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Chicago. Economics Ph.D. Alumnus Simon James McLean, 1897

It all began as a humble search for a single mosaic tile — where did Simon James McLean study before going to the University of Chicago and becoming one of its first four Ph.D.’s in Political Economy? Before getting an answer to that question, I uncovered many other details of a life begun in Brooklyn (1871) with first academic degrees from the University of Toronto (A.B., 1894; LL.B., 1895), then A.M. at Columbia (1896) and finally Ph.D. from the University of Chicago (1897).

After getting the Ph.D. McLean’s career literally went south, namely to the University of Arkansas (1897-1902), then west to Stanford (1902-05), and then back north to the University of Toronto (1906) at the age of 35.

From the University of Chicago’s registers of its Ph.D’s. for the years 1921, 1931, and 1938 I discovered that McLean morphed from a leading academic light regarding the economics of railroad regulation into a policy mover-and-shaker on the Board of Railway Commissioners for Canada (1908-1938). The man covered a lot of territory in his life.

But wait, there’s more. While on McLean’s trail through Fayetteville, Arkansas, I came across the course descriptions at the University of Arkansas for economics and sociology that included his textbook choices. Since there is no indication of anyone else offering any of these courses, it would appear the young professor had a teaching load for each semester of 14 hours per week. I think it is reasonable to assume that his choices of topics and texts represent an average of his own earlier coursework at Columbia and Chicago. I have added links to all the texts given in the course descriptions.

 

Sources:

Theses of the University of Chicago, Doctors of Philosophy. June 1893—December 1921. Chicago: Harper Memorial Library, University of Chicago.

University of Chicago Announcements, Register Number, Doctors of Philosophy. June, 1893—April, 1931. Chicago: University of Chicago Press, pp. 122-127.

University of Chicago Announcements, Register of Doctors of Philosophy. Jan, 1893—April, 1938. Chicago: University of Chicago Press, pp. 139-144.

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McLean, Simon James.
University of Chicago thesis (1897):
The railway policy of Canada.

McLean’s Ph.D. thesis does appear to have been published as such. However, he did write a series of articles for the Journal of Political Economy that together account for much of his dissertation work.

An early chapter in Canadian railroad policy. Journal of Political Economy, Vol. 6 (June 1898), 323-352.
Canadian railways and the bonding question. Journal of Political Economy, Vol. 7 (September 1899), pp. 500-542.
The railway policy of Canada, 1849 to 1867: I. Journal of Political Economy, Vol. 9 (March 1901), pp.
The railway policy of Canada, 1849 to 1867: II. Journal of Political Economy, Vol. 9 (June 1901), pp. 351-383.

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Arkansas University.—Dr. Simon James McLean has been appointed Professor of History and Political Economy at the University of Arkansas. He was born at Brooklyn, N.Y., June 14, 1871. After passing through the public schools of Quebec and Cumberland, Canada, and the Ontario Collegiate Institute of Ottawa, he entered the Toronto University. Here he obtained the degree of A.B. in 1894 and that of LL.B. in 1895. He then pursued further graduate studies at Columbia, receiving his A.M. in 1896, and at Chicago, where, in 1897, he obtained the degree of Ph.D. In the same year he was appointed Professor of Economics and Sociology at the University of Arkansas. Professor McLean has published:

“Tariff History of Canada.” University of Toronto Studies, 1895. Pp.53.
“The University Settlement Movement.” Canadian Magazine, March, 1897,
“Early Railway History of Canada.” Ibid., March, 1899.
“Early Canadian Railway Policy.” Journal of Political Economy, June, 1898.
“Canadian Railways and the Bonding Question.” Ibid., September, 1899.

 

Source: The Annals of the American Academy of Political and Social Science, Vol. 14 (September 1899) p. 64 [page 220 in printed volume].

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Course offerings in economics and sociology at the University of Arkansas
1899-1900

ECONOMICS AND SOCIOLOGY.
S. J. McLean, Professor.

 

The courses offered in this department are designed to afford such instruction as will be advantageous to those who intend to enter public life, or those callings which will bring them closely in touch with the activities of citizenship. Course 1 is required before more advanced courses in this department are taken.

  1. Principles of Economics (both terms)……….2

Recitations, prescribed readings, reports and debates. Text-book: Walker, Political Economy [3rd edition, 1888 ].

  1. Industrial History of America and Europe since 1763 (first term)……….3

The leading industrial facts of this period are considered, including panics and trusts. A detailed study of some of the more important industries will also be made. Lectures, reports, and prescribed readings. Selected portions of Rand’s Economic History [Selections Illustrating Economic History since the Seven Years’ War 3rd ed., 1895]will be studied.

  1. Banking (first part of second term)……….3

The principles of Banking and the history of Banking Systems. [Chapters on the theory and history of banking. 1st ed., New York and London: G. P. Putnam’s Sons, 1891. ] Lectures, recitations, reports, and readings. Text-book: Dunbar, Chapters in the Theory and History of Banking.

  1. Money (latter part of second term)……….3

The principles of Money and the history of Monetary Systems are considered. [From 1898-99 Catalogue: “Text-books: Walker and Jevons” [Francis A. Walker, Money (1878). William Stanley Jevons, Money and the mechanism of exchange (1875).]

  1. Tariff History and Problems (first term)……….2

United States, England, France and Germany. Special attention will be devoted to the tariff history of the United States. Text-book: Taussig, Tariff History of the United States. [1888] This will be supplemented by lectures and use of government documents.

  1. History of Economic Thought, from Plato and Aristotle to the Present (second term) ……….2

Text-book: Ingram’s History of Political Economy [1887]; supplementary readings and reports will also be required.

  1. Public Finance (first term)……….3

Principles and history of taxation, management of public debts, consideration of governmental activities, etc. Text-book: Plehn, Introduction to Public Finance [1896]. Lectures, readings and use of government documents.

  1. Transportation. Its History and Problems (second term)……….3

The economic aspects of water transportation, the great lakes, canal systems, and the Mississippi; the evolution of the railroad system, railroad geography, state versus private ownership, methods of government control, railroad finances, etc. Lectures, prescribed readings, and use of original material. Text-book: Hadley, Railroad Transportation. [1885]

  1. Principles of Sociology (first term)……….2

This course considers the elements and conditions of social growth and progress. Recitations, lectures and reading of assigned chapters in Spencer’s Principles of Sociology [Vol. 1, Vol. 2, Vol. 3.] and in Gidding’s Principles of Sociology [1896]. Text-book: Fairbanks’s Introduction to Sociology [1896].

  1. Problems of Social Growth (second term)……….2

Trade-unionism, arbitration and conciliation, socialism, communism, co-operation and profit-sharing. Lectures and reports. For reference: Ely, The Labor Movement in America [1886], and Ely, French and German Socialism [1883].

  1. Commerce (first term)……….2

Theory of foreign commerce; investigation of the commercial resources of the leading countries of the present. Students will be expected to acquaint themselves with the United States Consular Reports. Text-book: Chisholm, Smaller Commercial Geography [1897 Handbook of Commercial Geography.].

  1. Labor Legislation (second term)……….2

History and critical investigation of the attitude of the State towards Labor; apprenticeship laws, combination laws, trade union recognition, factory legislation, etc. For reference, Stimson, Handbook to the Labor Law of the United States. [1896]

 

Source: Catalogue of the University of Arkansas, 1899-1900. Fayetteville, Ark., pp. 77-79.

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PROF. M’LEAN [sic] RESIGNS
HEAD OF ECONOMICS DEPARTMENT TO GO TO TORONTO.

Will Leave Stanford in January to Take Professsorship in Economics of Commerce and Transportation.

Professor Simon James McLean, present head of the Department of Economics, has tendered his resignation and will leave Stanford at the end of the present semester. He goes to accept the professorship of economics of commerce and transportation at the University of Toronto in Canada. Professor McLean has been contemplating this step for some time, as, aside from the fact that the work at Toronto will be along lines offering him better opportunities for advancement, the call from his alma mater was one which he felt he could not refuse. Dr. Jordan has accepted Professor McLean’s resignation and in his letter accepting it speaks as follows: “We recognize your ripe scholarship, your high ideals in education, your calmness of judgment, and your possession of those traits of character and thought which mark the gentleman among other men. As a teacher in a line of work so much afflicted by hasty judgment, by sensationalism and emotionalism, you have always held the attitude of a careful and patient investigator, one of the most solid and accurate within the range of my acquaintance.” It is still too early for any definite statement regarding the filling of Professor McLean’s place in the Department of Economics, as he will continue in charge of his classes until the twenty-second of December. Professor McLean came to Stanford in 1902 from the University of Arkansas, where he was professor of economics and sociology. He took his A. B. at the University of Toronto in 1884 and his degree of LL.B. in 1895 from the same university. The degrees A. M. from Columbia and Ph.D. from Chicago came in 1896 and 1897. Professor McLean is a recognized authority on the subject of railway rates, and has been a member of several special commissions appointed by the government to investigate conditions along this line.

 

Source: The Stanford Daily, Vol. XXVII, Issue 66, November 28, 1905.

 

 

 

 

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Berkeley Chicago Economists

Chicago. Economics Ph.D. Alumnus Henry Rand Hatfield, 1897

Henry Rand Hatfield (1866-1945) was among the first four Ph.D.’s in Political Economy at the University of Chicago in 1897. The following items present a reasonably complete picture of the life and career of this scholar. Numbers people can be sorted into accountants and statisticians. In the early years of graduate economics education they shared the same tidal pool on the eve of their respective evolutionary development paths. Hatfield had a long and distinguished career in accounting. Of particular interest to historians of economics is his paper “An Historical Defense of Bookkeeping,” originally published in The Journal of Accountancy, April 1924.

For an appreciation of his contributions to accounting, see the biographical note  from S.A. Zeff and T.F. Keller, eds. Financial Accounting Theory I: Issues and Controversies, Second edition. McGraw Hill, p. 502 (posted at the website Accounting Hall of Fame). 

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660. HENRY RAND HATFIELD.

Brother of Nos. 368 [Emily Marcia Hatfield (Hobart)]  and 389 [James Taft Hatfield].

            Born 27 Nov. 1866, in Chicago. Prepared in Northwestern University Academy. A.B. [Northwestern, 1892]. Ph.D., University of Chicago, 1897. Adelphic. Beta Theta Pi; Phi Beta Kappa. Kirk contestant. Graduate student University of Chicago, 1892-94. Fellow in Political Economy, University of Chicago. Instructor, Washington University, St. Louis, Mo., 1894-96 and 1897-98; Instructor in Political Economy, University of Chicago, 1898-1902; Assistant Professor of Political Economy, and Dean of College of Commerce and Administration, 1902 . Contributor to Journal of Political Economy.

Married Ethel A. Glover, 15 June 1898, at Washington, D. C.

Children—      John Glover, born 24 Jan. 1900.

                       Robert Miller, born 16 Aug. 1902.

Residence, 5825 Kimbark Ave., Chicago, 111.

 

Source: Northwestern University. Alumni Record of the College of Liberal Arts, 1903 (Charles B. Atwell ed.). Chicago: Lakeside Press, 1903, p. 225.

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Henry Rand Hatfield, Accounting: Berkeley and Systemwide

Henry Rand Hatfield was born in Chicago, Illinois, on November 27, 1866, son of Reverend Robert Miller Hatfield and Elizabeth Taft Hatfield; and died on December 25, 1945 in Berkeley, California. He was married to Ethel Adelia Glover in 1898, and is survived by his widow and two children, John Glover Hatfield and Elizabeth Glover, and six grandchildren. A second son, Robert Miller Hatfield, died in 1927 at the age of twenty-five.

Professor Hatfield attended school in Evanston, Illinois and here, in 1884, he entered Northwestern University. After two years of college he withdrew to take employment in a bond house; but five years later he returned to complete work for a bachelor’s degree. Following this he enrolled at the University of Chicago where he received, in 1897, the degree of Ph.D. His chief college interest was in the classics. He studied economics and political science, however, at Northwestern and Chicago and these studies enabled him to accept an instructorship at Washington University, St. Louis, in 1893. In 1898 he was appointed instructor at the University of Chicago. Two years later, at the suggestion of the University but not at its expense, he visited Germany to observe the organization of business teaching in that country. The University of Chicago had established its College of Commerce and Administration in 1898, the same year in which he had joined its staff, and the survey of German practice was undertaken in the interest of this technical program. In 1902 he was appointed assistant professor and dean of the new college, serving until 1904.

His connection with the University of California began in 1904, when he was appointed Associate Professor of Accounting. Five years later, he was appointed Professor of Accounting and Secretary of the College of Commerce. In 1916 his title was changed to Dean of the College of Commerce–a position which he held until 1920. From December, 1915 to June, 1916; from May, 1917 to July, 1918; and from 1920 to 1923, he was Dean, Acting Dean, and Dean of the Faculties. As Dean of the Faculties he served as the principal administrative officer under the President of the University. As Secretary and Dean of the College of Commerce, he was able, during eleven years, to guide the development of the expanding College of Commerce. Emphasis upon sound fundamental training, broad, rather than highly specialized instruction, and insistence upon intellectual discipline were characteristics of his plans. In his capacity as teacher, he conducted classes in geography, economics, banking, international trade, and business organization, as well as in accounting and finance; but after 1917 he confined himself to accounting and finance. Perhaps his greatest interest was in the elementary course in accounting, in his advanced seminars in accounting problems, and in the history of accounting. In all he achieved more than ordinary results.

During World War I Professor Hatfield was on leave from the University of California from July, 1918 to June, 1919. For most of this time he was Director of the Division of Planning and Statistics of the War Industries Board–a responsible position in which his technical competence, his administrative ability, and his skill in establishing friendly relations with his associates, were displayed. After the War Industries Board ceased operations he remained in Washington for a few months as expert with the Advisory Tax Board, discussing the formulation of government policy during the period immediately following the war.

His friends and associates will always remember him as a shrewd, witty, and affectionate person, endowed with a breadth of interest which caused him to be helpful to many people in many ways. This was true of community and church matters to which he gave his time, and of University affairs in which he played a significant and sometimes a very influential role. His permanent reputation will, however, rest upon his contributions to accounting and to the accounting profession.

His contribution to the profession includes organization work of the first quality assisting in the reorganization of the State Board of Accountancy, and in the formation of the California State Society of Certified Accountants soon after he arrived in California. These new or revived institutions introduced new methods into local practice at a time when the morale of California accountants was at its lowest ebb.

His ideas upon accounting were even more significantly expressed in written form. Here his major work was the volume Modern Accounting, published in 1908, repeatedly reprinted, and in 1927 rewritten and enlarged under the title of Accounting, its Principles and Problems. Before 1908, when Modern Accounting was first issued, almost nothing above the level of discussion of technical rules and perfunctory procedures had been written on the subject for many years; Hatfield’s original and systematic discussion has been described as a white light in a previously rather dark landscape. By 1927 the situation had changed somewhat; but his fuller treatment was again welcomed with appreciation and respect, and the later volume has preserved its significance during the following years. In 1938 and 1940 he rounded out his contribution by preparing considered statements of accounting principles in collaboration with other writers.

Besides these major works, Professor Hatfield exerted influence through a long succession of reviews and articles providing selective, constructive, and critical discussion of accounting principles as they were stated and restated in England and in the United States over more than two decades. His concise and vigorous style, his clarity of thought and tinge of humor, and his practice of restricting each article to the consideration of a few points enlarged the impact of his ideas upon the accounting and legal professions for which he wrote.

Finally, and this amounted to more than a diversion in his long career, Professor Hatfield maintained a consistent interest in the history of his subject, which resulted in the accumulation of a substantial body of little-known material and in the publication of many articles. In this work he benefited from the classical training of his early days. It is probably safe to say that he was the best informed scholar on the history of accounting in the United States and perhaps in any country. His persistent historical studies and his sound general knowledge enabled him to trace the beginnings of practice and of theories upon which modern systems have been built. It is a loss to economic and to cultural history that the fruits of his research were never gathered together and comprehensively set forth.

Professor Hatfield, at one time or another, was president of the American Association of University Instructors in Accounting, vice president of the American Economic Association, delegate of the United States Government to the International Congress on Commercial Education, and Honorary Member of the California Society of Certified Public Accountants. From 1923 to 1928 he was Senator of Phi Beta Kappa. In 1928 Beta Alpha Psi, the national accounting fraternity, gave him an award for the most outstanding contribution to the literature of accountancy for that year. He was Dickinson lecturer at Harvard in 1942. He received the LL.D. degree from Northwestern University in 1923 and from the University of California in 1940. In conferring this last degree President Sproul referred to him as a “constant champion of the logical approach, the sane view, and the clear disclosure of the essential facts of goods and proprietorship; discoverer of scientific principles and sound philosophy in a field obscured by dogma and convention; one able to find life and even humor in the dust of ledgers.” The essential modesty of the man was a quality which endeared him to his friends, but it will be pleasant to remember that he received during his life some of the recognition which he so richly deserved.

Academic Senate Committee Stuart Daggett Ira B. Cross Lucy Ward Stebbins

 

Source: 1945, University of California: In Memoriam, pp. 98-102.

 

Image Source: Website Berkeley Heritage, Henry Rand Hatfield house (Berkeley’s Northside), 2695 Le Conte Ave. at La Loma, 1908.

 

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Chicago Economists Funny Business M.I.T. Undergraduate

Chicago. Paul Samuelson’s 50th Class Reunion Questionnaire, 1985

For his 50th class reunion Paul A. Samuelson filled out the following one page questionnaire. Besides revealing the youthful musical taste of this Chicago educated Wunderkind, Samuelson’s responses sometimes even illustrate his writing style (e.g. 7 8/9 grandchildren). I was most struck by his declared favorite professor during these formative years. Guess, then read.

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CLASS OF 1935 SURVEY

Your former classmates are interested in what you’re doing.

 

Name Paul A. Samuelson                Maiden Name [blank]

Address MIT E52-383

City/State/Zip Code Cambridge, MA 02139

Your past and present occupation and employer Professor of Economics, Massachusetts Institute of Technology

Anything you wish to mention about your job Overpaid/underworked

Spouse’s name and occupation Risha Samuelson, Painter

No. of children 6       No. of grandchildren 7 8/9            No. of great-grandchildren [blank]

Degrees received and institutions attended AB U of C 1935; AM 1936, Ph.D. Harvard 1941, 2 dozen honorary degrees, including Chicago

Favorite class and professor at the University, and why Henry Simons, Economics! Great economist, great person.

Most rewarding, exciting, or unusual experience as a student Being reborn as a scientist-scholar

Most memorable moments since graduation Nobel Prize, 1970; birth of triplets, 1953; first-born, 1946

Favorite song or band of the ‘30s Wayne King, Hal Kemp, Paul Whiteman

Other affiliations (clubs, professional associations, political parities) [blank]

Have you received any civic, community, or academic honors? Yes

Accomplishments, interests, hobbies that you find especially significant Tennis

Future plans Economic writing

Please share any other information that your classmates may find interest I was given a great education, in the Midway’s golden age

 

Please return this form by April 15, 1985. You may attach an additional sheet if needed. Mail to: Reunion ’85 Network, 5757 S. Woodlawn Avenue, Chicago, IL 60637

[pencil note: Sent 2/22-85]

 

Source: David M. Rubenstein Rare Book & Manuscript Library, Duke University. Paul A. Samuelson Papers, Box 4, Folder “Personal”.

Image Source:  Henry Calvert Simons. University of Chicago Photographic Archive, apf1-07614, Special Collections Research Center, University of Chicago Library.

Categories
Chicago Economists

Chicago. Memorandum on a Fiscal Stimulus, 1932

Today’s post is a jewel of fiscal policy thought in a memorandum from the University of Chicago written in 1932 at the trough of the Great Depression in the United States. Looking at the signers of the memorandum that argues for aggressive fiscal stimulus (economists covering the ideological spectrum from Aaron Director through Paul Douglas), one is reminded of Ben Bernanke’s bon mot from the last big financial crisis: “There are no atheists in foxholes or ideologues in a financial crisis”.

Note: Bernanke’s crack appears to be a minor variation on Jeffrey Frankel’s twist.

Backstory

After WWI, veterans lobbied for “adjusted compensation” to partially make up the difference between their combat pay and the significantly higher wages that had been paid to workers at home during the War. Veterans preferred the term “adjusted compensation” to the term “bonus” (the latter term being construed as implying something that goes beyond full and fair compensation). In 1924 veterans were finally granted “adjusted universal compensation” in the form of certificates that credited $1.25 for each day served abroad plus $1.00 for those days served in the U.S. These certificates were essentially 20-year insurance policies equal to 125% of the service credit to be redeemed in full on the veteran’s birthday in 1945. (Exceptions for immediate cash payments were granted for amounts less than $50 and in order to settle estates of deceased veterans for payments of less than $500). More details can be found at this link. 

In 1932 the question arose whether an early payout of these certificates would be a prudent and effective fiscal stimulus and Congressman Samuel Barrett Pettengill (Democrat) of Indiana sent the questionnaire that follows to academic economists across the country to solicit their advice in the matter.

A month later protesting “Bonus Marchers” (ca 20,000 veterans) set up camps in Washington, D.C. that they were evicted from by regular troops of the U.S. Army let by General Douglas MacArthur. It wasn’t until 1936 that the WWI veterans were paid their adjusted compensation.

Responses to Congressman Pettengill’s inquiry were published in the Hearings of the House Committee on Ways and Means for:

Edwin Walter Kemmerer,  Princeton University
Frank Whitson Fetter, Assistant Professor of Economics, Princeton University
Thomas Nixon Carver, Professor of Economics, Harvard University
S. J. Coon, Dean of the College of Business Administration, University of Washington
Harry E. Miller, Professor of Economics, Brown University
C. W. Hasek, Head of the Department of Economics and Sociology, Pennsylvania State College
Walter W. McLaren, Department of Economics, Williams College
Harry L. Severson, Assistant Professor, Department of Economics and Sociology, Indiana University
Hiram L. Jome, Professor of Economics, DePauw University
Warren B. Catlin, Department of Economics and Sociology, Boudoin College
E. E. Agger, Professor of Economics and head of the Department of Economics, Rutgers University
Edwin R. A. Seligman, Columbia University
H. A. Millis et al., Department of Political Economy, University of Chicago
Jacob H. Hollander, Johns Hopkins University
William C. Schleter, University of Pennsylvania
Albert Bushnell Hart, Harvard University (historian)

 Today’s post begins with the cover statement of the memorandum found with the copy in the Papers of the President of the University of Chicago, Robert Maynard Hutchins, Box 72.  It is followed by Congressman Pettengill’s list of questions, as well as the Chicago memorandum submitted by H. A. Millis and eleven of his University of Chicago colleagues.

A cursory sweep of the web discovered that this Chicago memorandum has been reprinted as Appendix B in J. Ronnie Davis’s 1967 Virginia Ph.D. dissertation, “Pre-Keynesian economic policy proposals in the United States during the Great Depression.” A scanned version of the Congressional Hearings in which the Chicago memorandum was published can be found at Hathitrust.org. I have compared the published version from the House Ways and Means Committee Hearings with the typed copy filed with the papers of President Hutchins at the University of Chicago Archives. Other than minor differences in spelling (e.g. the capitalized form “Federal” is used in the published version), the memorandum was published by the House Ways and Means Committee exactly as received.

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A MEMORANDUM PRESENTED TO A MEMBER OF THE HOUSE COMMITTEE ON MILITARY AFFAIRS, APRIL 26, 1932.

Two members of the staff of the Department of economics, at the University of Chicago, received letters from a member of the House Committee on Military Affairs, requesting answers to certain questions. Inasmuch as the views of a large number of economists were desired, the letter was circulated among and read by twelve men of the Chicago faculty; and steps were taken to prepare a memorandum covering the points raised….The memorandum, with the names of the twelve professors participating in its formulation, is reproduced in its entirety. Because of the character of the issues raised, it seemed better to prepare the memorandum in the form it has taken than to answer the specific questions, the one after the other.

Source: University of Chicago Archives. Hutchins Box 72. Folder 6 “Economics Department, 1932-1933”.

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STATEMENT OF HON. SAMUEL B. PETTENGILL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF INDIANA

Mr. Pettengill. Mr. Chairman, I am not on the calendar this morning and therefore in justice to those who are here I have asked for only one minute.

Some time ago, before I knew when the Ways and Means Committee was to have hearings on this matter, on my own initiative I sent a questionnaire to 50 of the leading economists of the country on the Patman and the Thomas bills; also with reference to the benefit of “reflation” and the danger of inflation.

I have a very interesting file here, including letters from Mr. Kemmerer and Mr. King who have appeared before the committee.

In order to shorten the record as much as possible, I have briefed the replies somewhat. The entire letters, of course, are available.

[…]

Mr. Pettengill. Mr. Chairman, as I have stated, I endeavored to get the benefit of the best and most disinterested economic thought of the country with reference to the advisability of either borrowing money or printing money with which to liquidate the adjusted service certificates. In the main, I sent my letters to the economics department of our leading colleges and universities. In order to make their replies more intelligible to you, as many of them answered numbered questions in my letter, I attach, first, my original letter.

(The letter referred to is as follows:)

Dear Sir: I am writing you and other leading economists in the country with reference to the problem confronting Congress with regard to the proposed payment of the soldiers’ bonus. I trust that I will be able to secure a symposium of opinion by authorities such as yourself which will be of real value to Congress.

As you know, at the end of this fiscal year we will have an accumulated deficit of some $3,000,000,000. It is, I think, the largest peace-time deficit of any country in the world. It is rapidly getting larger. We are going into the red now $7,000,000 a day. United States obligations have recently sold below 85.

On the other hand, commodity, wage, land, and security prices are slowly drifting to levels so disastrous that they threaten the most widespread repudiation of debts and tax defaults, which may wipe out, along with the debtors, classes holding the obligations of individuals, corporations, States, and municipalities now totaling some one hundred fifty to two hundred billion dollars, which is about one-half the Nation’s wealth. For example, the conservative Washington Post, April 11, said:

“The dollar increases in value every day … unless this vicious movement is checked it will result in panic. The extension of credit will not be sufficient. Heroic emergency measures that will arrest the fall of prices seem to be in order. … This economic malady has reached a point where it can not be expected to cure itself without leaving horrible scars. … Some powerful agency must be thrown into the breach to restore the value of goods and services against this exaggerated value of money. … Emergencies of this kind call for drastic action. … It is time for the leaders in Government and financial circles to focus their minds upon realignment of values. The people would not countenance the manufacture of fiat money to make prices rise, But some method of currency expansion on a sound gold basis may be necessary.”

            The question is the advisability of paying the so-called soldiers’ bonus as an antideflationary, inflationary, “reflationary” or stabilizing measure. The name, of course, is not important.

A number of different bills have been proposed. H. R. 1, introduced by Mr. Patman, of Texas, calls for borrowing the $2,400,000,000 necessary to make payment.

  1. Do you think we can, or should, borrow this?

Sentiment here, however, is crystallizing around (for or against) Mr. Patman’s substitute, H. R. 7726; I inclose copy.
This bill simply proposes to print money to pay the debt. Is this sound, advisable, or defensible, in view of the existing emergency? And in the light of present gold reserves?

 It has been suggested that it could be strengthened as follows:
Call in the outstanding adjusted-service certificates now redeemable in 1945. Collateralize them together with 40 per cent gold which is said to be now available over and above the amount necessary for circulation now outstanding. Issue currency against this hypothecation and pay the veterans off. Then set up a sinking fund to retire the currency (together with the certificates) in whole or in part in 1945, or gradually before that time.

With reference to “excess reserves” see Federal Reserve Bulletin, March, 1932, page 143: “On the basis of these excess reserves, the Federal reserve banks could issue $3,500,000,000 of credit if the demand were for currency and $4,000,000,000 if it were for deposits at the reserve banks.”

  1. What credit do you give this statement as a basis for the proposed bonus payment?

There are, of course, all sorts of social and political features around this problem, but I direct your attention to its economic and fiscal aspects. It is a problem of the most tremendous consequences and Members here who are patriotically trying to do their best to cut the present vicious circle for the good of the entire country (not the veterans alone) need, and will appreciate, the advice of men like yourself, whose life study makes your judgment so valuable.

  1. Is the suggested alternative sound?
  1. Does it in reality add any element of safety to H. R. 7726, the outright issue of nonretirable currency?
  1. Can it be improved? If so, how?
  1. It is said the Europe holds $2,000,000,000 of deposits in this country. With their experience with “printing-press” money, would they become frightened for the solvency of the dollar, and cause disastrous liquidation and withdrawals here in America? Could such liquidation of foreign-held obligations be stopped unless we “went off gold,” or had available the precautionary device of authorizing the Treasury to change the amount of gold in our dollar along the lines advocated by Irving Fisher? If foreign exchange began to go against us, would it help Europe pay us her public and private debts, as an offset against our investment and deposit obligations held by Europeans?
  1. Would the introduction of $2,400,000,000 new currency into the pockets of the people necessarily result in the rise of commodity and other levels thus causing merchants to place orders for the products of farm and factory, thus starting production and accelerating employment?
  1. The Glass-Steagall bill, as you know, for the period of one year, authorized placing 60 per cent Government bonds plus 40 per cent gold behind Federal reserve money. This, of course, as I understand it, is 60 per cent “greenbackism,” placing one promise to pay (Government bond) behind another promise to pay (currency) to the extent of 60 per cent. Assuming that the adjusted-service certificates are also promises to pay, can the Glass-Steagall bill and the suggested method of handling the payment of the bonus be distinguished, from the standpoint of soundness?

The Glass-Steagall bill, as it appears to me, does not seem to have stopped the deflationary trend, for the reason that its potential currency expansion is based upon borrowing, and banks and individuals are not borrowing (or lending).
Recently I have heard Willford I. King, professor of economics, New York University, testify before the House Banking and Currency Committee. Although not directing his particular attention to the “bonus” he was quite clear that the currency must be expanded at the present time in order to start commodity prices upward and permit debts and taxes to be paid, as well as to start buying, and employment. However, he was equally clear that for such currency something of equal value should be taken in by the Government, e. g., Government bonds, thus temporarily substituting noncirculating certificates of indebtedness (bonds) for circulating certificates (currency). Then, he said, when commodity prices reach the desired level, e. g., 1926 commodity index, the process would be reversed, the bonds resold, and the currency retired. It was his opinion that such a device is necessary in order to stop the elevator at the right floor—i. e., prevent inflation beyond a certain point.
Neither the Patman nor the suggested alternative plan seems to me to contain this safeguard. That is, the adjusted-compensation certificates when once taken in would not be available for reissue.

            I need not state that every member here is anxious to solve the problem, not from the standpoint of helping the needy veteran and his family at the expense of the rest of the community, but only from the standpoint of benefiting the entire Nation, on the theory that a distribution to the veteran would, of course, be passed on at once in the payment of taxes, interest, land contracts, doctors’ and merchants’ bills, etc., and with the expectation that this would stop and reverse the trend of values. If the plan or any other conceivable plan at this time would bring only disaster to the Nation and thus to the veteran and his family we have no alternative except to wait until the present economic storm blows over.

Your thoughtful consideration of this matter is most earnestly requested. Your prompt reply will be a distinct public service.

I desire, of course, to use the substance of your reply, but will not quote you, by name, without your permission. Please let me know if you do give this permission.

Sincerely yours,

Samuel B. Pettengill, Member of Congress.

 

Source:  U. S. Congress (Seventy-Second Congress, First Session). Payment of Adjusted-Compensation Certificates in Hearings before the Committee on Ways and Means, House of Representatives (April 11 to 29, and May 2 and 3, 1932),pp. 508, 511-513

______________________________

 

The University of Chicago,
Department of Economics,
April 26, 1932.

Hon. Samuel. B. Pettengill,
            House Office Building, Washington, D. C.

My Dear Mr. Pettengill: The inclosed memorandum has been prepared in an attempt to answer the questions put in your letter of April 13. It has been developed in a committee of two, in conference, and in round table. It is approved by all of the University of Chicago economists who participated in the discussion and formulation; their names appear at the end of the memorandum.

It has seemed better to answer your questions in a memorandum divided into five sections rather than to answer them specifically, the one after the other. I think all of your questions, save that relating to Professor King’s testimony, are answered. No direct reference is made to King’s position because it has seemed better to take a positive stand rather than to criticize.

You ask permission to use the replies to your questions. This is, of course, granted, but our preference would be to have the whole rather than a part of the memorandum given publicity.

Trusting that the memorandum will be of some assistance to you, I am

Very truly yours,

H. A. Millis.

 

(The memorandum referred to follows:)

I.

Severe depression and deflation can be checked, and recovery initiated, either by virtue of automatic adjustments, or by deliberate governmental action. The automatic process involves tremendous losses, in wastage of productive capacity, and in acute suffering. It requires drastic reduction of wage rates, rents, and other “sticky” prices, notably those in industries where readjustments are impeded by monopoly and exceeding politeness of competition. It must also involve widespread insolvency and financial reorganization, with consequent reduction of fixed charges, in order that firms may be placed in position to obtain necessary working capital when and where expansion of output becomes profitable. Given drastic deflation of costs and elimination of fixed charges, business will discover opportunities for profitably increasing employment, firms will become anxious to borrow, and banks will be more willing to lend.

As long as wage cutting is evaded by reducing employment, and as long as monopolies, including public utilities, resist pressure for lower prices, deflation may continue indefinitely. The more intractable the “sticky” prices, the further credit contraction will go, and the more drastic must be the ultimate readjustment. We have developed an economy in which the volume and velocity of credit is exceedingly flexible and sensitive, while wages and pegged prices are highly resistant to downward pressure. This is at once the explanation of our plight and the ground on which governmental action may be justified. Recovery can be brought about, either by reduction of costs to a level consistent with existing commodity prices, or by injecting enough new purchasing power so that much larger production will be profitable at existing costs. The first method is conveniently automatic but dreadfully slow; and it admits hardly at all of being facilitated by political measures. The second method, while readily amenable to abuse, only requires a courageous fiscal policy on the part of the central government.

(We agree entirely with your remarks as to the inadequacy of the Glass-Steagall bill and similar expedients. Little is to be gained merely by easing the circumstances of banks, in a situation where, by virtue of cost-price relations, everyone, including the banks, is anxious to get out of debt. Such measures may retard deflation and prepare the way for recovery; but they cannot much mitigate the fundamental maladjustments between prices and costs.)

II.

If action is needed to raise prices (and we believe it is), it should take the form of generous Federal expenditures, financed without resort to taxes on commodities or transactions. For the effect on prices, the direction of expenditure is not crucially important. Heavy Federal contribution toward relief of distress is the most urgent and, for reflation, perhaps the most effective measure. Large appropriations for public and semipublic improvements are also an attractive expedient, provided projects are chosen which can be started quickly and opportunely stopped. Generous bonus legislation would be the most objectionable of all available devices for releasing purchasing power. Purchase of the certificates at their present value, instead of at maturity value, is perhaps relatively unobjectionable.

Bonus legislation invites comparison with a program of Federal subsidy to agencies engaged in administering emergency relief. Both measures involve a sort of outright gift, the provision of funds to individuals or for their support. One involves allocation according to need, when need is dreadfully acute; the other ignores this criterion completely. Furthermore, funds spent for relief would certainly be spent for commodities, and very promptly, while less needy veterans might only use additional cash further to increase hoarded savings. Of the possible consequences of bonus concessions for the future of pension legislation, mere reminder should suffice. Congress has already capitulated to the veterans and their votes on the grounds that the Treasury was full, and the community prosperous. It is now on the verge of capitulating again, on the grounds that the Treasury is empty, and the community impoverished.

III.

It is impossible to estimate in advance how much Federal expenditure might be required to bring genuine revival of business. We are persuaded, however, that the automatic adjustments have already proceeded to a stage where the necessary inflationary expenditures would be handsomely rewarded, in greater production, larger employment, and higher tax revenues.

One should recognize at the outset a danger that any measures of fiscal inflation may be too meager and too short lived. Inadequate, temporary stimulation might well leave conditions worse than it found them. We might experience temporary revival and then serious relapse, followed by more drastic deflation than would otherwise have been necessary. If we indorse inflation, we should be prepared to administer heavy doses of stimulant if necessary, to continue them until recovery is firmly established, and to discontinue them when the emergency is ended. It is obvious that the bonus measures fail utterly to provide this necessary flexibility.

IV.

The question of how emergency expenditures, for whatever purposes, should be financed, is difficult and highly controversial. The wisest policy for the present, however, would seem to be one guided largely by psychological considerations. It is likely that adequate stimulus could be imparted, and recovery assured, without creating an excessive drain upon our gold reserves. Inflationary measures, in whatever form, will probably accelerate for a time the export of gold; but this strain we may well be able to endure until revival of business is assured. Domestic hoarding of gold, on the other hand, might force us to suspension of our currency laws; and this possibility dictates caution as to the technique of inflation. The problem is simply that of selecting the procedure which will be least alarming.

On other grounds, the issue of greenbacks seems most expedient; but this method must be ruled out unless one is ready to abandon gold immediately, for it would create the greatest danger of domestic drain. Large sales of Federal bonds in the open market would be much less alarming; but the probable effect upon the prices of such bonds must give us pause, especially since a marked decline might jeopardize the position of many banks. It would certainly be better for the Government to sell new issues directly to the reserve banks or, in effect, to exchange bonds for bank deposits and Federal Reserve notes. Much may be said, indeed, for issuing the bonds with the circulation privilege, thus permitting the Reserve Banks to issue Federal Reserve Bank notes in exchange; for this procedure does not much invite suspicion, has supporting precedent, and would greatly reduce the legal requirements with respect to gold.

It is well to face the possibility, though it seems remote, that adequate fiscal inflation might force us to abandon gold for a time. We must be prepared to see a sort of race between depletion of the gold holdings of the reserve banks and improvement of business. If definite business revival is attained before the gold position becomes acute, the hoarders will have missed some great investment bargains; if inflation must be carried beyond the limits tolerated by gold, the hoarders will reap a profit. Moreover, if other gold-standard countries follow our example, as is quite probable, the threat to our adherence to the gold standard will prove negligible.

But we would insist again that, once deliberate reflation is undertaken, it must be carried through, whatever that policy may mean for gold. To withdraw artificial support before genuine recovery is achieved, might create a situation worse than that which would have obtained in the absence of remedial efforts. If the time comes, as it probably will not, when we must choose between recovery and convertibility, we must then abandon gold, pending the not distant time when world recovery will permit our returning to the old standard on the old terms. The remote possibility of our being forced to this step, however, should not influence our decision now. The supposedly awful consequences of departure from gold are, as England has shown us so clearly, nothing but fantastic illusions.

V.

It is easy to be too greatly alarmed about the possibility of extreme and uncontrolled inflation. With improvement of business, Federal revenues will automatically increase. Expenditures may then be financed to a lesser extent by borrowing, and thus with less inflationary influence. Indeed, one might maintain that temporary inflation is the most promising means to restore a balanced Budget. Moreover, with proper precautions, it should not be difficult to effect drastic reduction of expenditures at the appropriate time. The emergency character of inflationary appropriations should be emphasized in the acts themselves; and Congress should record the intention of balancing expenditures and revenues over a period of, say four or five years. Incidentally, no emergency expenditures would permit of more opportune retrenchment than those for relief of distress.

We find it difficult, at the present juncture, to give due attention to the problem of preventing or modifying the next boom. Obviously, we should attend to getting out of the present emergency first. It demands emphasis, however, that successful resort to fiscal methods for terminating deflation will present the very serious problem of keeping recovery within safe bounds. A merely salutary inflation treatment will fail to satisfy many groups. There will certainly be demand for more inflation and more “prosperity” than we can afford or sanely endure. Fiscal inflation must be regarded as a means for meeting an acute emergency for industry as a whole. It should not be viewed as a means of solving the agricultural problem, nor as a method for deflating the rentier. It is properly a most temporary expedient, to be abandoned (and reversed) long before many individual industries and classes have obtained the measure of relief which justice might prescribe.

We have suggested that for the period of the ensuing five years all Federal expenditures, including those of an emergency character, should be covered by tax revenues. To minimize the total necessary outlay, outlays should be very generous now; parsimonious inflation is an illusory economy. It would also be eminently wise to avoid now any new taxes which fall at the producer’s (or dealer’s) margin. The levies on income, however, should be advanced immediately to the maximum levels which an imperfect, but improving, administrative system can support. While such levies will be rather unproductive for a time, they will have no very deterrent effect upon business; and, having gotten them into the statutes during a period of least political resistance, we may be assured of large revenues at the appropriate time. Even after recovery, additional commodity taxes should be resorted to only if more equitable levies prove inadequate to full completion of the “5-year plan.” Indeed, by 1940, our Federal debt should stand at a figure far below that contemplated by existing legislation. We should have high income taxes when incomes are high.

Sound fiscal management during the next few years should give close attention to indexes of production, employment, and wholesale prices. We shall not undertake at this time to indicate any definite rules. There is no immediate problem of excessive inflation—rather, a danger of doing nothing or of a too modest beginning. For the not distant future, however, most careful and intelligent management will be imperative. Once there is clear evidence of revival, of increased and profitable production, the mechanism of credit expansion will begin to operate, and to carry on the task which fiscal inflation has begun. As soon as this happens, retrenchment must be started; emergency expenditures must be reduced as rapidly as is possible without undermining recovery. We should not attempt, by deliberate inflation, to bring prices to any level which we choose to regard as normal; nor should artificial stimulus be continued until production and employment attain really satisfactory levels. Fiscal measures should only be used to give to recovery a sure start. When this is done, the real task will be that of preventing the recovery from becoming a boom; and a beginning must be made in this task long before any alarming signs appear. The seeds of booms are sown by innocent expansion of credit during years of seemingly wholesome revival. The task of control is easily neglected at such times; and there is grave danger that both the Reserve Board and the Treasury will adopt inadequately deflationary tactics in this period when it is so easy to have no policy at all.

In summary, it is our unequivocal position that drastic but temporary fiscal inflation can now be productive of tremendous gains, with no possible losses of compensating magnitude; further, that after genuine revival of business has occurred, and especially if it is attained by artificial stimulation, there will soon be urgent need for prompt and decisive action of a deflationary character.

Garfield V. Cox.         Lloyd W. Mints.
Aaron Director.         Henry Schultz.
Paul H. Douglas.       Henry C. Simons.
Harry D. Gideonse.   Jacob Viner.
Frank H. Knight.       Chester W. Wright.
Harry A. Millis.          Theodore O. Yntem.[sic]

 

Source: U. S. Congress (Seventy-Second Congress, First Session). Payment of Adjusted-Compensation Certificates in Hearings before the Committee on Ways and Means, House of Representatives (April 11 to 29, and May 2 and 3, 1932), pp. 524-527.

Image Source:  Authentic History Center website: Page “Hoover & the Depression: The Bonus Army.”

Categories
Chicago Regulations

Chicago. Memo to M.A. candidates on deadline for theses, 1924

 

 

By itself such an archival artifact from 1924 is just another boring piece of paper. But it is evidence that the search for an optimal deadline to balance the interests of thesis writers with the interests (and capacities) of professors did seem to require an explicit memorandum from the University of Chicago department head to M.A. candidates regarding both deadlines and numbers of copies. This was a time when three copies meant typing with carbon paper, so having the copies due on the day of the oral examination gives us a sense perhaps of just how (ahem) deeply read the M.A. theses were, at least by the non-principal-advisor members of the committees.

______________________________

 

MEMORANDUM TO CANDIDATES FOR THE MASTER’S DEGREE IN THE DEPARTMENT OF POLITICAL ECONOMY
SPRING QUARTER 1924

  1. Theses should be in the hands of the reading committee not later than May 15. An earlier date is much to be preferred since the committee should have ample time for reading the thesis and the candidate should then have time for making any needed corrections. If three copies of the thesis are made available for the reading committee action will, of course, be expedited.
  2. Three typewritten copies of the thesis in its final form are due on the day of the oral examination.
  3. May 30 is the final date for oral examinations. Please arrange an hour with my office.
  4. The committee on your thesis is indicated below:

[blank space: to be filled in]

L. C. Marshall

 

Source: University of Chicago Archives. Economics Department. Records & Addenda. Box 22, Folder 8. Cf. Folder 8 (includes names for committees)

 

Categories
Chicago Funny Business

Chicago. Skit Party’s “Ode to an Economist”, undated

In a filed labeled “Miscellaneous” in the Milton Friedman papers at the Hoover Institution Archives, along with such skit party classics as The Cowles Commission Song and a parody from HMS Pinafore about Milton Friedman, we have the following “Ode to an Economist”. I was able to track down the exact issue of Punch from which the ode was admittedly “stolen”. There is no indication of the identity of the “thief” who purloined the parody.

The original parody appears to have been inspired by a remark attributed to George Joachim Goschen, 1st Viscount Goschen—at least he is quoted before the poem “The Passionate Statistician to His Love”.

The actual poem parodied was written by Christopher Marlowe and first published after his death in 1599.

In this posting you can read (1) the undated, abridged University of Chicago “Ode to an Economist”, (2) the actual parody published in Punch in 1885 and (3) the original love poem “The Passionate Shepherd to his Love.”

_____________________________

ODE TO AN ECONOMIST
[U. of Chicago Economics, undated]

Come live with me, and be my love,
And we will all the pleasures prove
That facts and figures can supply
Unto the statistician’s ravished eye

And we will sit ‘midst faction’s shocks
And calculate the price of stocks,
The music of whose rise and fall
Beats most melodious madrigal.

Percentages shall stir our blood
Analyses as clear as mud.
Oh, if these pleasures may thee move,
Come live with me, and be my love.

The marriage rate, the price of meat,
Shall yield us raptures calm and sweet ;
And analytic Tables be
Prepared each day to give us glee.

Economists our praise shall sing,
The statesman’s eloquence we’ll wing
If these delights thy mind may move,
Then live with me, and be my love.

–stolen from an old Punch

Source: Undated. Hoover Institution Archives. Milton Friedman Papers, Box 79, Folder 6 “University of Chicago Miscellaneous”.

_____________________________

 

The Passionate Statistician to His Love.
[From Punch. March 21, 1885, p. 137]

” For my part, I am a passionate Statistician . . . Go with me into the study of statistics,
and I will make you all enthusiasts in statistics.”

Mr. Goschen at Whitechapel

 

Come live with me, and be my love,
And we will all the pleasures prove
That facts and figures can supply
Unto the Statist’s ravished eye.

And we will sit ‘midst faction’s shocks
And calculate the price of Stocks,
The music of whose rise and fall
Beats most melodious madrigal.

We’ll learn how the last Census closes
And the art of counting noses;
And taste the pleasures, sweetly solemn
Of abstract brief, and lengthy column.

We’ll tot the figures fair and full
Relating to the price of wool,
The annual range of heat and cold,
The death-rate, and the price of gold.

Per-centages shall stir our blood
Analyses as clear as mud.
Oh, if these pleasures may thee move,
Come live with me, and be my love.

The marriage rate, the price of meat,
Shall yield us raptures calm and sweet ;
And analytic “Tables” be
Prepared each day to give us glee.

Economists our praise shall sing,
The Statesman’s eloquence we’ll wing
If these delights thy mind may move,
Then live with me, and be my love.

Source: Parodies of the Works of English and American Authors, Vol. IV. London: Reeves & Turner, 1887, p. 38.

Note:   George Joachim Goschen (1831-1907) was President of the Royal Statistical Society (1886-88).

___________________________________________

 

 

THE PASSIONATE SHEPHERD TO HIS LOVE.
Christopher Marlowe.
[published posthumously, 1599]

Come live with me, and be my love,
And we will all the pleasures prove,
That valleys, groves, and hills and fields,
The woods or steepy mountains yields.

And we will sit upon the rocks,
Seeing the shepherds feed their flocks,
By shallow rivers, to whose falls,
Melodious birds sing madrigals.

And I will make thee beds of roses,
And a thousand fragrant posies;
A cap of flowers and a kirtle,
Embroidered o’er with leaves of myrtle.

A gown made of the finest wool,
Which from our pretty lambs we pull;
Fair lined slippers for the cold,
With buckles of the purest gold.

A belt of straw and ivy buds,
With coral clasps and amber studs;
And if these pleasures may thee move,
Come live with me, and be my love.

Thy silver dishes for thy meat,*
As precious as the gods do eat,
Shall on an ivory table be
Prepared each day for thee and me.

The shepherd swains shall dance and sing,
For thy delight, each May morning;
If these delights thy mind may move,
Then live with me and be my love.

*These three verses are often omitted.

Source: Parodies of the Works of English and American Authors, Vol. IV. London: Reeves & Turner, 1887, pp. 36-37.

 

 

Image: Christopher Marlowe from Wikipedia; right, George Joachim Goschen by Alexander Bassano (ca. 1883), National Portrait Gallery. London.

Categories
Chicago Economic History M.I.T.

MIT. Search for an Economic Historian. 1942

In this 1942 letter from the head of the Industrial Relations Section of the M.I.T. Department of Economics and Social Science, W. Rupert Maclaurin, to the economic historian Earl J. Hamilton of Duke University, we see that hiring a young economic historian was part of the plan “to build one of the leading departments in the country”. Professor Davis Rich Dewey retired in 1940. Courses in economic history were taught in the late 1940s by Karl Deutsch and then by Walt Rostow beginning in 1950. (See Peter Temin, The Rise and Fall of Economic History at MIT, History of Political Economy, Volume 46, Number suppl. 1: 337-350. Earlier and downloadable at MIT Economics Working Paper 13-11, June 5, 2013.)

____________________________

 

MASSACHUSETTS INSTITUTE OF TECHNOLOGY
INDUSTRIAL RELATIONS SECTION

Department of Economics and Social Science
CAMBRIDGE, MASSACHUSETTS

APRIL 8, 1942

W. Rupert Maclaurin
Douglas McGregor
Barbara Klingen Hagen
Beatrice A. Rogers

Douglass V. Brown
Dwight L. Palmer
Charles A. Myers
Paul Pigors

Professor Earl J. Hamilton
Department of Economics
Duke University
Durham, North Carolina

Dear Professor Hamilton:

            At the suggestion of Dr. Arthur Cole I am writing to ask if you know a really promising young man in the field of economic history who might be eligible for an opening that we have here at M. I. T.

            Various members of our Department of Economics are initiating a series of studies which are designed to be of assistance in post-war reconstruction in the United States. These studies are being undertaken with the cooperation of industry and the government, as part of a larger program designed to analyze some of the basic, longer-range problems facing this country. Our group at M. I. T. will be concerned particularly with analyses of the opportunities for industrial development in the post-war world and some of the hindrances and restrictions which have been inhibiting development in the past.

            As part of this general research program, and also of our plans for developing this Department, we would like very much to bring in a promising young economic historian who would be interested in making some historical studies in the general field of industrial development. We should like someone who would co-operate with the “Committee on Research in Economic History” of which Dr. Cole is chairman.

            The administration at M. I. T. is anxious to build up the Departments of Economics and History. These two departments now come under Dr. Robert Caldwell, professor of history and dean of humanities. Whoever we brought in would divide his time to some extent between the Department of History and the Department of Economics.

            Our Economics Department is undergoing substantial change and expansion at the present time, and we are attempting to build one of the leading departments in the country. There should therefore be significant opportunities for professional advancement for promising young men. We started last year a graduate program leading to a Ph.D. degree in industrial economics, and by next year we shall have a group of about twenty graduate students in this Department, primarily on a fellowship basis, from all over the country.

            I know this is a hard time to find talent. We should only be interested in some young man who has an attractive personality, energy, and creative imagination. For this particular position here there is no point in our considering anybody who is not A. We are thinking of a young man under thirty-five who would come to us as an instructor or an assistant professor. The teaching load would be light, and we could arrange for travelling expenses and other research facilities.

            The whole problem of selective service is a very difficult one to deal with under present conditions. As an engineering school with a research program in economics that is closely associated with a number of the leading government agencies in Washington, there is at least a good [chance that the local*] draft boards would grant deferment to a promising instructor in economic history here.

            If you have any suggestions to make, I should greatly appreciate hearing from you.

Yours sincerely,

[signed]
W. Rupert Maclaurin

[*A fold in the letter here covers all but the very top (sometimes bottoms) of the first four words so that I have suggested an interpolation consistent with what I see.]

 

Source: Duke University, Rubenstein Library, Earl J. Hamilton Papers, Box 2, Folder “Correspondence—Misc, 1930’s-1960s and n.d.”.

Image Source: (left) W. Rupert Maclaurin, from MIT Technique, 1944.; (right) Earl J. Hamilton (1937) from John Simon Guggenheim Memorial Foundation website.

Categories
Chicago Funny Business

Chicago. The Cowles Commission Song. Ca. 1950.

Again Economics in the Rear-View Mirror is happy to provide its readers with an undated Chicago economics department parody found in the files of Milton Friedman. While I can say with complete confidence that the Chicago lyrics were written sometime between 1942 and 1955 (when the Cowles Commission moved on to New Haven), I figure this patriotic war-time tune might have declined in popularity and familiarity starting in the late 1940’s. Thus, for the sake of argument, I’ll just say the “Cowles Commission Song” was written ca. 1950.

Thank goodness for both YouTube and Archive.org and of course our old friend Google, I was able to find the original lyrics to the song “We Must Be Vigilant” and links to a movie rendition as well as this recording of the “We Must Be Vigilant” performed by Ziggy Lane and the the Chico Marx Orchestra. That’s right, Groucho’s older brother.

Perhaps someone will rise to the challenge of producing a Karaoke version of this Cowles Commission Song.  Do we historians of economics know how to party or what?

 

 

COWLES COMMISSION SONG
(to the tune of The American Patrol)

WE MUST BE VIGILANT
Adapted from F.W. Meacham’s “American Patrol”. Music adapted by Joseph A. Burke. Words by Edgar Leslie. (1942)
We must be rigorous,
We must be rigorous,
We must fulfill our role;
If we hesitate
Or equivocate,
We won’t achieve our goal.
We must investigate
Our system, complicate
To make our models whole;
Econometrics
brings about
Statistical control.

Our esoteric seminars
bring statisticians by the score.
But try to find economists
Who don’t think algebra a bore.
O, we must urge them all emphatically
To become inclined mathematically
So that all that we’ve developed, may
Someday be applied.

 We Must be Vigilant!
We Must Be Vigilant!
American Patrol!
With arms for the army,
Ships for the navy,
Let this be our goal.
We must be diligent!
We must be diligent!
American Patrol.
Protect our shoreline
To the door line
Of ev’ry native soul.

We need this solidarity
Or else divided we will fall;
It means the popularity
Of peace and happiness for all.
Behind this cause we must keep rallying,
Let there be no dilly dallying;
Keep us free from shill-shallying
Hark to freedom’s call.

(repeat first 11 lines)

Image Source: Mikael Uhlin’s Marxology at marx-brothers.org.

 

Categories
Chicago Economists Harvard

Harvard Alumnus. A.W. Marget. Too Jewish for Chicago? 1927.

Harvard economics Ph.D. (1927), Arthur William Marget (1899-1962), went on to teach at the University of Minnesota (ca 1927-1941) after which he began his second career as an economist at the Fed in Washington, D.C. Of particular interest in this posting is the reference letter sent by Allyn Young to the University of Chicago that is both glowing and explicit about his assistant’s handicap—“one of the chosen people”, i.e. a Jew.

________________________________________

From the AEA 1957 Handbook of Members

Marget, Arthur William, Bd. of Gov. Fed. Res. System, Washington 25, D.C. (1926 [began membership in AEA]) Bd. of Gov. of Fed. Res. System, dir., Div. of Int. Fin.; b. 1899; A.B., 1920, A.M., 1921, Ph.D., 1927, Harvard; 1920, Univ. of Cambridge; 1921, Univ. of London; 1921, Univ. of Berlin. Fields 7a [Money, Credit, and Banking: Monetary Theory and Policy], 9b [International Economics: Foreign Exchange, International Finance], 2c [History of Economic Thought]. Doc. dis. Loan fund: pecuniary approach to problem of determination of rate of interest. Pub. Theory of prices (Prentice-Hall, 1938, 1942); “Leon Walras and ‘Cash balance approach’ to problem of value of money,” J. P. E., 1931; “Monetary aspects of Schumpeterian system,” Rev. of Econ. and Statis., 1951. Dir. W. W. in Amer., Dir. of Amer. Schol.

 

Source: American Economic Review, Vol. 47, No. 4. Handbook of the American Economic Association (July, 1957), p. 189.

________________________________________

 

[ALLYN ABBOTT] YOUNG’S COMMENTS ON A. W. MARGET

[undated, Either 1926 or 1927. A typed copy of an excerpt from a letter by Young]

“The man who has been my assistant for the past three years is taking his degree this year. He has written a very brilliant thesis on “The Loan Fund: A Pecuniary Theory of Interest.” In erudition and cleverness he is as good as any man I have ever had, although I do not think he strikes as deeply in his thinking as the best of them. He graduated at the head of his class at Harvard, and was Phi Beta Kappa Marshal. Harvard sent him abroad on a traveling fellowship for a year, and he has been here for five subsequent years. He writes well and teaches well. All in all he is easily the best product we are turning out this year, and with the exception of James Angell he is as good as we have turned out in years. Now you will ask, ‘What’s wrong?’ His name is A. W. Marget and he is one of the chosen people. More than that he looks it. He is brilliant, loyal, and so good a teacher that he is quite popular among the Harvard undergraduates. The only thing that stands between him and success is his race. If you don’t fill your place next year, you might do worse than to take him on for a year’s trial.”

Source: University of Chicago Archives. Department of Economics, Records. Box 38, Folder 1.

________________________________________

 

PRICE GREENLEAF AWARDS MADE
Fifty-Four Freshmen Received Benefits From Endowment Fund.

Fifty-four members of the Freshman Class have been awarded Price Greenleaf aid assignments for 1916-17. These awards represent part of an annual appropriation of $16,000 given to the University by the bequest of Ezekiel Price Greenleaf, of Quincy, who is also the founder of ten Price Greenleaf scholarships.

The income of the Price Greenleaf fund is distributed in sums from $100 to $250 a year, to undergraduates in the first year of their residence and to deserving students who have not succeeded in the competition for scholarships.

A subsequent award will be made in February to some other first year students of high standing. Following are those who have received the awards:

…Arthur William Marget…

 

Source: The Harvard Crimson, November 1, 1916.

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ADMISSION EXAMINATION HONOR LIST ANNOUNCED
Boston Latin School Leads Number With Exeter Second and St. Paul’s and Newton Third.

The Committee on Admission has issued a list of the Freshmen whose entire entrance examination records have attained an average grade of work worthy of honorable mention. This is published in accordance with a vote of the Faculty of Arts and Sciences, June 2, 1914, authorizing the Committee on Admission to publish each year after the September examinations, a list of those candidates for admission who passed this examination with high grades. This list also gives the names of the students’ schools and the titles of any scholarships they may have received. Boston Latin School leads this year with nine representatives on the list. Exeter is second with seven, and St. Paul’s School, of Concord, N. H., and Newton High School come next with four apiece….

… Arthur William Marget, Boston Latin, (Price Greenleaf Aid)…

 

Source: The Harvard Crimson, November 25, 1916.

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Marget Elected Marshal of Scholars

Arthur William Marget 1G, of Roxbury, has been elected First Marshal of the Phi Beta Kappa Society at the University, an office which each year goes to the student ranking highest in his studies. Marget completed the College course in three years, graduated with the class of 1919, and is now attending the Graduate School of Arts and Sciences.

Source: The Harvard Crimson, November 12, 1919.

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Image Source: Arthur William Marget in Harvard Album 1928.

Categories
Business School Chicago Economists

Chicago. Problem of Faculty Turnover, 1923

The Special Collections Research Center of the University of Chicago Library is putting scans of records from the respective administrations of Presidents Harper, Judson and Burton (1869-1925)  on-line (52 boxes of 91 boxes thus far!).  For today’s posting I have transcribed the introduction and conclusions of a summary “of the most imperative needs of the Graduate School of Arts and Literature” written in October 1923 as well as the section for the Department of Political Economy. Additionally I provide c.v. data for the economists named published in the Annual Register 1921-22 for the University of Chicago and additional biographical information (obituaries/memorials) to follow their post-Chicago careers.

 

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The University of Chicago
The Graduate School of Arts and Literature

Office of the Dean

October 30, 1923.

Dean J. H. Tufts,
The University of Chicago.

Dear Dean Tufts:

I enclose a summary of the most imperative needs of the Graduate School of Arts and Literature. I have drawn it up only after a most careful examination of the condition of the Departments. I am convinced that it is only by making the new appointments which I have listed and providing the increases I have indicated that the School can hope to make any appreciable contribution to graduate studies in America or even to hold its own with the other Graduate Schools in the country. In the case of some departments the situation is almost inconceivably bad. It is so bad that it is only by making new appointments of strong men—major appointments that would command attention—and by increasing the salaries of many members of the teaching staff who are being tempted away that we can hope to regain our prestige. I hope that this will not sound like an exaggeration. It is not. It is a lamentable fact that some of the departments that ten or fifteen years ago were famous and attracted graduate students from all parts of the continent are now deplorably weak, while some of the others, though still doing efficient work, have recently suffered serious losses in their teaching staff and are threatened with still more. Let me speak of these in detail.

 

I. The Weak Departments:

  1. The Department of Psychology…
  2. The Department of the History of Art…
  3. The Department of German….
  4. The Department of Latin…
  5. Another notable example of weakness is found in Anthropology…
  6. The Department of General Literature…

 

[II.] The Other Departments:

  1. Romance Languages…
  2. History…
  3. Political Economy

The situation here is especially precarious. The instructional staff is an efficient one but extremely difficult to hold. Within recent years three men have gone: Moulton, Hardy and Lyon. Some of the men here now have received tempting offers of positions wither in government bureaus or in industries. The new appointment in Money and Banking is to fill the vacancy caused by Moulton’s going to Washington two years ago. Viner has had more than one call. Good men in Political Economy seem to be increasingly hard to get.

May I remind you also of the fine contribution that this Department, under Mr. Marshall’s inspiration, has made to that cooperative study of economic, social, and political conditions in Chicago that is being carried on by all the departments in the Social Science Group. This whole piece of work is, as you yourself know, a most interesting experiment, and in its detailed analysis of the characteristics of the Chicago community, will in all probability prove to be a model for the study of any large metropolitan area.

I hope you will pardon my writing at such length, but the situation seems to me to be critical. We cannot afford to delay remedial measures. The money that I am asking for is not simply for the University of Chicago, it is for Graduate Studies in the whole Middle West, which looks to Chicago for its teachers. Of all the new appointments that I have urged there is not one that would not influence higher education throughout the Mississippi Valley.

 

Yours very truly,

[signed]
Gordon J. Laing

 

Source: University of Chicago. Office of the President: Harper, Judson and Burton Administrations Records 1869-1925. Box 47, Folder 6 “Graduate schools, development, 1914-1924”.

 

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Charles Oscar Hardy, Ph.D., Assistant Professor of Financial Organization in the School of Commerce and Administration. [Resigned]

A.B., Ottawa University, 1904; Professor of History and Economics, ibid., 1910-18; Dean of the College, ibid., 1916-18; Ph.D., University of Chicago, 1916; Lecturer in the School of Commerce and Administration, ibid., 1918-19; Assistant Professor, ibid., 1919-22.

 

Harold Glenn Moulton, Ph.B., Ph.D., Professor of Political Economy. [Resigned]

Ph.B., University of Chicago, 1907; Assistant in Political Economy, ibid., 1910-11; Instructor, ibid., 1911-14; Ph.D., ibid., 1914; Assistant Professor, ibid., 1914-18; Associate Professor, ibid., 1918-1922; Professor, ibid., 1922.

 

Leverett Samuel Lyon, A.M., LL.B., Ph.D., Assistant Professor of Commercial Organization in the School of Commerce and Administration.

Ph.B., University of Chicago, 1910; LL.B., Chicago Kent College of Law, 1915; Assistant in Commercial Organization in the School of Commerce and Administration, ibid., 1916-17; Instructor, ibid., 1917-19; A.M., ibid., 1918; Assistant Professor, ibid., 1919—; Ph.D., ibid., 1921.

 

Jacob Viner, Ph.D., Assistant Professor of Political Economy.

B.A., McGill University, 1914; A.M., Harvard University, 1915; Instructor in Political Economy, University of Chicago, 1916-19; Assistant Professor, ibid., 1919—; Ph.D., Harvard University, 1922.

 

Leon Carroll Marshall, A.M., LL.D., Professor and Chairman of the Department of Political Economy; Dean of the School of Commerce and Administration and of the Graduate School of Social Service Administration.

A.B., Ohio Wesleyan University, 1900; A.B., Harvard University, 1901; A.M., ibid., 1902; Assistant, ibid., 1902-3; Professor of Economics, Ohio Wesleyan University, 1903-7; Assistant Professor of Political Economy, University of Chicago, 1907-8; Associate Professor, ibid., 1908-11; Dean of the School of Commerce and Administration, ibid., 1909—; Professor of Political Economy, ibid., 1911—; Dean of the Senior Colleges, ibid., 1911-20; LL.D., Ohio Wesleyan University, 1918; Dean of the Graduate School of Social Service Administration, University of Chicago, 1920—.

 

 

Source: University of Chicago, Annual Register, 1921-1922, pp. 38, 40, 54, 57.

 

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Life after the University of Chicago

“In Memoriam: Charles Oscar Hardy, 1884-1948”. American Economic Review, Vol. 39, No. 3 (May, 1949), pp. 478-480.

“Harold Moulton, Economist, Dead. Ex-President of Brookings Institution in the Capital,” The New York Times, December 15, 1965, p. 48.

Engle, N. H., “Leverett Samuel Lyon”, Journal of Marketing, Vol 24, No. 1 (July, 1959), pp. 67-69.

“Dr. Jacob Viner, Economist, Dead: Princeton Professor was U.S. Adviser 4 Decades,” The New York Times, September 13, 1970.

Marshall, Leon Carroll, 1879-1966. Biographical notes. Social Networks and Archival Context (SNAC). [Webpage].

 

Image Source: Leon C. Marshall. University of Chicago Photographic Archive, apf1-04113, Special Collections Research Center, University of Chicago Library.