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Economists Harvard Transcript

Harvard. Economics Graduate Record of Paul Samuelson. PhD 1941

Joseph Schumpeter chaired the general economics Ph.D. exam and the special Ph.D. exam of Paul Samuelson. In the course transcript of the Graduate School of Arts and Science, we see that Schumpeter awarded Samuelson the presumably maximum maximorum grade of “A plus plus” in his course.

By the end of the 1930s the individual student records of Ph.D. candidates in Harvard’s Division of History, Government, and Economics were little more than the three page application for candidacy for the Ph.D. degree along with a fourth page on which the completion of degree requirements was duly recorded: the satisfaction of French and German reading skills, passing grades for the general and special Ph.D. exams, acceptance of the thesis by readers and a transcript of Harvard coursework (presumably to satisfy residency requirements). The grade reports for the general and special exams include little more that the grade awarded, the members of the examination committee, and occasionally a sentence or two remark on the candidate’s performance.

_______________________

HARVARD UNIVERSITY
DIVISION OF HISTORY, GOVERNMENT, AND ECONOMICS

Application for Candidacy for the Degree of Ph.D.

[Note: Boldface used to indicate printed text of the application; italics used to indicate the handwritten entries]

I. Full Name, with date and place of birth.

Paul Anthony Samuelson, May 15, 1915; Gary, Indiana.

II. Academic Career: (Mention, with dates inclusive, colleges or other higher institutions of learning attended; and teaching positions held.)

University of Chicago — 1932-35

III. Degrees already attained. (Mention institutions and dates.)

A.B. — 1935 — U. of C.

IV. General Preparation. (Indicate briefly the range and character of your under-graduate studies in History, Economics, Government, and in such other fields as Ancient and Modern Languages, Philosophy, etc. In case you are a candidate for the degree in History, state the number of years you have studied preparatory and college Latin.)

Econ. Theory, 5 quarters; Econ Stat, 2; Acc’ting, 1; Labor Problems, 2; Public Finance; Econ. Hist. 2; Money & Banking, 1; Sociology, 3; Pol. Science, 4; History 7;
Reading Knowledge Exam in French and German for Ph.D., U. of C.
Anthrop. 1; Educ. 1; Mathematics, 3 quarters

V. Department of Study. (Do you propose to offer yourself for the Ph.D., “History,” in “Economics,” or in “Political Science”?)

Economics

VI. Choice of Subjects for the General Examination. (State briefly the nature of your preparation in each subject, as by Harvard courses, courses taken elsewhere, private reading, teaching the subject, etc., etc.)

  1. Economic Theory. – Econ. 11, 15b, 18
  2. Economic Statistics – Econ 32b Econ 31a
  3. Money and Banking – Econ 50
  4. Mathematical Economics Econ 8a, 18
  5. [Note: this field has a red bracket] Economic History – Econ 23
  6. Theory 

VII. Special Subject for the special examination.

Economic Theory

VIII. Thesis Subject. (State the subject and mention the instructor who knows most about your work upon it.)

[Left blank]

IX. Examinations. (Indicate any preferences as to the time of the general and special examinations.)

[Left blank]

X. Remarks

[Left blank]

Signature of a member of the Division certifying approval of the above outline of subjects.

[signed] H. H. Burbank

*   *   *   [Last page of application] *   *   *

[Not to be filled out by the applicant]

Name: Paul Anthony Samuelson

ApprovedFebruary 25, 1936

Ability to use French certified by November 5, 1935.Dr. A. E. Monroe.

Ability to use German certified by November 4, 1936. Dr. A. E. Monroe.

Date of general examination May 18, 1936. Passed. J.A.S.

Thesis received  November 12, 1940.

read by Professors Schumpeter and E. B. Wilson.

approved November 26, 1940.

Date of special examination December 4, 1940. Passed, J.A.S.

Recommended for the Doctorate 2/4/41

Degree conferred 2/17/41

Remarks.  [Left blank]

*  *  *  *  *  *  *  *  *  *  *  *  *  *

General examination,
Departmental Report

DIVISION OF HISTORY, GOVERNMENT, AND ECONOMICS
Report on Examinations for Graduate Degrees

Name of Candidate: Paul Anthony Samuelson

Date of Examination: Monday, May 18, 1936.

Department of Economics

Fields Examined: 1. Economic Theory, 2. Statistics, 3. Money and Banking, 4. Mathematical Economics

The Committee certifies that the General Special Examination of the candidate was

Excellent
Good
Fair
Unsatisfactory

Committee: Professors Schumpeter (chairman), Harris, Leontief, Dr. Gordon

Further comments may be made below.

A remarkable showing in economic theory but less strong in the applied field

Chairman
[signed]
Joseph Schumpeter

*  *  *  *  *  *  *  *  *  *  *  *  *  *

Transcript of Paul A. Samuelson in the
Graduate School of Arts and Sciences

HARVARD UNIVERSITY
THE GRADUATE SCHOOL OF ARTS AND SCIENCES

24 UNIVERSITY HALL,
CAMBRIDGE, MASSACHUSETTS

November 21, 1940

Transcript of the record of Mr Paul Anthony Samuelson

1935-36
COURSE GRADE
Economics 11 (1 course) A plus (mid-year grade)
Economics 121 (½ course) A minus
Economics 31a1 (½ course) A plus
Economics 50 (1 course) Excused
Economics 15b2 (½ course) A plus plus [sic]
Economics 32b2 (½ course) A minus
1936-37
COURSE GRADE
Economics 133 (1 course) A
Economics 143 (1 course) A
Economics 151 (1 course) A
Economics 145a1 (½ course) A plus
Economics 145b2 (½ course) A plus

Mr. Samuelson received the degree of Master of Arts in June, 1936.

*  *  *  *  *  *  *  *  *  *  *  *  *  *

Notice of Time and Place
of Special Examination

9 Holyoke House
November 26, 1940

Dear Mr. Samuelson:

The arrangements have been completed for your special examination for the degree of Ph.D. in Economics. It is to be held on Wednesday, December 4, at 4. p.m. in Littauer Center M-10.

Sincerely yours,
[unsigned copy]
Secretary.

Mr. Paul A. Samuelson
11 Ware Street
Cambridge, Massachusetts

*  *  *  *  *  *  *  *  *  *  *  *  *  *

Special examination,
Division Report

DIVISION OF HISTORY, GOVERNMENT, AND ECONOMICS
Report on Examinations for Graduate Degree

Name of Candidate: Paul Anthony Samuelson

Date of Examination: Wednesday, December 4, 1940, at 4 o’clock

Department of Economics

Fields Examined: Special Field: Economic Theory

Thesis: “Foundations of Analytical Economics: The Observational Significance of Economic Theory.”

The Committee certified that the General Special Examination of the candidate was

Excellent
Good
Fair
Failed, no bar to re-examination
Failed, recommended not to request re-examination

Committee: Professors Schumpeter (chairman), Wilson, Chamberlin, Dr. Taylor

Further comments may be made below.

The performance was excellent not only in mathematical but also in general economic theory.

[signed]
Josef Schumpeter
E.B. Wilson
O.H. Taylor
E.H. Chamberlin

Source: Harvard University Archives. Division of History, Government & Economics. PhD. Material 1939-42, Box 20.

__________________________

Course Names and Instructors
(1935-36)

Economics 11
Economic Theory
Prof. William F. Taussig
Economics 121
Monopolistic Competition and Allied Problems in Value Theory
Prof. Edward H. Chamberlin
Economics 31a1
Theory of Economic Statistics, I
Prof. William L. Crum and
Asst. Prof. Edward Frickey
Economics 50
Principles of Money and Banking
Prof. John H. Williams
Economics 15b2
Selected Problems in Advance Economic Theory
Prof. Joseph A. Schumpeter
and an assistant
Economics 32b2
Topics in Statistical Theory
Prof. E. B. Wilson

Source: Harvard University. Report of the President of Harvard College 1935-36pp. 82-84.

Course Names and Instructors
(1936-37)

Economics 133
Recent Economic History
Prof. Abbott Paysan Usher
Economics 143
International Trade
Prof. Gottfried Haberler
Economics 151
Public Finance
Professor Harold H. Burbank
Economics 145a1
Business Cycles and Economic Forecasting
Prof. Joseph A. Schumpeter
Economics 145b2
Seminar. Business Cycles and Economic Forecasting
Prof. Joseph A. Schumpter and Assoc. Prof. Gottfried Haberler

Source: Harvard University. Report of the President of Harvard College 1936-37, pp. 93-94.

Image Source: Original black-and-white photo of Samuelson from the slideshow at the M.I.T. Memorial Service (April 10, 2010).  Colorized by Economics in the Rear-view Mirror.

Categories
Economic History Exam Questions Suggested Reading Syllabus

Harvard. European and U.S. Economic History. Reading Lists and Exams. Gay, 1908-09

This post provides the double dose of economic history taught by Professor Edwin Francis Gay at Harvard in the 1908-09 academic year. I have transcribed the reading lists and final exams for the courses covering 19th century European economic history and United States economic history below.

A short bibliography for “serious students” of economic history assembled by Gay and published in 1910 was posted earlier.

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Course Enrollment
19th Century European Economic History, 1908-09

Economics 6a 1hf. Professor Gay, assisted by Mr. M. T. [Melvin Thomas] Copeland — European Industry and Commerce in the Nineteenth Century.

Total 109: 11 Graduates, 28 Seniors, 48 Juniors, 19 Sophomores, 3 Others.

Source: Harvard University. Report of the President of Harvard College, 1908-1909, p. 67.

__________________________

Reading List
19th Century European Economic History, 1908-09

ECONOMICS 6a (1908)

Required Reading is indicated by an asterisk (*)

  1. GENERAL CONDITIONS. – COLONIAL POLICY.

*Smith, Colonial Policy of Europe, in Rand (4th ed.), pp. 1-30.

*Seeley, Expansion of England (ed. 1883), pp. 98-160.

Warner, Landmarks in English Industrial History, pp. 281-300.

Mantoux, La Révolution Industrielle, pp. 73-125.

  1. THE INDUSTRIAL REVOLUTION.

*Toynbee, Industrial Revolution, pp. 32-93,

*Hobson, Evolution of Modern Capitalism, pp. 10-82.

Cunningham, Growth of English Industry and Commerce, Vol. III, pp. 609-619.

Walpole, History of England, Vol. I, pp. 50-76. (Rand, pp. 31-54.)

Wallas, Life of Francis Place, pp. 197-240.

Hutchins and Harrison, History of Factory Legislation, pp. 14-42.

Webb, History of Trade Unionism, pp. 1-101.

Mantoux, La Révolution Industrielle, pp. 349-502.

  1. AGRARIAN MOVEMENT. – CONTINENT.

*Von Sybel, French Revolution, in Rand, pp. 55-85.

*Seeley, Life and Times of Stein, Vol. I, pp. 287-297. (Rand, pp. 86-98.)

*Morier, Agrarian Legislation of Prussia, in “Systems of Land Tenure,” pp. 267-275. (Rand, pp. 98-108.)

Colman, European Agriculture (2d ed.), Vol. I1, pp. 371-394.

Flour de St. Genis, La Propriétée Rurale, pp. 80-164.

De Foville, Le Morcellement, pp. 52-89.

Goltz, Agrarwesen und Agrarpolitik, pp. 40-50.

  1. AGRARIAN MOVEMENT. – ENGLAND.

*Taylor, Decline of Land-Owning Farmers in England, pp. 1-61.

Brodrick, English Land and English Landlords, pp. 65-240.

Prothero, Pioneers and Progress of English Farming, pp. 64-103.

Caird, English Agriculture in 1850, pp. 473-528.

Colman, European Agriculture (2d ed.), Vol. I, pp. 10-109, 133-174

  1. THE FREE TRADE MOVEMENT. – ENGLAND.

*Levi, History of British Commerce, pp. 218-227, 261-272, 292-303. (Rand, pp. 207-241.)

*Morley, Life of Cobden, Vol. I, pp. 140-172, 355-389.

Ashworth, Recollections of Cobden and the League, pp. 32-64,

296-392.

Prentice, History of the Anti-Corn Law League, Vol. I, pp. 49-77.

Parker, Sir Robert Peel from his Private Letters, Vol. II, pp. 522-559; Vol. III, pp. 220-252.

  1. THE TARIFF. – CONTINENT.

*Ashley, Modern Tariff History, pp. 3-62, 301-312, [267-300]

Worms, L’Allemagne Economique, pp. 57-393.

Amé, Les Tarifs de Douanes, Vol. I, pp. 21-34, 219-316.

Perigot, Histoire de Commerce Français, pp. 77-185.

  1. FINANCE.

*Cunningham, Growth of English Industry and Commerce, Vol. III (ed. 1903), pp. 689-703, 822-829, 833-840.

*Hobson, Evolution of Modern Capitalism, pp. 167-219.

Tugan-Baranowsky, Studien zur Theorie und Geschichte der Handelskrisen in England, pp. 38-54, 62-121.

Giffen, Growth of Capital, pp. 115-134.

Macleod, Theory and Practice of Banking (4th ed.), Vol. I, pp. 433-540; Vol. II, pp. 1-197

Bastable, Public Finance, Bk. V, chaps. 3 and 4 (3d ed.), pp. 629-657

  1. THE NEW GOLD.

*Cairnes, Essays, pp. 53-108. (Rand, pp. 242-284.)

*Chevalier. On Gold (3d English ed.), pp. 1-9, 40-71, 99-106.

Jevons, Investigations in Currency and Finance, pp. 34-92.

Leroy-Beaulieu, Traité d’Economie Politique, Vol. III, pp. 192-238.

Giffen, Economic Inquiries and Studies, Vol. I, pp. 75-97.

  1. TRANSPORTATION. – ENGLAND AND FRANCE.

*Hadley, Railroad Transportation, pp. 146-202, 236-258.

Ross, British Railways, pp. 1-36.

—— The Railway Clearing House, pp. 7-28.

Findlay, Working and Management of an English Railway (6th ed.), pp. 262-322.

Meyer, Governmental Regulation of Railway Rates, pp. 123-132.

Colson, Legislation des Chemins de Fer, pp. 3-20, 133-182.

Kaufmann, Die Eisenbahnpolitik Frankreichs, Vol. II, pp. 178-284.

Guillamot, L’Organisation des Chemins de Fer, pp. 82-120.

Forbes and Ashford, Our Waterways, pp. 107-137.

Colson, Transports et Tarifs, pp. 80-145.

Léon, Fleuves, Canaux, Chemins de Fer, pp. 1-70.

  1. TRANSPORTATION. – GERMANY AND RUSSIA.

*Meyer, Governmental Regulation of Railway Rates, pp. 93-122, 133-188.

Hadley, Railroad Transportation, pp. 203-235.

Mayer, Geschichte und Geographie des Deutschen Eisenbahnen, pp. 3-14.

Leuschau, Deutsche Wasserstrassen, pp. 9-56, 95-162.

De Koulomzine, Le Transsibérien, pp. 1-53, 261-312.

  1. COMMERCE AND SHIPPING.

*Meeker, History of Shipping Subsidies, pp. 1-95.

*Bowley, England’s Foreign Trade in the Nineteenth Century (ed. 1905), pp. 55-107.

Fry, History of North Atlantic Steam Navigation, pp. 55-106, 207-249.

Cornewall-Jones, British Merchant Service, pp. 252-260, 306-317.

Day, History of Commerce, pp. 373-379, 399-405.

LeRoux de Bretagne, Les Primes à la Marine Marchande, pp. 93-224.

Rossignol, Le Canal de Suez, pp. 23-148.

  1. AGRICULTURAL DEPRESSION.

*Report on Agricultural Depression, 1897, pp. 6-87.

Pratt, Organization of Agriculture, pp. 1-104, 269-391.

Haggard, Rural England, Vol. I1, pp. 536-576.

Channing, Truth about the Agricultural Depression, pp. 1-59, 311-320.

Arch, Autobiography, pp. 65-144, 300-345.

Fillmore, Agricultural Laborer, pp. 12-24.

Winfrey, Progress of Small Holdings Movement, Econ. Jour., Vol. XVI, pp. 222-229.

Plunkett, Ireland in the New Century (ed. 1905), pp. 175-209.

Bastable, Some Features of the Economic Movement in Ireland, Econ. Jour., Vol. XI, pp. 31-42.

Imbart de la Tour, Le Crise Agricole, pp. 24-34, 127-223.

Bretano, Agrarian Reform in Prussia, Econ, Jour., Vol. VII, pp. 1-20, 165-184.

  1. RECENT TARIFF HISTORY.

*Smart, Return to Protection, pp. 7-44, 136-185, 284-259.

Ashley, W. J., Tariff Problem, pp. 53-167.

Ashley, P., Modern Tariff History, pp. 78-112, 313-358.

Dawson, Protection in Germany, pp. 17-160.

Dietzel, German Tariff Controversy, Q.J.E., Vol. XVII, pp. 365-417.

Zimmermann, Deutsche Handelspolitik, pp. 218-314.

Fisher, Protectionist Reaction in France, Econ. Jour., Vol. VI, pp. 341-355.

Meredith, Protection in France, pp. 54-129.

  1. INDUSTRIAL COMBINATION.

*Macrosty, Trust Movement in British Industry, pp. 24-56, 81-84, 117-154, 284-307, 329-345.

*Report of Industrial Commission, Vol. XVIII, pp. 7-13, 75-88, 101-122, 143-165.

Report of Industrial Commission, Vol. XVIII, pp. 14-38.

Smith, New Trades Combination Movement, pp. 1-96.

Walker, Monopolistic Combinations in Europe, Pol. Sci. Quart., Vol. XX, pp. 13-41.

———, Combinations in German Coal Industry, pp. 38-111, 175-289, 322-327.

Liefmann, Kartelle und Trusts, pp. 22-32.

Baumgarten und Meszlény, Kartelle und Trusts, pp. 83-152.

  1. LABOR, COÖPERATIVE MOVEMENT.

*Bowley, Wages in the United Kingdom, pp. 22-57, 81-127.

*Ashley, W. J., Progress of German Working Classes, pp. 60-65, 74-141, [1-52].

Shadwell, Industrial Efficiency, Vol. II, pp. 307-350.

Giffen, Essays in Finance (2d series), pp. 372-474.

Howell, Labor Legislation, pp. 447-499.

Webb, Trade Unionism, pp. 344-478.

Willoughby, Workingmen’s Insurance, pp. 29-87.

Gide, Productive Coöperation in France, Q.J.E., Vol. XIV, pp. 30-66.

Bertrand, Le Mouvement Coopératif en Belgique, Rev. d’Econ. Pol., Vol. XIII, pp. 668-694.

Adams and Sumner, Labor Problems, pp. 394-397, 407-413.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics 1895-2003. Box 1, Folder “Economics, 1908-1909”.

__________________________

ECONOMICS 6a
19th Century European Economic History
Mid-year Examination, 1908-09

  1. Toynbee says concerning the English yeomanry: “It was not till about 1760 that the process of extinction became rapid. … It was the political conditions of the age, the overwhelming importance of land, which made it impossible for the yeoman to keep his grip upon the soil.”
    Von Sybel states that in France prior to the Revolution “a middle class of proprietors, substantial enough to derive from their land a sufficient livelihood, and yet humble enough to be bound to constant and diligent labor, was entirely wanting. … But what the movement of 1789 did produce is this middle class of proprietors.”
    Comment on these statements. How, furthermore, do you account for the divergence of development between French and English agrarian conditions
  2. (1) Criticise the following statements:
    “Il est évident que nous serious plus riches si nos exportations avaient été plus considérables et nos importations moines fortes.” — Méline.
    “It is a mathematical truth that if imports come into this country of manufactured goods which we can make as well as any other nation, they must displace labor.” — Mr. Chamberlain.
    (2) “What brings great changes of policy is the shifting and readjustments of interests, not the discovery of new principles.” — John Morley.
    Illustrate this from the tariff history of Germany, France, and England.
  1. “Ability to compete in the world’s market is a vital matter for Germany. …To this achievement the State railways have contributed in the past practically nothing. … Nor will the railways be able to do much more in the future than they have done in the past.” Who says this? Give the arguments for and against this view.
  2. Discuss the recent agricultural depression in England.
  3. (1) Compare concisely the trust movement in England, Germany, and France.
    (2) What were the provisions of the Austrian bill of 1897 to regulate industrial combinations?
  4. The Report of the Industrial Commission says that “France is less developed industrially than England and Germany.” What does this mean? Can such a statement be verified by the comparison of statistics? If so, what statistics would you use? What are the chief factors which have determined industrial development in the nineteenth century, and why, in your opinion, have they not operated equally in the three countries named?

Source: Harvard University Archives. Harvard University, Examination Papers, 1873-1915. Box 8, Bound vol. Examination Papers 1908-09; Papers Set for Final Examinations in History, Government, Economics,…,Music in Harvard College (June, 1909), pp. 37-38.

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Course Enrollment
United States Economic History
1908-09

Economics 6b 2hf. Professor Gay, assisted by Mr. M. T. [Melvin Thomas] Copeland — Economic and Financial History of the United States.

Total 198: 15 Graduates, 41 Seniors, 87 Juniors, 41 Sophomores, 7 Freshmen, 7 Others.

Source: Harvard University. Report of the President of Harvard College, 1908-1909, p. 68.

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Reading List
United States Economic History
ECONOMICS 6b (1909)

Required Reading is indicated by an asterisk (*)

  1. COLONIAL PERIOD.

*Ashley, Commercial Legislation of England and the American Colonies, Q.J.E., Vol. XIV, pp. 1-29; printed also in Ashley’s Surveys, pp. 309-335.

*Semple, American History and its Geographic Conditions, pp. 36-51.

McMaster, History of the People of the United States, Vol. I, pp. 1-102.

Eggleston, Transit of Civilization, pp. 273-307.

Beer, Commercial Policy of England, pp. 5-158.

Rabbeno, American Commercial Policy, pp. 3-91.

Lord, Industrial Experiments in the British Colonies of North America, pp. 56-86, 124-139.

1776-1860.
  1. COMMERCE, MANUFACTURES, AND TARIFF.

*Taussig, Tariff History of the United States, pp. 68-154.

*Hamilton, Report on Manufactures, in Taussig’s State Papers and Speeches on the Tariff, pp. 1-79, 103-107, (79-103).

Bolles, Industrial History of the United States, Book II, pp. 403-426.

Bishop, History of American Manufactures, Vol. II, pp. 256-505.

Pitkin, Statistical View of the Commerce of the United States (ed. 1835), pp. 368-412.

Gallatin, Free Trade Memorial, in Taussig’s State Papers, pp. 108-213.

Rabbeno, American Commercial Policy, pp. 146-183.

Hill, First Stages of the Tariff Policy of the United States, Amer. Econ. Assoc. Pub., Vol. VIII, pp. 107-132.

  1. INTERNAL IMPROVEMENTS.

*Callender, Early Transportation and Banking Enterprises, Q.J.E., Vol. XVII, pp. 111-162; printed also separately, pp. 3-54.

Tenth United States Census (1880), Vol. IV, Thos. C. Purdy’s Reports on History of Steam Navigation in the United States, pp. 1-62, and History of Operating Canals in the United States, pp. 1-32.

Chevalier, Society, Manners and Politics in the United States, pp. 80-87, 209-276.

Ringwalt, Development of Transportation Systems in the United States, pp. 41-54, 64-166.

Phillips, History of Transportation in the Eastern Cotton Belt, pp. 46-131.

Bishop, State Works of Pennsylvania, pp. 150-261.

Gallatin, Plan of Internal Improvements, Amer. State Papers, Misc., Vol. I, pp. 724-921 (see especially maps, pp. 744, 762, 764, 820, 830).

Pitkin, Statistical View (1835), pp. 531-581.

Chittenden, Steamboat Navigation on the Missouri River, Vol. II, pp. 417-424.

  1. AGRICULTURE AND LAND POLICY. — WESTWARD MOVEMENT.

*Hart, Practical Essays on American Government, pp. 233-257 printed also in Q.J.E., Vol. I, pp. 169-183, 251-254.

*Hammond, Cotton Industry, pp. 67-119.

*Semple, American History and its Geographic Conditions, pp. 52-74.

Turner, Significance of the Frontier in American History, in Report of Amer. Hist. Assoc., 1893, pp. 199-227.

Donaldson, Public Domain, pp. 1-29, 196-239, 332-356.

Hibbard, History of Agriculture in Dane County, Wisconsin, pp. 86-90, 105-133.

Sanborn, Congressional Grants of Land in Aid of Railways, Bulletin of Univ. of Wisconsin Econ., Pol. Sci. and Hist. Series, Vol. II, No. 3, pp. 269-354.

Hart, History as Told by Contemporaries, Vol. III, pp. 459-478.

  1. THE SOUTH AND SLAVERY.

*Cairnes, The Slave Power (2d ed.), pp. 32-103, 140-178.

Hammond, Cotton Industry, pp. 34-66.

Russell, North America, its Agriculture and Climate, pp. 133-167.

De Tocqueville, Democracy in America (ed. 1838), pp. 336-361, or eds. 1841 and 1848, Vol. I, pp. 386-412.

Helper, Compendium of the Impending Crisis of the South, pp. 7-61.

Ballagh, Land System of the South, Publications of Amer. Hist. Assoc., 1897, pp. 101-129.

  1. FINANCE, BANKING AND CURRENCY.

*Dewey, Financial History of the United States, pp. 34-59, 76-117, 224-246, 252-262.

*Catterall, The Second Bank of the United States, pp. 1-24, 68-119, 376 map, 402-403, 464-477.

Bullock, Essays on the Monetary History of the United States, pp. 60-93.

Hamilton, Reports on Public Credit, Amer. State Papers, Finance, Vol. I, pp. 15-37, 64-76.

Kinley, History of the Independent Treasury, pp. 16-39.

Sumner, Andrew Jackson (ed. 1886), pp. 224-249, 257-276, 291-342.

Ross, Sinking Funds, pp. 21-85.

Scott, Repudiation of State Debts, pp. 33-196.

Bourne, History of the Surplus Revenue of 1837, pp. 1-43, 125-135.

Conant, History of Modern Banks of Issue, pp. 310-347.

1860-1900.
  1. FINANCE, BANKING AND CURRENCY.

*Mitchell, History of the Greenbacks, pp. 3-43, 403-420.

*Noyes, Thirty Years of American Finance, pp. 1-72, 234-254, (73-233).

Taussig, Silver Situation in the United States, pp. 1-157.

Dunbar, National Banking System, Q.J.E., Vol. XII, pp. 1-26; printed also in Dunbar’s Economic Essays, pp. 227-247.

Howe, Taxation and Taxes in the United States under the Internal Revenue System, pp. 136-262.

Tenth United States Census (1880), Vol. VII; Bayley, History of the National Loans, pp. 369-392, 444-486.

  1. TRANSPORTATION.

*Hadley, Railroad Transportation, pp. 1-23, 125-145.

*Johnson, American Railway Transportation, pp. 24-68, 307-321, 367-385.

Industrial Commission, Vol. XIX, pp. 466-481.

Adams, Chapters of Erie, pp. 1-99, 333-429.

Davis, The Union Pacific Railway, Annals of the Amer. Acad., Vol. VIII, pp. 259-303.

Villard, Memoirs, Vol. II, pp. 284-312.

Dixon, Interstate Commerce Act as Amended, Q.J.E., Vol. XXI, pp. 22-51.

  1. COMMERCE AND SHIPPING.

*Meeker, History of Shipping Subsidies, pp. 150-171.

Meeker, Shipping Subsidies, Pol. Sci. Quart., Vol. XX, pp. 594-611.

Soley, Maritime Industries of the United States, in Shaler’s United States, Vol. I, pp. 518-618.

McVey, Shipping Subsidies, J. Pol. Ec., Vol. IX, pp. 24-46.

Wells, Our Merchant Marine, pp. 1-94.

Day, History of Commerce, pp. 553-575.

  1. AGRICULTURE AND OPENING OF THE WEST.

*Industrial Commission, Vol. XIX, pp. 43-123, 134-167.

*Noyes, Recent Economic History of the United States, Q.J.E., Vol. XIX, pp. 167-187.

Twelfth United States Census (1900), Vol. V, pp. xvi-xlii.

Hammond, Cotton Industry, pp. 120-226.

Quaintance, Influence of Farm Machinery, pp. 1-103.

Adams, The Granger Movement, North American Review, Vol. CXX, pp. 394-424.

Bemis, Discontent of the Farmer, J. Pol. Ec., Vol. I, pp. 193-213.

  1. INDUSTRIAL EXPANSION.

*Twelfth United States Census (1900), Vol. VII, pp. clxx-clxxviii.

*Noyes, Thirty Years of American Finance, pp. 113-152, 182-233.

Industrial Commission, Vol. XIX, pp. 485-519, 544-569.

Twelfth Census, Vol. IX, pp. 1-16; Vol. X, pp. 725-748.

Wells, Recent Economic Changes, pp. 70-113.

Sparks, National Development, pp. 37-52.

  1. THE TARIFF.

*Taussig, Tariff History, pp. 155-229, 321-360.

Stanwood, American Tariff Controversies, Vol. II, pp. 243-394.

Taussig, Iron Industry, Q.J.E., Vol. XIV, pp. 143-170, 475-508.

Taussig, Wool and Woolens, Q.J.E., Vol. VIII, pp. 1-39.

Taussig, Sugar, Atlantic Monthly, Vol. CI, pp. 334-344.

Wright, Wool-growing and the Tariff since 1890, Q.J.E., Vol. XIX, p. 610-647.

Robinson, History of Two Reciprocity Treaties, pp. 9-17, 40-77, 141-156.

Laughlin and Willis, Reciprocity, pp. 311-487.

  1. INDUSTRIAL CONCENTRATION.

*Willoughby, Integration of Industry in the United States, Q.J.E., Vol. XVI, pp. 94-115.

*Noyes, Recent Economic History of the United States, Q.J.E., Vol. XIX, pp. 188-209.

Twelfth Census, Vol. VII, pp. cxc-ccxiv.

Industrial Commission, Vol. XIII, pp. v-xviii.

Bullock, Trust Literature, Q.J.E., Vol. XV, pp. 167-217.

  1. THE LABOR PROBLEM.

*Adams and Sumner, Labor Problems, pp. 502-547.

United States Bureau of Labor Bulletins, No. 18 (Sept., 1898), pp. 665-670; No. 30 (Sept., 1900), pp. 913-915; No. 53 (July, 1904), pp. 703-728.

Levassesur, American Workman, pp. 436-509.

Mitchell, Organized Labor, pp. 391-411.

Twelfth Census, Special Report on Employees and Wages, p. xcix.

National Civic Federation, Industrial Conciliation, pp. 40-48, 141-154, 238-243, 254-266.

  1. POPULATION, IMMIGRATION AND THE RACE QUESTION.

* United States Census Bulletin, No. 4 (1903), pp. 5-38.

*Industrial Commission, Vol. XV, pp. xix-lxiv.

Adams and Sumner, Labor Problems, pp. 68-112.

Mayo-Smith, Emigration and Immigration, pp. 33-78.

Walker, Discussions in Economies and Statistics, Vol. II, pp. 417-451.

Hoffmann, Race Traits and Tendencies of the American Negro, pp. 250-309.

Tillinghast, The Negro in Africa and America, pp. 102-228.

Twelfth Census Bulletin, No. 8.

United States Bureau of Labor Bulletins, Nos. 14, 22, 32, 35, 37, 38, 48.

Washington, Future of the American Negro, pp. 3-244.

Stone, A Plantation Experiment, Q.J.E., Vol. XIX, pp. 270-287.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics 1895-2003. Box 1, Folder “Economics, 1908-1909”.

________________________

United States Economic History
ECONOMICS 6b
Year-end Examination, 1909

  1. Compare the financial history of the United States during the period 1829-1840 with that of the period 1880-1896.
  2. Trace briefly the relation between tariff legislation and the public revenue since the establishment of the Independent Treasury.
    1. Comment on the following (from President Grant’s message of 1870):—
      “Building ships and navigating them utilizes vast capital at home; it creates a home market for the farm and the shop; it diminishes the balance of trade against us precisely to the extent of freights and passage money paid to American vessels, and gives us a supremacy of the seas of inestimable value in case of foreign war.”
    2. Was the balance of trade before 1870 “favorable” or “unfavorable” to the United States? Why?
  3. Sketch the history of wheat-growing in the United States: changes in geographical location, markets, and prices.
  4. What is meant by the integration of industry? How far has it affected, and how far do you think it will affect, the following industries: Cotton; woolen; iron; sugar; tobacco; boots and shoes? Give reasons.
  5. (a) The distribution of immigrants in the different industries as shown by the Industrial Commission report. (b) The alien contract labor law.
  6. State briefly what you consider to be the most significant point brought out in your thesis for this course.

Source: Harvard University Archives. Harvard University, Examination Papers, 1873-1915. Box 8, Bound vol. Examination Papers 1908-09; Papers Set for Final Examinations in History, Government, Economics,…,Music in Harvard College (June, 1909), p. 38.

Image Source: John George Brown, The Longshoremen’s Noon, 1879, oil on canvas, National Gallery of Art, Washington, Corcoran Collection (Museum Purchase, Gallery Fund), 2014.136.2. From the National Gallery of Art’s web-page “Industrial Revolution.”

Categories
Exam Questions International Economics Northwestern Problem Sets Syllabus

Northwestern. Reading List and Exams for International Trade and Finance. Harwitz, 1962

The following course materials were found in Robert Clower’s papers at Duke University’s Economists’ Papers Archive. Clower collaborated with Mitchell Harwitz (MIT Ph.D., 1959) on a few papers and kept some of Harwitz’s course materials from their years together at Northwestern.

The course offers us some insight into International Economics à la Charles Kindleberger as taught by one of his former M.I.T. doctoral students.

____________________________

AEA Members Listing 1991

HARWITZ, MITCHELL, SUNY Buffalo, Dept. Econ, Buffalo, NY 14260.
Birth Yr: 1934.
Degrees: B.A., Brandeis U. 1954; Ph.D. M.I.T., 1959
Prin. Cur. Position: Assoc. Prof., SUNY at Buffalo, 1964
Concurrent/Past Positions: Asst. Prof., Northwestern U., 1958-64
Research: Temporal-spatial choice theory, labor coops with complex contracts.

Source: AEA Biographical Listing, 1993, p. 205

____________________________

Economics Ph.D., M.I.T. 1959

Dissertation: On Some Problems in the Dynamic Theories of International Trade and Economic Growth

Advisor: Charles Poor Kindleberger

Source: Mathematics Genealogy Project.

____________________________

LECTURE AND READING LIST

NORTHWESTERN UNIVERSITY
DEPARTMENT OF ECONOMICS

Economics B-60
International Trade and Finance

Winter, 1962
Mr. Harwitz

There are a total of 36 class hours, of which two are devoted to mid-term examinations and three remain for reviews. The mid-term grades will constitute about 40% of the final grade.

The text is C. P. Kindleberger, International Economics, hereafter called K.

There will be a homework exercise on balance of payments accounting handed out after the January 11 lecture.

Date of Lecture

Topic

Reading

1/8

Introduction and review K, Ch. 1
Optional: Samuelson, Economics, Ch. 31, Ch. 32 and Appendix
I. Balance of Payments and FX Markets

1/9,10

A. Balance of Payments
1. Relation of B of P to National Income Accounts K, Ch. 2
2. Relation of items of B of P to FX markets
B. FX Markets K, Ch. 3

1/11

1. Equilibrium in FX markets K, Ch. 24

1/15-17

2. Dynamics of FX market adjustment K, Ch. 4
a. Fixed exchange rates
b. Fluctuating exchange rates
c. Exchange control
II. Current Account: Trade Theory

1/18,22

A. Supply K, Ch. 5. – handout

1/23-4

B. Demand K, Ch. 6

1/25

C. Trends in Supply and Demand K, Ch. 7

1/29-30

D. Comparative Statics of FX equilibria K, Ch. 9

1/31-2/1

E. Comparative statics of income equilibria K, Ch. 10

2/5

[FIRST] EXAMINATION
III. Current Account: Commercial Policy

2/6,7

A. Tariffs K. 12

2/8

B. Selected alternative devices Handout
IV. Capital Account

2/12

A. Short-term capital movements K, Ch. 17

2/13-14

B. Private and public lending K, Ch. 19

2/15,19

C. Direct investment K, Ch. 20

2/20

D. Capital accounts in the course of development K, Ch. 21
V. Transfers and government assistance

2/21-2

K, Ch. 23

2/25

[SECOND] EXAMINATION
VI. Disequilibria and adjustment mechanisms

2/27

A. Reprise on equilibrium K, Ch. 24

2/28, 3/1,5

B. Types of disequilibria and related adjustment K, Ch. 28

3/12

FINAL EXAMINATION, 8-10 A.M.

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Exercise in Balance of Payments Accounting

Economics B-60
DUE: JANUARY 18

Winter, 1962
January 11, 1962

From the information that follows, construct a balance of payments statement for the U.S. for the month of January, 1962, during all these transactions take place. Write out the statement showing both debits and credits, as well as the net figures, classified in the format used in Table 2.2 of the text. In addition, provide a memorandum note justifying each of your entries.

Transactions

  1. An American clothing manufacturer buys $5000 worth of English tweed for suiting, paying with a ninety-day draft on the sterling account of his own American commercial bank.
  2. An American automobile dealer buys $10,000 worth of English Ford carss from a distributor in New York, paying to the distributor’s bank in New York.
  3. An individual American buys a Rolls-Royce for delivery in England, paying in advance with a check in dollars to the English dealer, in the amount of $6,000.
  4. An American electric power producer contracts to purchase an electric generator costing $100,000 from an English engineering firm, with delivery to be made in June. A down payment of $100,000 is made in dollars to the New York account of the British firm.
  5. An English appliance dealer buys American refrigerators worth $25,000, paying with dollars purchased fron its English bank.
  6. An English film distributer rents a Hollywood film for £10,000, paying the sterling into the English account of the Holywood producer.
  7. An American sugar broker sells a ninety day future on Cuban sugar to a British importer for $15,000, taking payment in dollars from the New York account of the importer.
  8. An English steel making consortium pays its current share, $100,000, into a dollar account to help defray the expenses of a new mining venture. $50,000 is provided out of the group’s own dollar holdings, and the rest is purchased from the dollar holdings of British banks.
  9. An American investor buys 90-day British treasury bills on the London market with £5,000 bought in New York banks and £10,000 bought from London banks.
  10. The British Exchequer makes a special repayment of lend-lease debt of $100,000 by turning over earmarked gold in New York.
  11. An American bank decreases its hedged working balances in London by $50,000.
  12. An Englishman receives, in England, interest coupons worth $1,000, showing accumulated interest on part of his holding of U.S, railroad bonds. He discounts them with his bank.

____________________________

NOTES ON THE
BALANCE OF PAYMENTS PROBLEM

Economics B-60

January 24, 1962
Mr. Harwitz

Apparently standard errors

  1. Impors and exports are recorded as they clear ports. Thus, the Rolls-Royce represents an increase in assets owned abroad by Americans, not an import. A similar remark holds for the signing of the generator contract. Such timing errors should not throw the Balance of Payments out of balance, but they should affect the accuracy of your division between the current and the capital accounts.
  2. There was a very clear correlation between working out a careful debit and credit account for each transaction and getting a consistent set of accounts. The resulting accounts might, of course, differ from mine on grounds of interpretation or timing. But they would balance.
  3. Misuse of “errors and omissions” account. This account is non-zero only because reporting in the real world does not cover both ends of every transaction. Since both ends of every transaction were given to you, it should have been clear that no balancing account was necessary.

The Balance of Payments Exercise

I shall indicate how each of the transactions should be handled, and then draw up the resulting accounts. There are no errors and omissions, so there will be no such entry in the accounts. (-) means debit and (+) means credit.

  1. The purchase of tweed is an import, and therefore a debit, and the matching credit is an increase in U.S. obligations abroad, a capital inflow. The inflow would be cancelled, and replaced by a credit arising from a decrease in U.S. assets abroad, when the draft is actually cashed at the importer’s bank.

Import: – $5000
Increase in s/t liabilities to abroad: + $5000

  1. There are two alternative ways to treat this transaction. The first is to assume that the distributor is an American firm, in which case the transaction is purely internal to the U.S. if the cars have already been brought into New York by the distributor. The second is to assume that the distributor is British, and that the American buyer is taking delivery in New York, or, equivalently, that the American buyer is placing an order that actually required an import by the distributor doing business in New York. In my own accounts, I shall use the first (lazy man’s) interpretation, but the second, if used, would lead to:

Import:  -$10,000
Increase in s/t liabilities to abroad: + $10,000

  1. Since the Rolls has not crossed the border of the U.S., the appropriate debit entry is an increase in U.S. assets abroad. The matching credit entry is an increase in s/t liabilities to abroad (the increase in British holdings of U.S. dollars).

Increase in s/t assets abroad: – $6000
Increase in s/t liabilities to abroad: + $6,000

  1. There was an error in my original typescript, and the total cost of the machinery should have read $1,000,000, not $100,000 as it did. I don’t think this affects the balance of payments very seriously, however. I would be inclined to treat this transaction as made up of an increase in a l/t assets abroad (consisting of the paid-up portion of the contract) and a matching credit arising from an increase in British holdings of U.S. dollars. Thus

Increase in l/t assete abroad: – $100,000
Increase in s/t liabilities to abroad: + $100,000

One could argue, however, that with the correct cost figure the entry should be an increase in l/t assets abroad of $1,000,000, with a matching credit entry of $1,000,000, arising 10% from an increase in British holdings of dollars and 90% from the contractual promise to pay the remaining $900,000.

  1. This transaction is perfectly simple. The export is a credit, and the matching debit is a decrease in s/t liabilities to abroad, which arises from the “repatriation” of U.S. dollars.

Export: +25,000
Decrease in s/t liabilities to abroad: -$25,000

  1. The export of sevices is a credit, and the matching debit is an increase in U.S. assets abroad (in this case an increase in American ownership of English pounds), that is, a capital outflow.

Export of services: +$28,000
Increase in s/t assets abroad: – $28,000

Here, as elsewhere in the exercise, I convert figures in pounds sterling into dollars at the official rate of $2.80/£.

  1. Here, a short-tern foreign asset of the U.S. (a claim for future delivery of non-U.S. sugar) is sold, giving rise to a credit. The matching debit is the decrease in foreign-owned U.S. government liabilities.

Decrease in s/t U.S. assets abroad: + $15,000
Decrease in s/t liabilities to abroad:  – $15,000

  1. There are two alternatives here. The first is to assume that the dollar account of the consortium or joint venture is held in the U.S. In this case, the debit entry is a decrease in dollar holdings abroad ($50,000 held by banks, $50,000 held in private banking accounts by members of the consortium), matching a $100,000 increase in U.S. liabilities to abroad. The liabilities are short-term if the joint venture is a U.S. corporation giving shares for the $100,000 payment. I take this alternative, with the second interpretation. The second alternative is to assume that the dollar account is actually held in London. The transaction then washes out of the U.S. Balance of Payments, being only a transfer of continuing U.S. obligations between foreign owners. On my interpretation, the transaction is recorded thus:

Increase in l/t liabilities to abroad: + $100,000
Decrease in s/t liabilities to abroad: – $100,000

  1. The increase ih assets abroad (a capital inflow) is a debit, valued at $42,000 at the official exchange rate. The matching credits are the decrease in U.S. holdings of pounds sterling ($14,000) and an increase in U.S. obligations to abroad ($28,000 in dollars acquried by British banks).

Increase in s/t assets abroad: – $42,000
Decrease in s/t assets abroad: + $14,000
Increase in s/t Iiabilities to abroad: +28,000

  1. The debit entry is clear: an inflow of monetary gold to the U.S. The matching credit entry is perhaps a little artificial, but the standard procedure would, I think, be a decrease in foreign l/t liabilities (Lend-Lease debts) to the U.S.

Decrease in l/t assets abroad: + $100,000
Import of Monetary Gold: – $100,000

  1. This transaction washes out, since it involves a spot sale of pounds worth $50,000, a sale that would be used to fulfill the futures contract for delivery of pounds. That is the meaning of a “decrease in hedged balances”. I chose not to record it, but if it were recorded it would give rise to a credit from the acquisition of dollars and a debit from the fulfillment of the futures contract.
  2. The interest payment is itself a debit, and enters the current account. The matching credit is the increase in dollar obligations owned abroad (in this instance by the British bank).

Interest payment_ – $1,000
Increase in s/t liabilities to abroad: +$1,000

*  *  *  *  *  *  *  *  *  *  *  *  *

THE U.S. BALANCE OF PAYMENTS (Cf. K, Table 2.2)

Transaction Number
A. Goods and services + $47,000
1,2. Merchandise exports + $53,000 5,6
Merchandise imports –  $ 5,000 1
6. Investment income: debits –  $ 1,000 12
C. Capital and Monetary Gold – $47,000
11,15. Long-term liabilities + $100,000
(Other + $100,000) 8
12, 16. Short-term liabilities -0- 1,3,4,5,7,8,9,12
13, 17. Long-term assets -0-
(U.S. Govt loans repaid + $100,000) 10
(Other Private and banks – $100,000) 4
14, 18. Short-term assets – $47,000
(Private and banks) – $47,000) 3,6,7,9
19. Monetary Gold – $100,000 10
Net errors and omissions -0-

Notes to the Balance of Payments Table

The lines in parenthesis are subtotals, and should not be counted in checking to see that the addition and subtraction are correct. A simple check on the accuracy of the presentation (one that will not work all the time) is to note that each transaction number appears exactly twice. In general, the transaction numbers would appear at least twice, and in any case never only once.

____________________________

FIRST HOUR EXAMINATION

NORTHWESTERN UNIVERSITY
DEPARTMENT OF ECONOMICS

Economics B-60
International Trade

February 7, 1962
Mr. Harwitz

Directions, notes, and hints. Please write on every other page of your blue books, to make marking the examinations easier for me. The total time allowed is 50 minutes, and the set of True-False questions should take twelve minutes. The point count of the questions is the suggested number of minutes. Answer all the true-false questions and two of the remaining four; that is, answer five questions in all. If you answer more than two of the last four questions, I shall choose two of the answers arbitrarily and mark you on them.

If I ask you to comment In detail, I mean that you should set out an explicit theoretical model on which to base your answer. The point of the question, obviously, is to test whether you can handle the theory. In answering the true-false questions, your explanation can be kept to a couple of sentences at most. Be very careful in reading these questions!

  1. True-False. Mark true or false, and explain your choice briefly. (12 minutes)
    1. Multiple exchange rates are prevented by arbitrage because arbitrageurs take long positions in foreign currencies.
    2. Interest arbitrage between two countries (say, the U.S. and Great Britain) serves to keep short-term interest rates in New York and London from diverging.
    3. The very large size of the hedged balances of foreign exchange held by banks as working balances introduces a possible element of instability in the foreign exchange market.
  2. Answer two of the following four questions. They all weigh equally.
    1. “One trouble with the theory of international trade is that it puts too much emphasis on one blade of the Marshallian scissors — the supply side — by trying to determine the direction of trade solely in terms of comparative costs.” Comment in detail.
    2. “The idea that trade will take place between two countries because trading will benefit the countries as a whole is clearly wrong, since trade really takes place between individual firms, regardless of whether or not the countries of which the firns are residents benefit from the individual trading.” Comment in detail, using the concept of the production-possibility locus.
    3. An underdevloped country that trades on an international gold standard undertakes a development project (say, a road-building program) with the aid of an IBRD loan covering the direct foreign exchange requirements of the program. Show what is likely to happen to the balance of trade on current account and to the gold reserves of the country. (Certain assumptions have to be made. Make then explicitly!)
    4. The Phillipines have just gone on a freely-fluctuating exchange rate. Suppose a direct competitor in sales of tropical food crops to the United States (say, Panama) produces a bumper crop, which the competitor cannot store and must try to sell immediately. What happens to the balance of trade and the foreign exchange rates of the Phillipines? (Hints: you can make things easier for you and for me if you restrict your attention to the Phillipines and the United States. Again, certain assumptions need to be made explicitly.

____________________________

SECOND HOUR EXAMINATION

NORTHWESTERN UNIVERSITY
DEPARTMENT OF ECONOMICS

Economics B-60
International Trade

February 28, 1962
Mr. Harwitz

Directions. Please write on every other page of the blue books.

  1. Short answer questions. Answer 6 of the following 8 questions. Each question is worth four points.
    1. Show that an import of goods on current account, taken by itself, will in fact reduce the domestic money supply of the importing country. (HINT: examine the effect of payment for the transaction on the balance sheet of the domestic banking system.)
    2. Show that an increase in the forward exchange rate between dollars and pounds, with the short-term interest rates in the U.S. and Great Britain fixed, will cause a rise in the current spot rate.
    3. “The fact that Nigeria had a large export surplus vis-a-vis Great Britain during World War II, and that the sterling proceeds of the surplus were blocked in British banks, meant that Nigeria did less domestic investing during that period than she might otherwise have done.” True or false, and why?
    4. Why would a “successful” protective tariff be a poor revenue tariff? (Please draw a picture illustrating the point.)
    5. Under what circumstances may one country in a 2-country world increase its share of the gains from trade by the imposition of an import tariff?
    6. Back in the dear dead days of the “dollar shortage” (the late 1940’s), it was suggested that Europe was justified in imposing tariffs or quotas against American goods because the United States had an advantage in every line of production as a result of the War. What’s wrong with the suggestion?
    7. Define a “beggar-thy-neighbor” tariff policy, and show the effects of such a policy on the country imposing the tariff.
    8. “The protective effect of a tariff is independent of the elasticity of domestic demand in the country imposing the tariff.” True or false, and why?
  1. Medium-long answers. Answer 2 of the following 3 questions. Each question is worth 13 points.
    1. It is not unreasonable to argue that any effect achievable by means of a tariff could equally well be achieved by means of a subsidy for import-competing industries. (a) Is this always true? (b) What in fact is the basis of the argument if and when it is true?
    2. Suppose that in 1946 the U.S. decided to lend Great Britain $50,000,000 to help the British recover from the destruction of its capital stock consequent upon World War II. What criteria should be applied for deciding whether the loan should be in the form of capital goods or in the form of dollars that could be used to finance imports of either capital goods or consumer goods? (Assume in this case a 2-country world.) What application does this kind of argument have in evaluating the usefulness of our present policy of embargoing trade in strategic materials with the Communist bloc, while allowing free trade in “non-strategic materials”?
    3. Compare the advantages and disadvantages of direct investment versus long-term lending from the point of view of the receiving country.

____________________________

FINAL EXAMINATION

NORTHWESTERN UNIVERSITY
DEPARTMENT OF ECONOMICS

Economics B-60
International Trade

March 12, 1962
Mr. Harwitz

Instructions. Please write on every other page of your blue books, as usual. The point count on the questions is equal to the suggested time you should take to answer them, As before, I shall choose the appropriate number of answers and grade you on them in sections where you answer more questions than I ask you to.

I. Definitions. Answer 10 of the following 15. (3 minutes each)
Note an example or draw a picture if it seems helpful.

    1. Foreign trade multipliers.
    2. Elasticity optimism and pessimism.
    3. Hedging function of the foreign exchange market.
    4. Exchange control system.
    5. Errors and omissiors in the balance of payments accounts.
    6. Bill of exchange.
    7. Gold sterilization.
    8. Protective effect of a tariff.
    9. Revenue effect of tariff.
    10. Redistibutive effect of a tariff.
    11. Balance of trade.
    12. Multilateral exchange clearing.
    13. Interest arbitrage.
    14. Multiple cross rates.
    15. Purchasing power parity.

II. Answer one of the following two. (10 minutes.)

    1. (a) Show that the excess demand for foreign currency is exactly equal to the excess of imports over exports when there are no autonomous movements in capital or gold.
      (b) Define the excess demand for foreign currency when there may be autonomous movements on capital account. What is the effect on the domestic money supply of positive excess demand for foreign currency?
    2. In current terminology, the United States Balance of Payments is said to be in deficit condition if there are compensating outflows of gold or inflows of capital. Show that this can happen even if the balance of trade is in surplus condition on the usual definition. Relate this to the U.S. experience in the last decade.

III. Answer one of the following two. (15 minutes)

    1. F. P. Graham has argued that reciprocal demand has no influence on the relative prices of internationally traded commodities. In the context of a 2-country, 2-good, constant-opportunity-cost model, he is right in the special circumstance that one country is exceedingly large relative to the other. Show why, and show why this may be considered a rather special case.
    2. One can characterize naive comparative cost doctrine as saying that factor endowments determine the goods that a country will import and those it will export. Sophisticated doctrine, like mine, says that a country will export goods the prices of which are relatively lower before trade (in isolation) in the potential exporting country than they are in the potential importer.

IV. Answer one of the following two. (15 minutes)

    1. It has been argued that an examination of the historical evidence indicates that the 19th century adjustment mechanism under the gold standard was not the classical price-specie-flow mechanism. Indicate another mechanism under which the draining-off of gold in a deficit country and the build-up of gold reserves in a surplus country would give rise to an equilibrating counter-flow of capital items[?] in the balance of payments and/or a shift in the determinants of the balance of trade in the equilibrating direction.
    2. (a) Define the term “gold points” (or the equivalent “gold-import and gold-export points”).
      (b) What is the effect on the U.S. gold points if the Treasury imposes a charge for the conversion of goid into currency and vice-versa?
      (c) Keynes proposed, in the Treatise on Money (Vol. II, Ch. 34, Sec. iii), that it would be useful for a country that wished to isolate its domestic money market as much as possible from the repercussions of international situations to introduce a wide spread between the gold points. Precisely what do you think he meant, and in what way do you think the proposal would accomplish its purpose? What combination of adjustment mechanisms did he apparently have in mind?

V. Answer one of the following two, (15 minutes)

    1. Quote from Mr. Louis d’Or, president of the Mercantile Bank of Upper Lower: “The United States would be much healthier economically if, like Germany, she competed hard in international markets, kept inflation down, and built up a healthy surplus in the balance of trade. Right now, the country is in bad shape as an international competitor because of the spend-thrift policies of the current” Is Louis right about Germany being healthy or about the desirability of the U.S. getting like Germany (economically, that is)? Comment in detail on the logic, the definitions, the facts.
    2. Quote from T. Tock, president of the Worthless Watch Company, Waltham, Massachusetts: “I don’t approve of this Unamerican (spelling?) scheme of direct subsidies to business. All we watchmakers want and need is a chance to compete on even terms with the cheap foreign labor. A small, scientific tariff will do for us. That’s the best way.” Is it? Yes or no, why, and from who’s point of view?

VI. Answer one of the following two.
(15 minutes)

    1. A not entirely accurate description of the English international trade position of the early 1920’s would suggest that she had structural unemployment in one of her most important export industries, shipbuilding. At that time, Mr. Churchill re-established the gold standard at the pre-war par, which was in effect an appreciation of the pound relative to other currencies. Evaluate the decision in terms of the remedies appropriate to structural disequilibrium in the export industries. Justify the remedies you say are appropriate, of course.
    2. Consider a case in which there are 2 goods, 2 factors, and 2 countries. One of the countries is relatively well endowed with capital, the other relatively well endowed with labor. Furthermore, the capital-rich country is running a continuing trade surplus with the other country, which is underdeveloped (of course), and is lending to the underdeveloped country on a regular basis. Classical theory then leads to the conclusion that, eventually, trade between the two countries must cease, as the endowment of capital in the underdeveloped country is sufficiently increased. Comment in detail.

Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library. Economists’ Papers Archive. Robert W. Clower Papers, Box 4, Folder “B-60. International Trade Exams, 1962.”

Image Source: Pierre S. DuPont High School senior portrait of Mitchell Harwitz in the yearbook Pierrian 1950.