. It may fairly be said that the student of business statistics must first have a thorough course in the methods of economic statistics. Although it is possible for him to cut short some of the extensive study usually given in economic statistics to the applications of statistical method to specific economic problems, it is essential that he have a working knowledge of the basic concepts before attempting to make any considerable study of special business statistics. To be sure, it is quite feasible for the course in business statistics to confine its illustrations of method, even of elementary method, to business data rather than economic data, and in this way to introduce the student early to those special and frequently limited problems which confront the individual enterprise rather than industry or the economic structure as a whole.

When once the student of business statistics has gone over the preliminary ground which is also covered in economic statistics, and has become acquainted with some of those economic applications which are of importance also in business statistics — because a considerable part of business statistics, sometimes called external statistics, includes a large portion of so-called economic statistics — he is ready to go forward with the peculiar problems of business statistics. These problems are frequently so highly specialized that it is very difficult to outline a complete course based upon a few general principles of analysis, as is the case in economic statistics. Here, rather, one is impelled to a treatment somewhat resembling the so-called case system of instruction, in which the student takes up one particular problem after another and learns by a study of individual and frequently very different “situations” those principles and practices which fit him to cope with the ordinary problems of business statistics which he may encounter in the administrative work of a particular organization.

In conclusion, then, it may be said that a course in economic or business statistics commences with a study of elementary principles and methods common to both subjects and that in either case considerable attention must be given to the application of statistical methods to general economic problems. At some stage, however, the course in business statistics must break off from the general outline of the course in economic statistics, and from there on must be concerned largely with the treatment of numerous and diverse special problems each presenting its own difficulties and requiring its own peculiar method of treatment. In both courses a large amount of actual routine technical work on the part of the student is essential if he is to learn the subject thoroughly, and in both courses the teacher must lay a great deal of emphasis upon the interpretation of the results found by analysis.

Source: Ex Libris. Vol. I, (May 1926), No. 3, pp. 14-16. “A journal devoted to the professional interests of business, agriculture, engineering, and the social sciences.”

Image Source: Portrait of William L. Crum, ibid., p. 15.

Categories
Exam Questions Harvard Law and Economics

Harvard. Final Exam for Principles of Law governing Industrial Relations. Wyman, 1909-1910

Third place in economics course enrollments at Harvard in 1909-10 was taken by the sop vocational course offered to undergraduates on the legal aspects of industrial relations that was taught by the law professor Bruce Wyman. First place was taken unsurprisingly by the Principles of Economics course and the second place by the Elements of Accounting course.

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Material from earlier years

1901-02. Autobiographical note of Bruce Wyman, enrollment, course description, syllabus, exams.

1902-03. Wyman’s Obituary, enrollment, course description, exams.

1903-04. Enrollment and exams.

1904-05. Enrollment, course description, exams.

1905-06. Enrollment, paper assignments, exams.

1906-07. Enrollment, paper topics, exams.

1908-09. Enrollment and exams.

1910. About Wyman’s reputation as a soft-grader (a “snapper problem”) and the scandal that led to the resignation of his Harvard law professorship in 1913.

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Course Enrollment
1909-10

Economics 21 1hf. Professor Wyman, assisted by Messrs. [Dana] Brannan and [John Mortimer Richardson] Lyeth [A.B. Harvard, 1907; A.M. 1908; Ll.B. 1910; New York Times Obituary (24 Dec 1957)] — Principles of Law governing Industrial Relations.

Total 183: 3 Graduates, 113 Seniors, 56 Juniors, 5 Sophomores, 6 Others.

Source: Harvard University. Report of the President of Harvard College, 1909-1910, p. 45.

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ECONOMICS 21
Mid-year Examination, 1909-10

Give reasons clearly

    1. Smith has made the “Perfect Safety Razor” for years. Jones now puts on the market a “perfect safety razor” in a black square box like Smith’s, with a similar inscription on the side, “No Stropping — No Honing.” On the box is this warning in large letters: “Do not be deceived by my rival. I make the only perfect safety razor. John A. Jones.” Can Smith restrain Jones’s methods in any way?
    2. Suppose Smith’s razor required stropping.
    1. Suppose Jones publishes this advertisement: “Beware of Smith’s razors; they always rust, causing blood-poisoning; the blades crack easily; no man ever used one without cutting himself.” Assuming that the whole advertisement is false, is any part of it legally actionable?
    2. Would it affect your answer if Jones had added the additional false statement that “Smith is knowingly infringing my patents. I will prosecute all users of his razors”?
  1. May a combination of traders be sued by a rival company for:
    1. Giving $10 bonus with every 100 lbs. of tea bought by a patron who will leave one of their rivals and deal with them exclusively?
    2. Locating an agency next door whenever a rival starts a store, cutting prices till the rival is ruined, and then discontinuing the agency?
    3. Refusing to give credit to a rival?
    4. Selling at wholesale to an individual only on condition that he does not resell to a rival?
    1. A, B, and C are expressmen in Cambridge. D is the publisher of a directory in which he includes a list of Cambridge expressmen, making no charge for so doing. He has hitherto always inserted A’s name. B and C go to D and by paying D $100 induce D to omit A’s name in the next edition of D’s directory. Can A sue B?
    2. Suppose the owners of several Boston theatres by paying an extra price induce the agency having charge of the street car advertising to display no theatre advertising but theirs, can the owner of a rival theatre sue them?
    1. A was a druggist in Boston. He sold out his business to B and covenanted not to engage in the drug business within a radius of five miles of his store for ten years. The next week he formed the A corporation in which he took all the shares to himself except six, which he distributed among the members of his family. The general enabling statute provided that seven persons could incorporate. The A corporation immediately bought a druggist shop in the next block to A’s old stand. Can B sue the A corporation for doing business?
    2. Suppose a sign is put up, “A, now incorporated,” would that make any difference?
  2. A salesman is proposing to sell a large amount of silk to a partnership at a very high price. There are four partners. Two of them write to the salesman and say they refuse to buy. Nevertheless, the salesman after the receipt of these letters goes to the partnership place of business and concludes the sale with one of the other partners, the only one he could find. Could the salesman recover the price from the partnership, (a) supposing the fourth partner in fact assented, and (b) supposing he objected?
  3. Three railroads, X, Y, and Z, are competing in the carriage of coal from certain coal fields. A owns practically all the shares in the X railroad. He buys the majority of the stock in the M coal company, the largest producer in the field, and thereafter all the coal from M goes over the X railroad. A also buys the controlling interest in the Y railroad; and then conveys all his holdings to the X railroad. Under the Federal Anti-Trust Law:—
    1. Can the attorney-general move for a dissolution of this combination?
    2. Can the Z railroad sue it for treble damages?
    1. What was the form of organization of the original trusts? and describe the proceedings by which they were broken up.
    2. Give the history of the successive cases under the Federal Anti-Trust Law in which the question was raised whether the combination involved was substantially suppressing interstate commerce.

Source: Harvard University Archives. Harvard University, Examination Papers, 1873-1915. Box 9, Bound vol. Examination Papers 1910-11; Papers Set for Final Examinations in History, Government, Economics,…,Music in Harvard College (June, 1910), pp. 53-54.

Image Source: Harvard Law School ca. 1901 from the Detroit Publishing Company photograph collection (Library of Congress).

Categories
Columbia Development Economic History Economists International Economics Socialism

Columbia. Memo of Musings Regarding Institutional Economics, Area Studies, and Economic History. Hart, 1973

A memorandum written in 1973 by 64-year old Albert G. Hart shares his laments concerning the path taken by the Columbia University department of economics to what he saw to be a grievous neglect of instruction and research into the institutional nuts-and-bolts, historical trajectories, and granular area studies of economics. A copy of the memorandum was found in the files of his colleague, historian of economics, Joseph Dorfman.

Chicago-style economics was explicitly disdained by Hart who actually wished good riddance to Gary Becker (“…he played dog-in-the-manger too much…” with a note of scorn for Milton Friedman (“… [he] ignores the risk that what passes for ‘general economic law’ may turn out to be a series of adhockeries concocted to be plausible for a very special and perhaps transitory state of society…”).

The memo closes with a question of what to do with the theoretical Wunderkinder of economics departments whose peak years have past with still another quarter century of tenure left in their respective academic life-cycles. Fortunately he stops considerably short of recommending senicide.

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Previously posted content related to Albert G. Hart

University of Chicago

Exams for Introduction to Money and Banking at Chicago, A. G. Hart, 1932-35

Course Outline for Introduction to Money and Banking at Chicago. A. G. Hart, 1933

Columbia University

Hiring Albert Gailord Hart as visiting professor, 1946

Core Economic Theory. Hart, 1946-47

First semester graduate economic analysis. First weeks’ notes. Hart, 1955

Reading list for Economic Analysis (less advanced level). Hart and Wonnacott, 1959

Hart Memo, Economics Faculty Salaries for 15 U.S. universities. April 1961

Personal Narrative of the Columbia Crisis. A.G. Hart, May 1968

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AGH 11 July 1973

RESPONSIBILITIES AND RESOURCES OF THE DEPARTMENT OF ECONOMICS
AT COLUMBIA UNIVERSITY

Response, addressed to:

Professor Donald Dewey, Chairman,
Professor Ronald Findlay, Director of Graduate Studies
Continuing and Incoming members of the Department

Dean George S. FRANKEL, Graduate School
Dean Harvey PICKER, School of International Affairs

Interested bystanders

to report of Committee of Instruction on the Department of Economics,
by Albert G. Hart, Professor of Economies.

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

Preliminary generalities

The COI [Committee of Instruction] report is one of those papers which an informed reader finds simultaneously to be almost-excellent and almost-horrible. I can endorse with only minor reservations its conclusions that recent senior-staff recruiting has been of excellent calibre; that the intensification of workshop-patterns is very healthy; that much stress should be placed on catching good men before their qualifications known to us have become so generally know as to create a bull market; that the graduate students are only moderately happy, and that to build on the quantitative theoretical work of Lancaster, Phelps, and now Dhrymes is a promising way to rebuild morale as well as to establish Columbia again as a major professional focus.

Yet the report is so lop-sided that its net effect is likely not to be constructive. It overlooks entirely two major sides of economics in which Columbia has been, is, and ought to be prominent, and which are of major concern to students. And its lack of historical perspective and of a realistic view of the professional life-cycle may seriously distort its proposals and the reaction to the Department of the central leadership of the University. So I do not see how I can silently let this report stand as expressing real wisdom about the Department and its futures hence this “reaction”.

Some historical correctives

To clear the ground, let me disabuse the reader of the notion that the Department is only now beginning to work on the problems central to the COI report. In the first place, the fact that the workshop pattern of faculty-student interaction (taking in professional visitors) is central to the learning process in economics has been well understood for a long time. At the moment when I became chairman (in 1958), the Department was granted $250,000 by the Ford Foundation specifically to make a major shift toward workshop groupings. The deservedly-praised labor workshop (which non-accidentally had a Becker/Mincer leadership with experience in workshop endeavors at the University of Chicago) was one; we launched also an “Industrial Countries Workshop” (led by Carter Goodrich and Goran Ohlin) which developed a very useful line of publications, a Public Finance Workshop led by Carl Shoup and W. S. Vickrey, and an Expectational Economics workshop under my leadership which was clearly the least successful of the cluster, for reasons I won’t bother the reader with, but for all that far from useless). Presently we had a very lively and constructive International Economics workshop (led by Peter Kenen), which continued under Ronald Findlay; and for a number of years we have had a good-if-not-superlative Monetary Economics workshop (managed by Philip Cagan with partnership of Hart and Barger). In 1972/73 we tried a “Development/Regional” shop, which has been floundering somewhat — partly because it is hard to find a real focus with so many students not in the habit of working together, partly because of its natural leaders, Findlay had to put his main energy into the international field and Wellisz was absent on leave.

What is new in the workshop situation is in the first place the effort (led by Findlay, with enthusiastic support of most of the rest of the Department) to make it work for virtually everybody in the Department, faculty or student — and in the second place serious recognition by the Administration that this is an appropriate-if-expensive way to work, deserving serious backing even if no more Ford funds can be had.

A second consequential historical point (hinted at but not spelled out in the COI report) is that the Department has been working for years at the kind of staffing the COI report now indicates as appropriate. When I was chairman, for example, we had a deal arranged to recruit Svi [sic] Griliches —  which was frustrated by what I am bound to call sabotage at the ad hoc committee stage. In Carl Shoup’s chairmanship, we successfully recruited at the assistant professor level two key men who beautifully exemplify the application of quantitative theory and econometric research techniques to economics —  Peter Kenen and Gary Becker, both of whom were full professors very young, and were regarded as stars in the profession. In my chairmanship and afterwards, much of the work of the chairman went into nursing these two men’s careers and working conditions. Kenen contributed among other things a distinguished job as departmental leader — first Informally leading a curricular reform, then taking over as chairman for a term-and-a-fraction; had the 1968 not disrupted his strategy, he’d have brought us out as one of the two or three leading departments of economics. Becker, with all his virtues, was unlivable and not available as Departmental leader — being too much centered in his own work, too much inclined to insist that the only desirable recruits were quasi-Beckers, too narrow in his views of the profession’s responsibilities (despite his astounding record of success in applying his own apparently-narrow approach to an unexpectedly wide range of problems). Frankly, I felt it unburdened the Department when he moved to Chicago, because much as we must regret the loss of his lively influence on campus, he played dog-in-the-manger too much and helped foster the impression that economics was devoted to “apologetics for the system” rather than to a search for ways to guide constructive social policies.

Agreeing with the COI that we should recruit young and staff the tenure levels largely from local people, I would point out that we have been working at this with a remarkable lack of effective cooperation from outside the Department. As I just mentioned we did acquire Kenen and Becker as assistant professors; but we had no luck in persuading the Administration and ad hoc committees to let us repeat this success. In my time as chairman, we caught a star by converting Albert Hirschman (who accidentally was here without tenure as one-year replacement for Nurkse, on leave), and who was not at the time widely-enough appreciated in the profession. We were unable to hold David Landes on economic history. Two people who in the end proved to be very highly valued outside though when we acquired them they were rank outsiders are Alexander Erlich and Charles Issawi (both of whom were given tenure in my time as chairman). We should remember also that Vickrey (and earlier Barger and Shoup) started at Columbia in Junior ranks. Dewey, Hart, Cagan, Mincer (who however had filled in earlier), Lancaster, Findlay, Phelps, and now Dhrymes, represent recruiting-with-tenure.

What lends poignancy to the question of recruiting-young is that we now have a very distinguished collection of assistant professors — I think the best we’ve had simultaneously in my time at Columbia. But our uniform lack of success with ad hoc committees on promotions of such men (I think Nakamura has been our only promotion to tenure at all recently) creates a situation where we must tell them frankly that we have little hope of keeping them. Such anomalies as two successive years of leave for young Heckman (with serious problems of continuity for students, and loss of the experiential value of a disastrous first-try at reforming the econometrics curriculum) is an extreme example of the kind of handicap for the Department created by the fact that we are morally bound to help our assistant professors make the kind of showing that will get them goods jobs elsewhere — Columbia being unwilling to back us in getting deserved promotions.

Major areas disregarded

Two major areas of professional responsibility in which Columbia has had and must maintain great distinction are simply not mentioned in the COI report. These are the areas of “institutional economics” and of international/regional/developmental economics.

Traditionally, economics in the United States was split into two main camps —those of theoretical and those of “institutionalist” orientation — which maintained an uneasy partnership in the American Economic Association and in many departments. While the titular headquarters of institutionalism was at Wisconsin, its leading center was actually Columbia; and before the sudden recruitment at the end of World War II of a cluster of theoretically-oriented men (Vickrey, Stigler and myself) there was almost a vacuum in Columbia research and instruction on the theoretical side. J. M. Clark (a most distinguished mind whose personals shyness prevented him from being a major influence in face-to-face contact) was a distinguished theoretical thinker, but regarded himself as an institutionalist and had little curricular influence. Hotelling, who was just leaving at the time I came in 1946, was the nearest thing to an active theorist.

A merger of the theoretical and institutionalist schools began to shape up during the 1930’s and was to a considerable extent accomplished during and just after World War II. The terms of merger were much like those for the two meetings of Quakers in New York City, who obviated what might have been an awkward problem of merging properties by having each member of one meeting become a member also of the other! In the 1940’s and 1950’s, it began to look as if nobody could make a career as theorist without also doubling in some other area, and nobody could make a career as institutionalist without also paying serious attention to the theoretical aspects of his problem. But in the end the merger turned out to be slanted in favor of the theorists: it is again possible to make a career by pursuing problems that are trivial variations on theoretical themes; and large elements of the institutional side of economics are allowed to die out. Students doing quantitative work with data have no tradition of asking what their numbers mean in the context of wider social processes and problems.

At Columbia, the tradition that study of law-cases is one important way to understand the economic subject-matter is preserved chiefly by the fortunate fact that we have Dewey teaching “industrial organization”. Economic history was allowed to die out; and while at present we have in assistant professors Edelstein and Passell two excellent specimens of economic historians who are also competent theorists and econometricians, we have no assurances that economic history will not again be blanked out. Some institutional aspects of “economics of human resources” are very much alive in the labor workshop; but large parts of that tradition (including the tradition of trying to understand trade unions and more generally economic organizations other than business firms) seem to have evaporated. History of thought as an approach to economics is now represented almost entirely by Alexander Erlich (who is also our only member who is expert in Marxist economics and in the functioning of European communist economies). While in terms of professional fashions the lack of “institutionalist” instruction will not cause us to lose face in the profession, we should ask whether in bringing up a new generation of economists we should be willing to see the positive aspects of the institutionalist tradition simply evaporate.

The other major aspect of economics which is disregarded in the COI report — though in fact it absorbs much of our staff manpower and is of fundamental importance for many of our students, especially from overseas — is concern with the world outside the United States. We are seriously understaffed in the pivotal area of formal economics of international-trade-and-finance, where Ronald Findlay is saddled with both the responsibilities handled by Kenen and those which were handled by Hirschman. The problems of economic development (or its lack) in the world’s poor countries need and get a lot of attention. [Incidentally, since USA is rapidly evolving “backwards” into a state of underdevelopment, the insights one gets in studying Latin America or Asia become disconcertingly applicable at home!]

The presence at Columbia of a cluster of “regional institutes” has had an important impact on our work in economics. On the whole, the Department has resisted successfully pressures to recruit people who were expert on some “region” but lacked general professional competence. [Before Riskin fortunately turned up, we were under pressure to recruit an economist who combined Chinese language and willingness to function largely as librarian a combination of qualifications which didn’t seem to coexist with all-round professional competence. Bergson, who for years was our “Soviet specialist” was also a distinguished welfare-theorist. Erlich was originally recruited on “soft money” to be an East-Central-Europe specialist; when Bergson left, there was a closing-of-ranks operation which gave him the Russian field —  and it has turned out that his knowledge of Marxist economics and of economic thought, and the fact that he is regularly sought out by East European visitors in USA make him a major factor of general departmental strength. At present the nearest equivalents of “mere” area specialists are Issawi (who also handles general instruction in economics in the School of International Affairs, and a good deal of development-and-history work at the dissertation stage), Nakamura and Riskin — all men of great general usefulness. The roles of European and Latin American “regional specialists” are filled by two of our senior general economists —  Barger and myself.

While one could imagine a budgetary situation such that one must recommend reducing to a token scale a University’s involvement in this area (except for basic international-trade-and-finance courses), it is hard to believe that Columbia specifically should withdraw from this kind of work. Surely the economic profession in USA has as part of its responsibility an understanding of the economic processes of other countries. [True, I have heard Milton Friedman say that to have a different economics for Brazil as against USA makes no more sense than to have a different science of chemistry; but he simply disregards the ethnocentric character of the economics which inward-looking economists develop for USA, and ignores the risk that what passes for “general economic law” may turn out to be a series of adhockeries concocted to be plausible for a very special and perhaps transitory state of society.] This responsibility surely comes home to Columbia. For one thing, New York is the natural focus of such work, what with its outward-looking tradition and the presence of the UN. Besides, we incur a special responsibility because we have so many overseas students. I would add that to educate overseas students too exclusively in economics-for-USA is dysfunctional: one of the major handicaps of development has been the attempt of US-trained economists overseas to apply Keynesian remedies to unemployment problems of non-Keynesian type, for example.

Economics and the SIA [School of International Affairs]

If the University were very strong financially, it seems to me plain that one would recommend developing the Economics Department in a way that would greatly strengthen the general work on international relations and on the understanding of societies outside USA which is represented by the School of International Affairs. The SIA could advantageously be much more of a research body and center of workshop activity.

I would not recommend developing an economics department within the SIA (even if SIA eventually develops a distinct and separately-recruited faculty, which I don’t think I would recommend either). To set up standards of recruiting, teaching and publication for “SIA economists” that will pass muster with the general profession is an essential safeguard, and the generally low standards of economic thinking in the UN and in overseas universities outside Europe, Japan and Australasia should be a warning that a separate international economics might not be a genuine “discipline”. But it will be a major defeat if Columbia cannot maintain and improve its standard of keeping a stable of economists for whom understanding of outside economies (and especially of the economies of poor countries) is a major concern.

A question which interacts with this, of course, is whether the SIA can develop its own sources of financing, as seemed so probable a few years ago. If not, the general financial debility of the University will mean that we must stop far short of optimum in the whole area represented by SIA, and hence also on its economic side. Specifically, it may make a great difference whether or not SIA can finance workshop activity in this area, and make a role for research posts for young economists (for example, teaching two-thirds time in the Department and working one-third-time-plus-summer in a research branch of SIA).

If the University’s policy toward economics is primarily to develop its mathematical-economics core, the contribution the Department can make on the SIA side may suffer. And reciprocally, failure to develop strength on this side may be a handicap to SIA in its efforts to get backing for a really strong program.

A postscript on professional life-cycles

One of the most valuable pieces of education I picked up in my earlier years at Columbia was a comment by Isador Rabi at a University Seminar about the problems of a field like physics where the most impressive men “peak” very young and the work regarded as important by the profession is done largely by youngsters. It would be a tremendous waste to throw men on the scrap-heap after their “peak” years, or to regard them as living on the benefits of tenure, as non-producers, for most of their profession lifetimes. The solution, Rabl indicated, was surely to be found in an appropriate division of labor between colleagues at different stages of life-cycle, working out what economists call an area of comparative advantage for the older men.

The COI report seems to me to ignore this problem, and to frame problems as if we could hope to recruit good men between age 25 and age 30 and have them conveniently remove themselves (suicide recommended?) along about age 40 — significant activities being described as those appropriate to men aged 25-40. In good part, I think the “problem” of life-cycle (once recognized) and the “problems” of maintaining strength in institutional economics and in the development/regional areas exist largely because we don’t integrate our approaches to different aspects of economics work. To a considerable degree, the natural life-cycle of the economist is to be obsessed with very abstract problems in youth, and mature into a person more concerned with and more knowledgeable about the real world. To a very large degree, the staffing of the institutional fields and of the SIA-type activities should then be handled by shifting over of people who have graduated from being pure theorists. If we don’t do this, the channels of recruiting and promotion for the continuation of the supposedly -central mathematical-economics core are apt to get clogged. It is very tricky to suppose that giving tenure to a theoretically creative young man is to acquire forty years of theoretically creative activity. Most of the relevant people have their key ideas very young, and develop them as fully as is profitable by age 40. If they continue to preempt the key teaching roles in these fields, they will keep the young from advancing and will impair the freshness of the curriculum offered to graduate and undergraduate students. [It was because of this view that I allowed myself to be pushed out of micro-teaching by Becker and Co. in the early 1960’s.] But to suck the tenured men out of these lines and make room for their successors, a Department needs a lot of roles for the maturing older man. Unless we can do well with the institutional and SIA aspects of the field, I conclude, we can’t do well in the long run with the “core” aspects.

Source: Columbia University Libraries, Manuscript Collections. Joseph Dorfman Collection, Box 13 (Columbia University-teaching, etc.); Folder “Economic H…P…”

Image Source:  Obituary in The Columbia Spectator, October 3, 1997.

Categories
Columbia Monetary economics Suggested Reading Syllabus

Columbia. Reading List for Monetary Economics. Angell, 1954-1955

In 1954-55 the executive officer of the department of economics, Arthur R. Burns [not Arthur F. Burns], requested his colleagues provide current reading lists for their courses to Joseph Dorfman to arrange for the library to order as many titles as possible. James Waterhouse Angell (Harvard Ph.D., 1924) obliged for his courses on monetary economics (see below), international monetary policy, and income, employment and international trade.

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Other blog posts for
James Waterhouse Angell

James W. Angell’s 1921 Ph.D. application at Harvard.

James W. Angell’s Columbia University appointment, 1924.

Reading list for James W. Angell’s 1933 Money and Banking course at Columbia (found in Milton Friedman’s papers)

Reading list for James W. Angell’s 1933 International Economics course at Columbia (found in Milton Friedman’s papers).

James W. Angell’s 1943 report to the Harvard Class of 1918.

_______________________________

Course Announcement

Economics 121-122—Monetary economics. Professor Angell.
M. W. 10. 310 Fayerweather.

The part played by money and banking operations in the structure and movements of the general economic system. The development of monetary theory. Saving, investing, and employment. Keynesian and neo-Keynesian analysis. Current problems of monetary and general fiscal policy.

Source: Columbia University, Bulletin of Information, 54th Series, No. 23 (June 19, 1954). Announcement of the Faculty of Political Science for the Winter and Spring Sessions 1954-1955, p. 35.

_______________________________

December 15, 1954

TO: MEMBERS OF THE DEPARTMENT OF ECONOMICS

FROM: Arthur R. Burns

Will you please send to Professor Dorfman your lists of readings with recent amendments including optional readings, in order that he may endeavor to arrange for the library to have as many as possible of the books that are being recommended. Please also forward requests for future additions to the library to Professor Dorfman.

*  *  *  *  *  *  *  *  *  *  *  *  *

ECONOMICS 121-122
READING LIST
in

MONETARY ECONOMICS

Note: Eligible veterans may purchase at government expense any four books marked “V”.

1954

*  *  *  *  *  *  *  *  *  *  *  *  *

ECONOMICS 121
REQUIRED READING

(References are to numbered sections in Reading List.)

First Semester

Section:

I (If necessary)
II-1 (Outside reading)
IV-1 (Partly for discussion in class, as indicated)
V-1 (Outside reading)

Second Semester

Section:

III (Outside reading, as indicated)
IV-2 (Partly for discussion in class, as indicated)
V-2 (Outside reading)
VI-1 (Outside reading)
VII (Look into several of the books)

*  *  *  *  *  *  *  *  *  *  *  *  *

READING LIST IN MONETARY ECONOMICS

Required reading should if possible be read in the order in which the titles are presented.

I. INTRODUCTORY

(Students who have had little or no previous work in Money and Banking are advised to read at least one title in each group.)

1. General Texts

Chandler, L. V., Economics of Money and Banking (1953). “V”

James, F. C.: Economics of Money, Credit and Banking (3rd edition, 1940)

Kent, R. P.: Money and Banking (1951). “V”

Thomas, R. G.: Our Modern Banking and Monetary System (1950), Chapters 1-30. “V”

2. Other References

Chandler, L. V.: Introduction to Monetary Theory (1940)

Mitchell, W. C.: Business Cycles (Volume I, 1927) Chapter 2

Robertson, D. H.: Money (2nd edition, 1929)

II. MONETARY AND BANKING ORGANIZATION OF THE U.S.

1. Required Reading

Thomas, R. G.: Our Modern Banking and Monetary System (1950), Chapters 18, 19

Kent, R. P.: Money and Banking (1951), Chapters 20-22,26-28

Burgess, W. R.: The Reserve Banks and the Money Market (Revised edition, 1946)

Board of Governors of the Federal Reserve System, Banking Studies (1941), Chapters 3, 17

Angell, J. W.: The Behavior of Money (1936), Chapters 1-4

Goldenweiser, E. A.: Federal Reserve Objectives and Policies (AER, June, 1947)

Thomas, W.: The Heritage of War Finance (AER, Proceedings, May, 1947)

Board of Governors, Federal Reserve System: Federal Reserve Policy (Post-War Economic Studies, No. 8: 1947)

Goldenweiser, E. A., American Monetary Policy (1951)

2. Other References

Beckhart, B. H., ed.: The New York Money Market (4 volumes, 1931-32)

Board of Governors, Federal Reserve System: Federal Reserve Bulletin (current issues)

_________________: The Federal Reserve System (1939)

_________________: Post-War Economic Studies (published serially)

Crawford, A. W.: Monetary Management under the New Deal (1940)

Currie, L.: The Supply and Control of Money in the U. 5. (1934)

Dewey, D. R.: Financial History of the U. S. (1903)

Federal Reserve Bank of New York: Monthly Review

Hardy, C. O.: Credit Policies of the Federal Reserve System (1932)

Harris, S. E.: Twenty Years of Federal Reserve Policy (2 volumes, 1932)

Hepburn, A. B.: History of Currency in the U. S. (2nd edition, 1924)

Jacoby, N. H. and Saulnier, R. J.: Business Finance and Banking (1947)

Johnson, G. G., Jr.: The Treasury and Monetary Policy, 1933-38 (1938)

Macaulay, F. R.: Interest Rates, Bond Yields end Stock Prices in the U.S. Since 1856 (1938)

Mints, L. W., History of Banking Theory (1945) (U.S. and U.K.)

Mitchell, W. C.: History of the Greenbacks (1903)

National Monetary Commission: Reports (1910, 1911): includes volumes on various phases of money, banking and related legislation in the U.S.

Paris, J. D.: Monetary Policies of the U.S., 1932-1936 (1938)

Riefler, W. W.: Money Rates and Money Markets in the U. S. (1930)

Saulnier, R. J., and Young, R. A.: Finance and Credit in the American Economy, 1900-1944 (1946)

U. S. Government Printing Office: Federal Reserve Act of 1913, with Amendments and Laws Relating to Banking (1940)

Westerfield, R. B.: Historical Survey of Branch Banking in the U.S. (1939)

_________________: Our Silver Debacle (1936)

Whitney, C.: Experiments in Credit Control: The Federal Reserve System (1934)

III. MONETARY AND BANKING ORGANIZATION IN OTHER COUNTRIES

(Select and read enough to understand the general organization and history of at least one country.)

Andreades, A.: History of the Bank of England (2nd edition, 1934)

Arnold, A.T.: Banks, Credit and Money in Soviet Russia (1937)

Bagehot, W.: Lombard Street (14th edition, 1915)

Brown, W. A., Jr.: England and the New Gold Standard (1929)

Clapham, Sir John: The Bank of England (1944)

Conant, C. A.: History of Modern Banks of Issue (6th edition, 1927)

Dacey, W. M.: The British Banking Mechanism (1951)

Dulles, E. L.: The French Frano, 1914-1928 (1929)

Dupriez, L. H.: Monetary Reconstruction in Belgian (1947)

Feaveryear, A. S.: The Pound Sterling (1931)

Flink, S.: The Geran Reichsbank (1931)

Harris, S. E.: Monetary Policies of the British Empire (1931)

Hawtrey, R. G.: A Century of Bank Rate (1936)

Higgins, B. H.: Canada’s Financial System in War (National Bureau of Economic Research, 1944)

Holladay, J.: The Canadian Banking System (1938)

Hubbard, L. E.: Soviet Money and Finance (1936)

King, W. T. C.: History of the London Discount Market (1936)

League of Nations: Gold Delegation: Reports, etc. (1930, ff.)

_________________: Money and Banking (periodically, 1931 ff.)

Madden, J.T., and Nadler, M.: International Money Markets (1935)

National Monetary Commission: Reports (1910, 1911): includes volumes on a series of foreign systems

Northrop, M. B.: The Control Policies of the German Reichsbank, 1924-1933 (1938)

Plumptre, A. F. W.: Central Banking in the British Dominions (1940)

Rogers, J. H.: The Process of Inflation in France, 1914-1927 (1929)

Sayers, R. S.; Modern Banking (1947). Chiefly on England

Shepherd, H. L.: The Monetary Experience of Belgium, 1914-1936 (1936)

Whale, P. B.: Joint Stock Banking in Germany (1930)

Willis, H. P.: Theory and Practice of Central Banking (1939)

Willis, H. P., and Beckhart, B. H., eds.: Foreign Banking Systems (especially on Great Britain and Canada) (1929)

IV. THE GENERAL RELATIONS BETWEEN THE MONETARY AND BANKING SYSTEM AND ECONOMIC ACTIVITY

1. Required Reading (First Semester)

(In approximate order. Titles marked with asterisk (*) should be prepared for discussion in class.)

*Layton, Sir W. T.: Introduction to the Study of Prices (3rd ed., 1938) (skim)

*Fisher, Irving: The Purchasing Power of Money (2nd ed., 1926) (skim)

*Keynes, J. M.: Monetary Reform (1924), Chapters 1 and 3 (Section 1)

Angell, J. W.: Theory of International Prices (1926), pp. 116-135, 178-186, 274-280, 308-312, 324-331

_________________: The Behavior of Money (1936), Chapters 5, 6

Ellis, H. S. German Monetary Theory, 1905-1933 (1934), Chapters 8-11

Hawtrey, R. G.: The Gold Standard in Theory and Practice (5th edition, 1947). “V”

*Hawtrey, R. G.: The Art of Central Banking (1932), Chapter 4

*_________________: Currency and Credit (3rd edition, 1927), Chapters 1-4, 10, 11

*Keynes, J. M.: Treatise on Money (2 volumes, 1930), Chapters 9-14, 30, 35-37

Klein, L. R.: The Keynesian Revolution (1947), Chapter l (on Keynes’ Treatise). “V”

Robertson, D. H.: Essays in Monetary Theory (1940), Chapters 1, 4-6, 11

*Hicks, J. R.: A Suggestion for Simplifying the Theory of Money (Economica, February, 1935) (Reprinted in Am. Econ. Assoc., Readings in Monetary Theory, 1951)

*Keynes, J. M.: The General Theory of Employment, Interest and Money (1936). “V”

2. Required Reading (Second Semester)

Haberler, G.: Prosperity and Depression (1946), Chapter 8. 3rd edition 1941. “V”

Hansen, A. H.: Full Recovery or Stagnation (1938), Part IV

*_________________: Fiscal Policy and Business Cycles (1941), Part III. “V”

Wilson, T.: Fluctuations in Income and Employment (1942), Part I

*Burns, A. F.: Economic Research and the Keynesian Thinking of our Times (National Bureau of Economic Research, 1946)

*Hicks, J. R.: Value and Capital (1939), Chapters 9-14, 19, 23. “V”

*Lerner, A. P.: The Economics of Control (1946), Chapters 21-25. “V”

*Angell, J. W.: Investment and Business Cycles (1941), Chapters 9-11, 13. “V”

*Hansen, A. H.: Economic Policy and Full Employment (1947); Chapters 11-19

Klein, L. R.: The Keynesian Revolution (1947), Chapters 3, 4 (only pp. 110-123), 6. “V”

Harris, S. E., ed.: The New Economics (1947), Chapters 4, 9, 14, 31, 37

Ellis, H. S., ed.: Survey of Contemporary Economics (1948), Chapter 9 (article by H. H. Villard, “Monetary Theory.”) “V”

Modigliani, F.: Fluctuations in the Saving-Income Ratio (in National Bureau of Economic Research, Studies in Income and Wealth, Vol. 11, (1949), Part V)

Samuelson, P. A.: Interactions of the Multiplier Analysis and the Principle of Acceleration (RES, May 1939; reprinted in Am. Econ. Assoc., Readings in Business Cycle Theory)

3. Other Preferences

American Economic Association, Readings in Business Cycle Theory (1944), especially Chaps. 5-9, 12, 15, 17

_________________: Readings in Monetary Theory (1951), especially Chaps. 7, 11, 13, 17. “V”

_________________: Readings in Price Theory (1952), especially Chaps. 14, 15

American Economic Review: Proceedings (May, 1948): papers on Keynes

Angell, J. W.: Keynes and Economic Analysis Today (Rev. Econ. Stat., November, 1948)

Clark, J. M.: Alternatives to Serfdom (1948), Chapter 4

_________________: Economics of Planning Public Works (1935)

Domar, E. D.: Expansion and Employment (AER, March, 1947)

_________________: The Problem of Capital Accumulation (AER, Dec. 1948)

Duesenberry, James F.: Income, Saving and the Theory of Consumer Behavior (1949)

Durbin, E. M.: Purchasing Power and Trade Depression (1934)

Eisner, R.: Underemployment Equilibrium Rates of Growth (AER, Mar. 1952). On papers by Domar and Schelling in this Section.

Ellis, H. S., ed.: Survey of Contemporary Economics (1948), Chapters 2, 5

Fellner, W.: Monetary Policies and Full Employment (1946)

_________________: The Robertsonian Evolution (AER, June 1952)

_________________: and Somers, H. M.: Alternative Monetary Approaches to Interest Theory (RES, Feb. 1941)

Gayer, A. D.: Monetary Policy and Economic Stabilization (2nd edition, 1937)

_________________, ed.: Lessons of Monetary Experience (1937)

Halm, G.: Monetary Theory (1942). Second edition 1946

Hansen, A. H., Monetary Theory and Fiscal Policy (1949)

Hart, A. G.: Anticipations, Uncertainty and Dynamic Planning (1940)

Hawtrey, R. G.: A Century of Bank Rate (1938)

Hayek, F.: Prices and Production (2nd edition, 1935)

_________________: The Pure Theory of Capital (1941)

Henderson, H. D.: The Significance of the Rate of Interest (Oxford Economic Papers, October, 1938). Also see articles in later issues on interest rates and liquidity preference.

Kuznets, S.: National Product Since 1869 (1946)

Lange, O.: Price Flexibility and Employment (1944)

_________________: The Theory of the Multiplier (Econometrica, July-October, 1943)

Lange, O., et al., eds.: Studies in Mathematical Economics and Econometrics (1942; in memory of Henry Schultz) papers by Lange, Mosak, Samuelson, Hart, Tinbergen

Lundberg, E.: Studies in the Theory of Economic Expansion (1937)

Machlup, F.: International Trade and the National Income Multiplier (1943)

Mack, R. P.: The Direction of Change in Income and the Consumption Function (RES, November, 1948)

Marshall, A.: Money, Credit and Commerce (1923)

Modigliani, F.: Liquidity Preference and the Theory of Interest and Money (Econometrica, January, 1944)

Myrdal, G.: Monetary Equilibrium (1939)

Niebyl, K. H.: Studies in the Classical Theory of Money (1946)

Nussbaum, A.: Money in the Law (1939). 1950 edition

Ohlin, B.: The Stockholm Theory of Savings and Investment (EJ, 1937; reprinted in Am. Econ. Assoc., Readings in Business Cycle Theory, 1944)

Pigou, A. C.: Employment and Equilibrium (1941)

_________________: Lapses from Full Employment (1945)

Robinson, Joan: Introduction to the Theory of Employment (1939; expanded 1949)

Robertson, D. H.: Banking Policy and the Price Level (2nd edition, 1932)

_________________: Saving and Hoarding (EJ, September, 1933)

Rueff, J.: The Fallacies of Lord Keynes’ General Theory (QJE, May 1947)

Samuelson, P. A.: The Principle of Acceleration and the Multiplier (JPE, Dec. 1939)

_________________: Interactions between the Multiplier and the Principle of Acceleration (RES, May, 1939; reprinted in Am. Econ. Assoc., Readings in Business Cycle Theory, 1944)

Saulnier, R. J.: Contemporary Monetary Theory (1938)

Schelling, T.: Capital Growth and Equilibrium (AER, Dec. 1947). On paper above by Domar

Schumpeter, J. A.: Theory of Economic Development (1934)

Symposium: Five Views on the Consumption Function (Rev. Econ. Stat., November, 1946)

Temporary National Economic Commission: Saving and Investment (Hearings, Part 9: 1939)

Terborgh, G.: The Bogey of Economic Maturity (1945)

Tinbergen, J.: Some Problems in the Explanation of Interest Rates (QJE, May, 1947)

Villard, H. H.: Deficit Spending and the National Income (1941)

Viner, J.: Studies in the Theory of International Trade (1937), Chapters 3-7

Wicksell, K.: Interest and Prices (English edition, 1936)

_________________: Lectures on Political Economy, Volume II: Money (1935); also VoI. I, Introduction

Williams, J. H.: An Appraisal of Keynesian Economics (American Economic Review, Proceedings, May, 1948)

Wood, E.: English Theories of Central Banking Control, 1819-1858 (1938)

Wright, D. McC.: The Economics of Disturbance (1947)

V. BUSINESS CYCLES

(Also see references in Section IV)

1. Required Reading (First Semester)

Mitchell, W. C.: Business Cycles: The Problem and Its Setting. Volume I (1927), especially Chapters 1, 2, and 5

Clark, J. M.: Strategic Factors in Business Cycles (1934), especially pp. 1-22, 96-123, 167-183

Ellis, H. S.: German Monetary Theory, 1905-1933 (1934); Part IV

Amer. Econ. Assoc.: Readings in Business Cycle Theory (1944), Chaps. 1, 15, 17, 21. “V”

Haberler, G.: Prosperity and Depression (1946), Part I

2. Required Reading (Second Semester)

Haberler, G.: Prosperity and Depression (1946), Part III

League of Nations: Economic Stability in the Post-War World (1945), Section I. “V”

Schumpeter, J.: Business Cycles (1939), Chapter 4

Hicks, J. R.: Value and Capital (1939), Chapter 24

Angell, J. W.: Investment and Business Cycles (1941), Chapters 7, 8, 12

Hansen, A. H.: Fiscal Policy and Business Cycles (1941), Parts I, III

Wilson, T.: Fluctuations in Income and Employment (1942), Part II (on the U.S. 1919-1937)

Metzler, L. A.: Business Cycles and the Modern Theory of Employment (AER, June 1946)

Burns, A. F., New Facts on Business Cycles (National Bureau of Economic Research, Annual Report, 1950), Part I

3. Other References

Achinstein, A.: Introduction to Business Cycles (1950)

Burns, A. F.: Production Trends in the U. S. since 1870 (1934)

Burns, A. F., and Mitchell, W. C.: Measuring Business Cycles (1946)

_________________: Hicks and the Real Cycle (JPE, Feb. 1952)

Frickey, E.: Economic Fluctuations in the U. S., 1866-1914 (1942)

Harrod, R. F.: The Trade Cycle (1936)

_________________: Notes on Trade Cycle Theory (EJ, June 1951)

Hicks, J. R.: A Contribution to the Theory of the Trade Cycle (1950)

Kaldor, N.: A Model of the Trade Cycle (EJ, 1940)

_________________: Mr. Hicks on the Trade Cycle (EJ, Dec. 1951)

Kalecki, M.: Essays in the Theory of Economic Fluctuations (1939)

Knight, F. H.: The Business Cycle, Interest and Money (RES, May, 1941)

Robbins, L.: The Great Depression (1934)

Röpke, W.: Crises and Cycles (1936)

Salant, W.: Foreign Trade Policy in the Business Cycle (in C. J. Friedrich and E. S. Mason, eds., Public Policy, 1940, vol. II)

Tinbergen, J.: Statistical Testing of Business-Cycle Theories (2 volumes, 1939)

Tinbergen, J., and Polak, J. J.: The Dynamics of Business Cycles (1950)

VI. CURRENCY AND EXCHANGE DEPRECIATION:
INTERNATIONAL MONETARY POLICIES

1.  Required Reading

Gayer, A. D.: Monetary Policy and Economic Stabilization (2 ed., 1937), Chapters 1-8

Hansen, A. H.: Full Recovery or Stagnation? (1938), Chapters 10-15

Gilbert, M.: Currency Depreciation (1939), Chapters 3, 5, 6

League of Nations: Economic Stability in the Post-War World (1945), Chapter 17

Hansen, A. H.: America’s Role in the World Economy (1945), Apps. A and B. “V”

Nurkse, R.: Conditions of International Monetary Equilibrium (1945) (reprinted in Am. Econ. Assoc., Readings in Intl. Trade, 1948)

_________________: Domestic and International Economic Equilibrium (in S. E. Harris, ed., The New Economics, 1947)

Robinson, Joan: Introduction to the Theory of Employment (1939; reprinted 1947), Chapter on The Foreign Exchanges

2. Other References

Angell, J. W.: Theory of International Prices, Chapters 7, 17 (1926)

Bloomfield, A. I.: Operations of the American Exchange Stabilization Fund (RES, May, 1944)

Bresciani-Turroni, C.: The Economics of Inflation (1937) (On Germany, 1914-24)

Brown, W. A., Jr.: The International Gold Standard Reinterpreted, 1914-1934 (2 volumes, 1944)

Cassel, G.: The Downfall of the Gold Standard (1936)

_________________: Money and Foreign Exchange After 1914 (1922)

Dulles, E. L.: The French Franc, 1914-1928 (1929)

Dupriez, L. H.: Monetary Reconstruction in Belgium (1947)

Ellis, H. S.: Exchange Control in Central Europe (1941)

Graham, F. D.: Exchanges, Prices, and Production in Hyper-Inflation: Germany, 1920-1923 (1930)

Gregory, T. E.: The Gold Standard and Its Future (1932)

Hall, N. F.: The Exchange Equalization Account (London, 1935)

Harris, S. E.: Exchange Depreciation (1926)

Heilperin, M. A.: International Monetary Economics (1939), Chapters 3, 6, 9

League of Nations: The Course and Control of Inflation (1946) (Experience after World War I)

_________________: International Currency Experience (1944)

Leavens, D. H.: Silver Money (1939)

Li, C. M.: Theory of International Trade under Silver Exchange (QJE, Aug. 1939)

Patterson, G.: Survey of U. S. International Finance (annual, 1950 ff.)

Sayers, R. S.: Modern Banking (1947), Chapters 7, 8

Southard, F. A., Jr.: Some European Currency and Exchange Experiences, 1943-1946 (1946)

U. S. Tariff Commission: Foreign Trade and Exchange Controls in Germany (1942), pp. 1-34

U. S. Treasury Department: Articles of Agreement: International Monetary Fund and International Bank for Reconstruotion and Development (1944)

Waight, L.: The Exchange Equalization Account (1939)

Westerfield, R. B.: Our Silver Debacle (1936)

Whittlesey, C. R.: International Monetary Issues (1937)

Williams, J. H.: Post-War Monetary Plans (1944)

VII. CURRENT PROBLEMS IN THEORY AND POLICY

(These references are in large part supplementary to the more recent among the titles in Section IV, above. Look into a number of them, and read carefully what interests you.)

Beveridge, Sir W.: Full Employment in a Free Society (1945)

Board of Governors, Federal Reserve System: Post-War Economic Studies (published at intervals)

Brunner, K.: Inconsistency and Indeterminacy in Classical Economics (Econometrica, Apr. 1951). On Patinkin papers listed below

Buchanan, N. S.: International Investment and Domestic Welfare (1945)

Chandler, L. V.: Federal Reserve Policy and the Federal Debt (AER, 1949; reprinted in Am. Econ. Assoc., Readings in Monetary Theory, 1951)

Clark, C.: The Economics of 1960 (1944)

Cohen, M.: Postwar Consumption Functions (RES, Feb. 1952)

Fisher, A. G. B.: International Implications of Full Employment (1946)

Fisher, Irving: 100 Per Cent Money (2 ed., 1936)

Friend, Irving: Personal Savings in the Post-War Period (Survey Current Bus., Sept. 1949 and Suppl., 1950-51

_________________ and Bronfenbrenner, J.: Business Investment Programs and their Realization (Survey of Current Business, Dec. 1950)

Hansen, A. H.: Classical, Loanable-Fund and Keynesian Interest Theories (QJE, Aug. 1951)

_________________: Income, Employment and Public Policy (1948) (Essays in honor of Hansen)

Harrod, R. F.: Toward a Dynamic Economics (1948)

International Labor Office: Public Investment and Full Employment (1946)

Lerner, A. P.: The Economics of Employment (1951)

Liu, T. C. and Chang, C. G.: U.S. Consumption and Investment Propensities (AER, Sept. 1950)

Millikan, M. F., ed.: Income Stabilization for a Developing Democracy (1953)

Morishima, M.: Consumer’s Behavior and Liquidity Preference (Econometrica, Apr. 1952)

Norton, F. E.: Capital Theory and Progressive Equilibrium (AER, Papers and Proc., May 1951)

Oxford University, Institute of Statistics: The Economics of Full Employment (1944). A symposium

Patinkin, D.: Relative Prices, Say’s Law and the Demand for Money (Econometrica, Apr. 1948)

_________________: The Indeterminacy of Absolute Prices in Classical Economic Theory (Econometrica, Jan. 1949)

_________________: The Invalidity of Classical Monetary Theory (Econometrica, Apr- 1951)

Robinson, Joan: Collected Economic Papers (1951). Parts I-III

Rosa, R.: The Revival of Monetary Policy (RES, Feb. 1951)

Schelling, T. C.: The Dynamics of Price Flexibility (AER, Sept. 1949). And see replies by Patinkin and Klein in AER, Sept. 1950

Tobin, J.: Monetary Policy and the Management of the Public Debt: The Patman Inquiry (RES, May 1953)

Tsiang, S. C.: Accelerator, Theory of the Firm and the Business Cycle (QJE, Aug. 1951). On Kaldor and Samuelson

United Nations: National and International Measures for Full Employment (Report by a group of experts: 1949)

_________________: Measures for International Economic Stabilization (Report by a group of experts: 1951)

Williams, J. H.: Money, Trade and Economic Growth (1951). (Essays in honor of Williams) Part III

*  *  *  *  *  *  *  *  *  *  *  *  *

1954-55

ECONOMICS 121-122

Add the following titles:

Sec. II-2:

Bach, G. L: Federal Reserve Policy-Making (1950).

Brandt, Harry: U.S. Monetary and Credit Policies, 1945-50 (unpubl. Ph.D. dissertation, Columbia 1954).

U.S. Congress: Joint Committee on the Economic Report: Monetary, Credit and Fiscal Policies (1949: U.S. Cong. 81:1).The Patman-Douglas Report. On the Federal Reserve, esp. Chap. II; on fiscal policy, Chap. XI.

Sec. IV-2:

Hansen, A. H.: A Guide to Keynes (1953), Chap. 7.

Sec. VII:

Abramovitz, M.: Economics of Growth (in: Survey Contemp. Econ., vol. II; ed. B. F. Haley, 1952).

Ferber, R.: Aggregate Consumption Functions (Natl. Bur. Econ. Res., Tech, Paper #8; 1953).

Friedman, Milton: Essays in Positive Economics (1953), Part III.

Hubbard, J.C.: The Marginal and the Average Propensity to Consume (QJE, Feb. 1954).

Kalecki, M.: Theory of Economic Dynamics (1954).

Kuznets, S.: The Proportion of Capital Formation to National Product (AEA, Proc., May 1952).

Mack, Ruth P.: Economics of Consumption (Survey Contemp. Econ., vol. II; ed. B. F. Haley, 1952).

Yeager, L. B.: Some Questions about Growth Economics (AER, March 1954).

Source: Columbia University Libraries, Manuscript Collections. Joseph Dorfman Collection, Box 13 (Columbia University – teaching, etc.) in an unlabeled folder.

Image Source: Harvard Class of 1918, Twenty-fifth Anniversary Report. Cambridge: 1943, pp. 24-26.