After a pause dedicated to revising a paper, I return to the task of transcribing the economics mid-year and year-end examinations from Harvard University. The first table below provides links to four decades worth of introductory exams, ending in January and June 1910. Material for the other economics courses taught at Harvard in 1910-11 will be posted over the next couple of months.
In 1910-11 Frank Taussig was back in the saddle after a leave of absence taken during the previous year. He completed the first edition of his Principles of Economics [Volume I; Volume II] in March 1911 [Preface]. Links to the references from that first edition have been posted.
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Exams for principles (a.k.a. outlines)
of economics at Harvard
1870/71-1909/10
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Course Announcement
1910-11
- Principles of Economies. Tu., Th., Sat., at 11. Professor Taussig, assisted by Drs. Huse, Day, and Foerster, and Messrs. Sharfman, and Balcom.
Course 1 is introductory to the other courses. It is intended to give a general survey of the subject for those who take but one course in Economics, and also to prepare for the further study of the subject in advanced courses. It is usually taken with most profit by undergraduates in the second year of their college career. Students who plan to take it in their first year are strongly advised to consult the instructor in advance. History 1 or Government 1, or both of these courses, will usually be taken to advantage before Economics 1.
[…]
Course 1 gives a general introduction to economic study, and a general view of Economics for those who have not further time to give to the subject. It undertakes a consideration of the principles of production, distribution, exchange, money, banking, international trade, and taxation. The relations of labor and capital, the present organization of industry, and the recent currency legislation of the United States will be treated in outline.
The course will be conducted partly by lectures, partly by oral discussion in sections. A course of reading will be laid down, and weekly written exercises will test the work of students in following systematically and continuously the lectures and the prescribed reading.
Source: History and Political Science, Comprising the Departments of History and Government, and Economics, 1910-11. Published in the Official Register of Harvard University. Vol. VI,I No. 23 (June 21, 1910), pp. 51-2.
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Course Enrollment
1910-11
Economics 1. Professor Taussig, assisted by Drs. [Charles Phillips] Huse [Ph.D., 1907] , [Edmund Ezra] Day, [Ph.D. 1909] and [Robert Franz] Foerster [Ph.D. 1909], and Mr. [Alfred Burpee] Balcom [A.M. 1909] — Principles of Economics.
Total 531: 5 Graduates, 14 Seniors, 96 Juniors, 272 Sophomores, 99 Freshmen, 45 Others.
Source: Harvard University. Report of the President of Harvard College, 1910-1911, p. 48.
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ECONOMICS 1
Mid-year Examination, 1910-11
Arrange your answers
strictly in the order of the questions.
Give your reasons in all cases.
- “Economic productivity is not a matter of piety or merit or deserving, but only of commanding a price. Actors, teachers, preachers, lawyers, [sic, “prostitutes,” was the last item on H. J. Davenport’s list on p. 112, see link.] all do things that men are content to pay for. So wages may be earned by writing libels against a rival candidate, or by setting fire to a competitor’s refinery. The test of economic productivity in a competitive society is the fact of private gain, irrespective of any ethical criteria.” [H.J. Davenport. Social productivity versus private acquisition. Quarterly Journal of Economics, Vol 25, No. 1 (Nov. 1910), pp. 96-118.]
Would you agree? In which of the cases above-mentioned, if any, do you find economic productivity? - Draw a diagram illustrating how the price of a commodity is related to its cost of production under conditions of diminishing return (i.e. increasing cost). Explain the diagram, and indicate rent on it.
- What is the influence of cost of production on value in the case of a copyrighted book? cotton seed? a bushel of wheat?
- Suppose prices to have been as follows: —
| 1909 | 1910 | |
| Wheat (bushel) | $1.00 | $1.20 |
| Cotton (pound) | 0.10 | 0.12 |
| Iron (ton) | 10.00 | 13.00 |
| Copper (pound) | 0.10 | 0.06 |
| Quicksilver (pound) | 1.00 | 0.50 |
(a) Construct an index number, using the simple arithmetic mean, to show how general prices in 1910 were related to prices in 1909.
(b) Next, weight the commodities,—
| …giving to wheat | a weight of 5 |
| …giving to cotton | a weight of 4 |
| …giving to iron | a weight of 4 |
| …giving to copper | a weight of 1 |
| …giving to quicksilver | a weight of 1 |
Construct a second index number, using the weighted arithmetical mean.
Which index number would you consider the more trustworthy!
- In spite of recent great increases in the world’s gold production, the price of an ounce of gold in the United States has remained steadily at $20.67; in England, at £3 17s. 10½d. How do you explain this steadiness? Has there been the same steadiness in the value of gold?
- Explain briefly: —
Free coinage.
Mint ratio.
Bimetallism.
Limping standard.
Subsidiary coin.
- In 1850 the United States coined silver and gold at the ratio of 16 to 1. The market ratio then was 15.7 to 1. Which metal would you expect to be brought to the mint for coinage, and why?
- Wherein is the regulation of note-issue for the Reichsbank of Germany similar to its regulation for the Bank of England? Wherein different? Which of the two plans of regulation has proved the more successful?
- Explain briefly: —
Legal reserves.
“The essential similarity of notes and deposits.”
“Deposits as currency.”
Source: Harvard University Archives. Harvard University. Mid-year Examinations, 1852-1943. Box 8, Bound Volume: Examination Papers, Mid-Years 1910-11.
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ECONOMICS 1
Year-end Examination, 1910-11
Arrange your answers
strictly in the order of the questions.
Answer all the questions.
- Suppose a great issue of inconvertible paper money (fiat money) in the United States: what would be the effects, temporary or permanent, on the rate of interest; the value of money; the rate of foreign exchange; imports and exports?
- Is it true that “rent does not enter into the cost of production of agricultural produce”?
- A shop-keeper, on a side street off Massachusetts Avenue in Cambridge, advertised: “We can sell at low prices because we pay low rent.” Do you think it probable that he could?
- A corporation is formed, with a capital (paid in) of $1,500,000. It buys a city site for $1,000,000, and erects on it an office building which costs $1,000,000; the sum of $500,000 toward the cost of the building being borrowed at 5%. By good management it succeeds in paying to its stockholders from the rentals of the offices (after meeting all expenses and interest on the money borrowed) dividends of 8%.
What determined the price at which the site was purchased? Is the return received by the stockholders interest, rent, business profits, wages? - A business firm is made up of three partners, A and B, active partners, and C, an inactive (or silent) partner. The firm has $150,000 capital, contributed in equal shares by the three partners. Its articles of agreement provide that the net earnings shall be divided as follows: first, a dividend of 6% on the capital; second, if net earnings permit, a salary of $4,000 to each of the active partners; lastly, any remainder to be distributed as further dividend on the capital. The firm’s net earnings in 1908 were $23,000.
What were the “business profits” of the firm? What were its “profits” in the sense in which Mill used that term? - Explain: —
non-competing groups;
“real” differences of wages;
“the forces of environment”;
social stratification.
- Would you regard a great extension of public ownership (to such industries as railways, street railways, gas works, coal mines) as “socialistic”? If so, in what sense? If not, why not?
Would you regard a tax on the future increase of economic rent as “socialistic”? If so, in what sense? If not, why not? - From a speech made in 1909 by a member of Congress: —
“During the past few years the United States have imported from $1,000,000 to $2,000,000 worth of antimony… largely from Japan, Mexico, China, and Labrador. Practically every ton of it is imported, notwithstanding the fact that in ten or twelve of the western states it is found in abundance…. I have no doubt that (with a proposed duty on antimony) within twelve months, instead of importing all our antimony, we shall produce every pound of it in the United States. We shall have the money and our antimony too.”
What would you say of this reasoning? - Can a country advantageously import a commodity in producing which its labor is more effective than labor is in producing that commodity in the country whence it is imported?
Can a country (A) send exports to a country (B) if the current rate of wages is $2.00 a day in country A and $1.00 a day in country B?
Source: Harvard University Archives. Harvard University, Examination Papers, 1873-1915. Box 9, Bound vol. Examination Papers 1910-11 (HUC 7000.25) Papers Set for Final Examinations in History, Government, Economics,…,Music in Harvard College (June, 1911), pp. 38-39.
Image Source: From the cover of the Harvard Class Album 1946.
