Category: Exam Questions

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.

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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.

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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.

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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.

2. 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.
3. 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

4. Discuss the mathematical expressions which indicate dispersion. Which would you use to show the dispersion of the data given in problem 3?
5. If an arithmetic mean were to be calculated for the data given in problem 3, should a weighted or unweighted average be calculated? Discuss.
6. How may a frequency distribution be described?
7. 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.

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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?

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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.

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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. —
   1. Discuss the purposes and content of a balance sheet.
   2. Discuss the purposes and content of a profit and loss statement.
2. —
   1. Why does a ledger need adjusting at the close of a fiscal period?
   2. What does a trial balance prove?
3. —
   1. What is the function of a journal; of a ledger?
   2. Name five temporary proprietorship accounts and two vested proprietorship accounts.
4. —
   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%.)
5. —
   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.
6. —
   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. 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?
3. —
   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.
4. 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?
5. Discuss fully the retail method of inventory valuation.
6. —
   1. Enumerate six causes of depreciation.
   2. Distinguish between the problem of depreciation and replacement.
7. How would you handle the replacement of a part of an asset on the accounting records?
8. How would you account for the cost of rearrangement of machinery in a factory?
9. 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.
4. —

(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?

5. 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?
6. Distinguish between (a) principal and income and (b) real and personal property in accounting for the affairs of an estate.
7. —

(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.
3. —
   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?
4. —
   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.
5. 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. 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. 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. 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?
2. —

(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?

3. 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?
4. —

(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?

5. —

(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?

6. 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.