Category: Business Cycles

Columbia. Wesley Clair Mitchell Reflects on his Personal Research Style. 1928

Post author By Irwin Collier
Post date 2024-10-10

This post provides a transcription of Wesley Clair Mitchell’s original reply to methodological questions posed to him by his younger Columbia colleague John Maurice Clark in 1928. Clark was so impressed with Mitchell’s reply that he had it published in 1931 and later then reprinted in 1952 (see links below). For autobiographical context I have included a brief statement by Mitchell, one of Decatur, Illinois’ favorite sons, that was written shortly after his methodological reflections.

Fun Fact: Adolph C. Miller, who was one of Mitchell’s teachers at the University of Chicago and later his colleague at Berkeley, was married to Mary Sprague, older sister of Mitchell’s wife, Lucy Sprague.

Coming attraction: We will learn more about Wesley Clair Mitchell’s parents and the Baptist grand-aunt who raised his mother in a later post.

______________________

Decatur Herald (Decatur, Illinois)
7 July 1929, p. 44

Mitchell One of First To Prove Business Cycle

Every business man in the United States is familiar now with the theory of the business cycle. Comparatively few, even in Decatur, probably know that it was a former Decaturian, Dr Wesley C. Mitchell, who did the pioneer work in economic research establishing the theory of a business cycle.

“My father and mother were John Wesley Mitchell and L. Medora McClellan Mitchell.

“After living several years opposite the Stapps Chapel, we moved out to a ten-acre place on what later became Leafland avenue. There were seven children and we all went through Decatur schools. My High school class was 1893; but I dropped out in the fourth year in order to push more rapidly my preparation for taking college entrance examinations. In that way I entered the University of Chicago in the autumn of ’93. From that time forward I returned to Decatur only during vacations until the time when my parents moved to Louisiana about 1902.

Studied In Germany

“My undergraduate work was done at the University of Chicago. Graduating in 1896, I received a fellowship which permitted me to go on immediately with postgraduate work. The year ’97-98 I spent on a traveling fellowship in Germany and Austria. The next year I was back at Chicago receiving the degree of Doctor of Philosophy summa cum laude in ’99. My chief subjects were economics and philosophy.

“No more congenial opening turning up, I spent 1900 in the Census Office at Washington in a small Division of Analysis and Research presided over by Walter F. Willcox of Cornell. Next year I was appointed instructor at the University of Chicago and taught there in 1900-02. The end of this period I published my first book, “A History of the Greenbacks.”

“One of my teachers at Chicago, Professor A. C. Miller, now a member of the Federal Reserve board, was called to the University of California as head of the Department of Economics. He asked me to go with him. As a result I lived from 1902 to 1912 in Berkeley as an assistant, associate and finally full professor of economics. While there I published a second volume of my monetary studies called “Gold Prices and Wages in the United States”(1908), and also a book called “Business Cycles” (1913). I also spent one of these years lecturing at Harvard.

Helped to Launch School

“In 1912 I married Lucy Sprague a daughter of Otho S. A. Sprague of Chicago. We went to Europe for a year and then came to live in New York city where I became attached to Columbia University. During the war I was chief of the Price Section in the Division of Planning and Statistics in the War Industries board. After the war I helped organize the New School for Social Research in New York and later the National Bureau of Economic Research, with which I am still connected as one of the directors.

“In these later years my investigations have been carried on very largely in conjunction with the National Bureau’s programs. My latest book, “Business Cycles: The Problem and Its Setting,” was published in 1927, and I am now working upon the supplementary volume to be called “Business Cycles: The Rhythm of Business Activity.”

“It is many years since I have been in Decatur or had an opportunity to talk with any of my old friends, aside from Will Westerman who graduated from the Decatur High school a little before my time, and who is now one of my colleagues at Columbia, where he is a professor of ancient history.

“It will be a great pleasure to get the records of other old friends which your Centenary number will doubtless contain. Accept my congratulations upon this enterprise.

WESLEY C. MITCHELL

______________________

NBER Memorial Volume
for Wesley Clair Mitchell

Wesley Clair Mitchell: The Economic Scientist, National Bureau of Economic Research, New York, 1952.

______________________

Backstory:

Memorial Address
by John Maurice Clark.

“I had undertaken to analyze his methods of studying business cycles, for a volume of such analyses, edited by Stuart Rice; and as part of my preparations I had written to Mitchell, asking him some rather searching questions. In reply, he sent me an autobiographical sketch of his intellectual development, starting with his adolescent arguments over theology with his grandaunt. The letter was close to three thousand words long and so beautifully written as to be fit for publication without the change of a comma. Much against his desires, Mitchell was persuaded to allow this correspondence to be published, as part of the study which had occasioned it.* Its great value, naturally, lay in the fact that it had been written without a thought of publication, merely in a characteristically generous response to my request for inside information. More than anything else I know in print, it gives not only his typical mental attitudes, but the flavor of his genially pungent personality.”

Source: Wesley Clair Mitchell: The Economic Scientist, National Bureau of Economic Research (New York, 1952), p. 142.

*Appendix: “The Author’s Own Account of His Methodological Interests” to John Maurice Clark’s “Preface to Social Economics” in Methods in Social Science: A Case Book. Edited by Stuart A. Rice for the Social Science Research Council, Committee on Scientific Method in the Social Sciences. University of Chicago Press, 1931. Pages 673 ff.

______________________

Typed copy of Wesley Clair Mitchell’s Response to Questions
posed him by John Maurice Clark

[Handwritten note: “Revised Feb 11, 1929”]

Huckleberry Rocks, Greensboro, Vt.
August 9, 1928.

Dear Maurice:

I know no reason why you should hesitate to dissect a colleague for the instruction, or amusement, of mankind. Your interest in ideas rather than in personalities will be clear to any intelligent reader. Nor is the admiration I feel for you skill as an analyst likely to grow less warm if you take me apart to see how I work. Indeed, I should like to know myself!

Whether I can really help you is doubtful. The questions you put are questions I must answer from rather hazy recollections of what went on inside me thirty and forty and more years ago. Doubtless my present impressions of how I grew up are largely rationalizations. But perhaps you can make something out of the type of rationalizations in which I indulge.

* * * * * * * * * * *

Concerning the inclination you note to prefer concrete problems and methods to abstract ones, my hypothesis is that it got started, perhaps manifested itself would be more accurate, in childish theological discussions with my grand aunt. She was the best of Baptists, and knew exactly how the Lord had planned the world. God is love; he planned salvation; he ordained immersion; his immutable word left no doubt about the inevitable fate of those who did not walk in the path he had marked. Hell is no stain upon his honor, no inconsistency with love. — I adored the logic and thought my grand aunt flinched unworthily when she expressed hopes that some back-stairs method might be found of saving from everlasting flame the ninety and nine who are not properly baptized. But I also read the bible and began to cherish private opinions about the character of the potentate in Heaven. Also I observed that his followers on earth did not seem to get what was promised them here and now. I developed an impish delight in dressing up logical difficulties which my grand aunt could not dispose of. She always slipped back into the logical scheme, and blinked the facts in which I came to take a proprietary interest.

I suppose there is nothing better as a teething-ring for a child who likes logic than the garden variety of Christian theology. I cut my eye-teeth on it with gusto and had not entirely lost interest in that exercise when I went to college.

There I began studying philosophy and economics about the same time. The similarity of the two disciplines struck me at once, I found no difficulty in grasping the differences between the great philosophical systems as they were presented by our text-books and our teachers. Economic theory was easier still. Indeed, I thought the successive systems of economics were rather crude affairs compared with the subtleties of the metaphysicians. Having run the gamut from Plato to T. H. Green (as undergraduates do) I felt the gamut from Quesnay to Marshall was a minor theme. The technical part of the theory was easy. Give me premises and I could spin speculations by the yard. Also I knew that my “deductions” were futile. It seemed to me that people who took seriously the sort of articles which were then appearing in the Q.J.E. might have a better time if they went in for metaphysics proper.

Meanwhile I was finding something really interesting in philosophy and in economics. John Dewey was giving courses under all sorts of titles and every one of them dealt with the same problem — how we think. I was fascinated by his view of the place which logic holds in human behavior. It explained the economic theorists. The thing to do was to find out how they came to attack certain problems; why they took certain premises as a matter of course; why they did not consider all the permutations and variants of those problems which were logically possible; why their contemporaries thought their conclusions were significant. And, if one wanted to try his own hand at constructive theorizing, Dewey’s notion pointed the way. It is a misconception to suppose that consumers guide their course by ratiocination — they don’t think except under stress. There is no way of deducing from certain principles what they will do, just because their behavior is not itself rational. One has to find out what they do. That is a matter of observation, which the economic theorists had taken all too lightly. Economic theory became a fascinating subject — the orthodox types particularly — when one began to take the mental operations of the theorists as the problem, instead of taking their theories seriously.

Of course Veblen fitted perfectly into this set of notions. What drew me to him was his artistic side. I had a weakness for paradoxes — Hell set up by the God of love. But Veblen was a master developing beautiful subtleties, while I was a tyro emphasizing the obvious. He did have such a good time with the theory of the leisure class and then with the preconceptions of economic theory! And the economists reacted with such bewildered soberness: There was a man who really could play with ideas! If one wanted to indulge in the game of spinning theories who could match his skill and humor? But if anything were needed to convince me that the standard procedure of orthodox economics could meet no scientific tests, it was that Veblen got nothing more certain by his dazzling performances with another set of premises. His working conceptions of human nature might be a vast improvement: he might have uncanny insights; but he could do no more than make certain conclusions plausible — like the rest. How important were the factors he dealt with and the factors he scamped was never established.

That was a sort of problem which was beginning to concern me. William Hill set me a course paper on “Wool Growing and the Tariff.” I read a lot of the tariff speeches and got a new sidelight on the uses to which economic theory is adapted, and the ease with which it is brushed aside on occasion. Also I wanted to find out what really had happened to wool growers as a result of protection. The obvious thing to do was to collect and analyze the statistical data. If at the end I had demonstrated no clear-cut conclusion, I at least knew how superficial were the notions of the gentlemen who merely debated the tariff issue, whether in Congress or in academic quarters. That was my first “Investigation” — I did it in the way which seemed obvious, following up the available materials as far as I could, and reporting what I found to be the “facts.” It’s not easy to see how any student assigned this topic could do much with it in any other way.

A brief introduction to English economic history by A. C. Miller, and unsystematic readings in anthropology instigated by Veblen reenforced the impressions I was getting from other sources. Everything Dewey was saying about how we think, and when we think, made these fresh materials significant, and got fresh significance Itself. Men had always deluded themselves, it appeared, with strictly logical accounts of the world and their own origin; they had always fabricated theories for their spiritual comfort and practical guidance which ran far beyond the realm of fact without straining their powers of belief. My grand aunt’s theology; Plato and Quesnay; Kant, Ricardo and Karl Marx; Cairnes and Jevons, even Marshall were much of a piece. Each system was tolerably self-consistent — as if that were a test of “truth”! There were realms in which speculation on the basis of assumed premises achieved real wonders; but they were realms in which one began frankly by cutting loose from the phenomena we can observe. And the results were enormously useful. But that way of thinking seemed to get good results only with reference to the simplest of problems, such as numbers and spatial relations. Yet men practiced this type of thinking with reference to all types of problems which could not be treated readily on a matter-of-fact basis — creation, God, “just” prices in the middle ages, the Wealth of Nations in Adam Smith’s time, the distribution of incomes in Ricardo’s generation, the theory of equilibrium in my own day.

There seemed to be one way of making real progress, slow, very slow, but tolerably sure. That was the way of natural science. I really knew nothing of science and had enormous respect for its achievements. Not the Darwinian type of speculation which was then so much in the ascendant — that was another piece of theology. But chemistry and physics. They had been built up not in grand systems like soap bubbles; but by the patient processes of observation and testing — always critical testing — of the relations between the working hypotheses and the processes observed. There was plenty of need for rigorous thinking, indeed of thinking more precise than Ricardo achieved; but the place for it was inside the investigation so to speak — the place that mathematics occuped in physics as an indispensable tool. The problems one could really do something with in economics were problems in which speculation could be controlled.

That’s the best account I can give off hand of my predilection for the concrete. Of course it seems to me rather a predilection for problems one can treat with some approach to scientific method. The abstract is to be made use of at every turn, as a handmaiden to help hew the wood and draw the water. I loved romance — particularly William Morris’ tales of lands that never were — and utopias, and economic systems, of which your father’s when I came to know it seemed the most beautiful; but these were objects of art, and I was a workman who wanted to become a scientific worker, who might enjoy the visions which we see in mountain mists but who trusted only what we see in the light of common day.

* * * * * * * * * * *

Besides the spice of rationalizing which doubtless vitiates my recollections — uncontrolled recollections at that — this account worries me by the time it is taking yours as well as mine. I’ll try to answer the other questions concisely.

Business cycles turned up as a problem in the course of the studies which I began with Laughlin. My first book on the greenbacks dealt only with the years of rapid depreciation and spasmodic wartime reaction. I knew that I had not gotten to the bottom of the problems and wanted to go on, so I compiled that frightful second book as an apparatus for a more thorough analysis. By the time it was finished I had learned to see the problems in a larger way. Veblen’s paper on “Industrial and Pecuniary Employments” had a good deal to do with opening my eyes. Presently I found myself working on the system of prices and its place in modern economic life. Then I got hold of Simmel’s Theorie des Geldes — a fascinating book. But Simmel, no more than Veblen, knew the relative importance of the factors he was working with. My manuscript grew — it lies unpublished to this day. As it grew in size it became more speculative. I was working away from any solid foundation — having a good time, but sliding gayly over abysses I had not explored. One of the most formidable was the recurring readjustments of prices, which economists treated apart from their general theories of value, under the caption “Crises.” I had to look into the problem. It proved to be susceptible of attack by methods which I thought reliable. The result was the big California monograph. I thought of it as an introduction to economic theory.

* * * * * * * * * * *

This conception is responsible for the chapter on “Modern Economic Organization.” I don’t remember precisely at what stage the need of such a discussion dawned upon me. But I have to do everything a dozen times. Doubtless I wrote parts of that chapter fairly early and other parts late as I found omissions in the light of the chapters on “The Rhythm of Business Activity.” Of course, I put nothing in which did not seem to me strictly pertinent to the understanding of the processes with which the volume dealt. That I did not cover the field very intelligently, even from my own viewpoint, appears from a comparison of the books published in 1913 and 1927. Doubtless before I am done with my current volume, I shall be passing a similar verdict upon the chapter as I left it last year.

* * * * * * * * * * *

As to the relation between my analytic description and “causal” theory I have no clear ideas — though I might develop some at need. To me it seems that I try to follow through the interlacing processes involved in business expansion and contraction by the aid of everything I know, checking my speculations just as far as I can by the data of observation. Among the things I “know” are the way in which economic activity is organized in business enterprises, and the way these enterprises are conducted for money profits. But that is not a simple matter which enables me to deduce certain results — or rather, to deduce results with certainty. There is much in the workings of business technique which I should never think of if I were not always turning back to observation. And I should not trust even my reasoning about what business men will do if I could not check it up. Some unverifiable suggestions do emerge; but I hope it is always clear that they are unverified. Very likely what I try to do is merely carrying out the requirements of John Stuart Mill’s “complete method.” But there is a great deal more passing back and forth between hypotheses and observation, each modifying and enriching the other, than I seem to remember in Mill’s version. Perhaps I do him injustice as a logician through default of memory; but I don’t think I do classical economics injustice when I say that it erred sadly in trying to think out a deductive scheme and then talked of verifying that. Until a science has gotten to the stage of elaborating the details of an established body of theory — say finding a planet from the aberrations of orbits, or filling a gap in the table of elements — it is rash to suppose one can get an hypothesis which stands much chance of holding good except from a process of attempted verification, modification, fresh observation, and so on. (Of course, there is a good deal of commerce between most economic theorizing and personal observation of an irregular sort — that is what has given our theories their considerable measure of significance. But I must not go off into that issue.)

* * * * * * * * * * *

Finally, about the table of decils. One cannot be sure that a given point on the decil curves represents the relative price of just one commodity or the relative wage of just one industry. For it often happens, particularly near the center of the range covered, that several commodities and industries have identical relatives in a certain year and these identical relatives may happen to be decil points. But I think the criticisms you make of my interpretations of the movements of the decils are valid. Frederick C. Mills makes similar strictures in his Behavior of Prices, pp. 279 following, particularly p. 283 note. The fact is that when writing the first book about business cycles I seem to have had no clear ideas about secular trends. The term does not occur in the index. Seasonal variations appear to be mentioned only in connection with interest rates. Of course certain rough notions along these lines may be inferred; but not such definite ideas as would safeguard me against the errors you point out. What makes matters worse for me, I was behind the times in this respect. J.P. Norton’s Statistical Studies in the New York Money Market had come out in 1902, I ought to have known and made use of his work.

That is only one of several serious blemishes upon the statistical work in my 1913 volume. After Hourwich left Chicago, and that was before I got deep into economics, no courses were given on statistics in my time. I was blissfully ignorant of everything except the simplest devices. To this day I have remained an awkward amateur, always ready to invent some crude scheme for looking into anything I want to know about, and quite likely to be betrayed by my own apparatus. I shall die in the same sad state.

* * * * * * * * * * *

I did not intend to inflict such a screed upon you when I started. Now that I have read it over, I fell compunctions about sending it. Also some hesitations. I don’t like the intellectual arrogances which I developed as a boy, which stuck by me in college, and which I shall never get rid of wholly. My only defense is that I was made on a certain pattern and had to do the best I could — like everybody else. Doubtless I am at bottom as simple a theologian as my grand aunt. The difference is that I have made my view of the world out of the materials which were available in the 1880’s and ’90’s, whereas she built, with less competent help than I had, out of the material available in the farming communities of the 1840’s and ’50’s. Perhaps you have been able to develop an outlook on the world which gives you a juster view than I had of the generations which preceded me and of the generation to which I belong. If I did not think so, I should not be sending you a statement so readily misunderstood.

Ever yours,
Wesley C. Mitchell.
(Copy by J.M.C. )

Source: Columbia University Libraries, Special Manuscript Collections. Mitchell, W.C. Collection. Box C8, Ch-Ec. Folder “Clark, John Maurice v.p., 8 Apr 1926 & 21 Apr 1927 to Wesley C. Mitchell 2 a.l.s. (with related material)”.

Image: Wesley Clair Mitchell. Detail from a departmental photo dated “early 1930’s” in Columbia University Libraries, Manuscript Collections, Columbiana. Department of Economics Collection, Box 9, Folder “Photos”. Colorized at Economics in the Rear-view Mirror.

Tags ClarkJM, Hourwich, Laughlin, MillerAC, MillsFC, Mitchell, Veblen, Wm Hill

Business Cycles Exam Questions Harvard Money and Banking Syllabus

Harvard. Exams and assigned reading for money, banking, commercial crises. Williams and Harris, 1938-1939

Post author By Irwin Collier
Post date 2024-09-03

In the previous post, Economics 41, 938-39 (Paper topics), historians of modern economics will find a transcription of 31 typed pages of paper topics with suggested references for the Harvard undergraduate course “Money, Banking and Commercial Crises” taught by Professor John H. Williams and Associate Professor Seymour E. Harris in 1938-39.

Today’s post adds enrollment figures, course reading assignments (when found) and the final exams for that course.

_________________________

Course Material from a Few Other Years

1937-38
1940-41
1941-42

_________________________

Course Announcement

Economics 41. Money, Banking, and Commercial Crises

Mon., Wed., and (at the pleasure of the instructor) Fri., at 2. Professor Williams and Associate Professor Harris

Source: Harvard University Faculty of Arts and Sciences. Announcement of the Courses of Instruction during 1938-39 (second edition), p. 148.

_________________________

Course Enrollment

[Economics] 41. Professor Williams and Associate Professor Harris. — Money, Banking, and Commercial Crises.

Total 181: 1 Graduate, 37 Seniors, 106 Juniors, 32 Sophomores, 1 Freshman, 4 Others.

Source: Harvard University. Annual Report of the President of Harvard College, 1938-39, p. 98.

_________________________

First Term Reading List
[Note: First term reading list is identical to that for 1937-38]

ECONOMICS 41
Readings: First Term

The Nature and Functions of Banking
1. Dunbar, “Theory and History of Banking”, Chs. 1, 2, 3, 4, pp. 1-60
2. White, “Money and Banking”, Ch. 16, pp. 349-372
The Creation of Deposits
1. Phillips, “Bank Credit”, Ch. 3, pp. 32-77
2. Currie, “Supply and Control of Money in the U.S.” Chs. 5, 6, 7, pp. 46-63.
Note Issue
1. Dunbar, “Theory and History of Banking”, Ch. 5, pp. 60-81
2. Currie, “Supply and Control”, Ch. 10, pp. 110-115

Commercial Loan Theory
1. Robertson, “Money”, Ch. 5, рр. 92-117
2. Currie, “Supply and Control”, Ch. 4, pp. 34-46
U.S. Banking History
1. White, “Money and Banking”, Chs. 18, 19, 20, 21, 22, 23, pp. 387-529
The Federal Reserve System
1. Dunbar, “Theory and History”, Ch. 6, pp. 81-110
2. Burgess, “Federal Reserve Banks and the Money Market”, pp. 1-327
3. Federal Reserve Bulletin, July, 1935: “Supply and Use of Member Bank Reserve Funds”, pp. 419-428
4. Currie, “Supply and Control”, etc., Chs. 8, 9, pp. 83-110
5. Hardy, “Credit Policies of the Federal Reserve System”, Chs. 3, 4, 5, 6, 7, 8, 9, 10, 11, рр. 34-243
Recent Banking Changes
1. White, “Banking”, Chs. 29, 30, pp. 670-738.
Foreign Banking Systems
1. Dunbar, “Theory and History”, Chs, 8, 9, 10, pp. 139-235

Reading Period
January 5-18, 1939

Economics 41: Read one of the following:

Hardy, Federal Reserve Policy.
Hawtrey, Art of Central Banking, pp. 116-303.
Keynes, Treatise on Money, Vol. II, Book VII.

Reading Period
May 8-31, 1939

Economics 41: Read one of the following:

a. Robertson and Pigou, Economic Essays and Addresses, pp. 95-138.
b. Robertson, Banking Policy and Price Level.
Durbin, Problems of Credit Policy.
Keynes, Tract on Monetary Reform.
Keynes, Treatise on Money, Ch. 30 and Book VII.
Committee on Finance and Industry (Macmillan Report), Report and Addenda 1 and 3.
Wicksell, Interest and Prices.
Hawtrey, Capital and Employment, Chs. 7-11 inclusive.
Harrod, Trade Cycle.
Marget, Theory of Prices, Chs. XI-XVI.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003.Box 2, Folder “Economics 1938-1939”.

_________________________

1938-39
HARVARD UNIVERSITY
ECONOMICS 41
Money and Banking
[Mid-Year Examination]

(One hour.) The Supply and Use of Member Bank Reserve Funds.

	(In millions of dollars)
	From June 1927 to Dec. 1927	From Dec. 1927 to June 1928
Bills discounted	+132	+423
Bills bought	+170	–163
U.S. Government securities	+227	–391
Other Reserve Bank credit	–11	–14
Monetary gold stock	–204	–282
Treasury currency	+3	+1
Money in circulation	+238	–345
Treasury cash and deposits with Federal Reserve banks	–12	–14
Non-member deposits	–6	+1
Other Federal Reserve accounts	+6	+21
Member Bank reserve balances	+91	–89

(a) What is the meaning of each of the above items?

(b) Present, in the form of a balance, a statement indicating the effects of changes in the above items on member bank reserve balances for each of the two periods.

(c) What conclusions do you draw regarding (1) the condition of the money market, (2) member bank policy, (3) Federal Reserve policy?

Write on one of the following questions.

(a) What is the “Commercial Loan Theory” of bank assets? Would banking policy, based on this theory, provide the right quality of bank assets? the right quantity of money?

(b) Discuss the functions of reserves in a modern banking system, distinguishing the case of member banks from that of central banks, and give your views on the various solutions that have been proposed for the reserve problem.

(c) What are the attributes of a good bank note? Give your critical opinion of the following: the national bank note, the Bank of England note, the Bank of France note, the Federal Reserve note.

Trace

(a) the evolution of Federal Reserve objectives since the establishment of the system and indicate to what extent you think these objectives have been attained;

(b) the development of instruments of control of the Federal Reserve system, and evaluate their effectiveness.

Discuss the banking weaknesses in the U.S. revealed by crises in the period (a) before the war, or (b) after the war.
Write on one of the following: (Reading period.)

(a) Keynes: Compare the effectiveness of central bank control over the supply of money in England and the U.S.

(b) Hardy: Discuss Federal Reserve policy and speculation, 1927 to 1929.

(c) Hawtrey: Using historical illustrations, discuss the effect of the experience of the Bank of England on current central bank theory and practice.

Source: Harvard University Archives. Harvard University, Mid-year Examinations 1852-1943. Box 12. Papers Printed for Mid-Year Examinations [in] History, History of Religions, … , Government, Economics, … , Naval Science (January-February, 1939) in the bound volume Mid-Year Examinations—1939.

1938-39
HARVARD UNIVERSITY
ECONOMICS 41
[Year-end Examination]

Answer Question 1 and two others.

Reading Period
Present and comment upon the views expressed in the reading period assignment on the relation between (a) money and prices or (b) money and economic fluctuations.
Monetary authorities try increasingly to influence the rate of interest. Are they likely to be reasonably successful? If they are successful in controlling the rate of interest, are they likely to attain what you consider the proper objectives of monetary policy?
Answer (a) or (b).
1. Is it your view that the recent breakdown of the gold standard is to be explained by poor management or by fundamental economic factors?
2. What advantages over the gold standard has a system of free or variable exchanges?
Discuss one of the following:
1. Under-consumption theories of the trade cycle
2. Investment theories of the trade cycle
3. Monetary theories of the trade cycle
Compare the treatment of velocity in the Fisher and the Cambridge versions of the quantity theory.
“Nowhere do conservative notions consider themselves more in place than in currency; yet nowhere is the need of innovation more urgent.” Discuss.

Source: Harvard University Archives. Harvard University. Final Examinations, 1853-2001. Box 4: Papers Printed for Final Examinations [in] History, History of Religions, … , Government, Economics, … , Naval Science (June, 1939).

Image Source: 1935 one U.S. dollar silver certificates. From the United States Paper Money Currency webpage at the U.S. Paper Money website.

Tags Harris, WilliamsJH

Business Cycles Harvard Macroeconomics Money and Banking Paper Topics Suggested Reading

Harvard. Suggested paper topics and references for money and banking. Williams and Harris, 1938-1939

Post author By Irwin Collier
Post date 2024-09-02

Economics in the Rear-view Mirror is extremely proud to provide a comprehensive, granular set of references suggested for 137 possible topics for papers to be written in the undergraduate course “Money, Banking, and Commercial Crises” jointly taught by Professor John Henry Williams and Associate Professor Seymour Edwin Harris during the 1938-39 academic year at Harvard College. We have before us the vista of the breaking dawn of Keynesian macroeconomics as experienced by Harvard undergraduates(!).

Warning: I have encountered numerous misprints and I have corrected/edited when noticed. I have tried to transcribe accurately but the devil of typos is unlikely to be contained over 30 pages. Nonetheless I believe the value of the material transcribed below is hardly diminished by cooking and serving this document on the rare side. Certain items are included in many topics, giving an indication of their scope but also an indication of their importance in the eyes of the instructors.

_________________________

Course Material from the Other Years

1937-38
1940-41
1941-42

_________________________

Source: Harvard University Archives.

_________________________

Harvard. Report guidelines and exam for commercial crises and trade cycles. Andrew, 1905-1906

Post author By Irwin Collier
Post date 2024-01-29

While the exam questions for A. Piatt Andrew’s course on commercial crises and trade cycles for 1905-06 have been transcribed and posted earlier, this post adds his “Suggestions with regard to first report and accompanying chart.” This artifact provides a taste of an actual course assignment.

__________________________

Previously posted

All of Andrew’s exams from his commercial crises and trade cycles course at Harvard for the academic years 1902-03 through 1907-08.

__________________________

Commercial Crises
and Cycles of Trade
Economics 12b
1905-06

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

Course Enrollment
Commercial Crises
and Cycles of Trade
1905-06

[Economics] 12b ¹hf. Ass’t. Professor Andrew. Commercial Crises and Cycles of Trade.

Total 55: 9 Graduates, 20 Seniors, 20 Juniors, 5 Sophomores, 1 Other.

Source: Harvard University. Report of the President of Harvard College, 1905-190 6, p. 72.

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

ECONOMICS 12b
SUGGESTIONS WITH REGARD TO FIRST REPORT AND ACCOMPANYING CHART

I. Concerning the Chart

Neatness is desirable; accuracy essential.
Before beginning the chart note the highest and the lowest figures, and devise a scale so that both may be included on the paper, but upon the largest possible plan.
When several sets of figures are to be included upon the same chart, if possible, draw the various lines upon the same scale. If, by so doing, however, variations in one of the lines will be too small to be easily discerned, increase the scale for this line.
Note the decimal division of the profile paper. Do not start with other than a decimal number as a basis. If you have a period covering 20 or 30 years a good plan is to let one of the large squares represent two years.
When two or more decades are included mark the decennial years clearly with a heavier line than the other years.
Bring the figures in every case as nearly to date as possible.
Note on bottom of chart in small letters the source of your statistics, volume and page.
Note also on chart whether the statistics are for the fiscal, calendar, or crop year, — or the year ending at what date.
Place title and your own name somewhere on the chart.

II. Concerning the Report

Give your figures in tabular form, naming all of the sources.
Discuss the sources of your statistics, their authority, and their comprehensiveness.
Trace the trade cycles as shown on your chart, showing the relation between the line movements and periods of prosperity or depression.
Explain the reasons for the larger movements, paying particular attention to the maximal and minimal years. Show to what extent they may be caused by, or may be the cause of industrial fluctuations.
When several countries are concerned note the resemblances and differences in their respective movements, explaining any important dissimilarities.
Name all references employed in the preparation of the report. The references given by the instructor are only preliminary suggestions, and not meant to be sufficient for the completion of the report.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003, Box 1, Folder “Economics, 1905-1906”.

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

ECONOMICS 12b
Mid-year Examination, 1904-05

Omit one question

Compare as regards recent cycles of trade,—
1. the number and liabilities of failed firms.
2. banking and commercial failures.
3. railway and commercial failures.
To what extent have changes in the clearings of the New York banks registered changes in general business?
Explain Juglar’s theory as to the movements of bank loans and reserves, and state how far it is confirmed by American experience.
Explain what was done by the Bank of England to relieve apprehension in 1825, 1847, 1857, 1866, 1890.
Explain and discuss Rodbertus’ theory of crises.
Upon what occasions within the past thirty-five years and by what means, have the American Secretaries of the Treasury helped to relieve a stringency in the financial centres?
In what ways is business affected by the condition of the crops? Within what limitations? In the case of which crops is the connection closest?
What part does “credit” play in the explanation of crises,—
1. according to Laughlin,
2. according to Chevalier,
3. in your own opinion?
In what ways and to what extent are trade conditions apt to be affected,—
1. by the increasing gold supply,
2. by the trust movement,
3. by increasing armies and navies,
4. by the present agricultural situation?

Source: Harvard University Archives. Harvard University. Mid-year Examinations, 1852-1943. Box 7, Bound Volume: Examination Papers, Mid-Years 1905-06. Also a copy in Harvard University, Examination Papers 1873-1915. Box 8, Bound volume: Examination Papers, 1906-07; Papers Set for Final Examinations in History, Government, Economics,…,Music in Harvard College (June, 1906), p. 37.

Image Source: 1911 portrait of Abram Piatt Andrew, Jr. by Anders Born at Boston’s Isabella Stewart Gardner Museum. Wikimedia Commons.

Tags AndrewAP

Business Cycles Distribution Economic History Exam Questions History of Economics Industrial Organization International Economics Johns Hopkins Labor Money and Banking Public Finance Public Utilities Statistics Theory

Johns Hopkins. General Written Exam for Economics PhD. 1956

Post author By Irwin Collier
Post date 2023-10-06

One is struck by the relative weight of the history of economics in this four part (12 hours total) general examination for the PhD degree at Johns Hopkins in 1956. Also interesting to note just how many different areas are touched upon. Plenty of choice, but no place to hide.

________________________

Other General Exams from Johns Hopkins

________________________

GENERAL WRITTEN EXAMINATION FOR THE PH.D DEGREE
DEPARTMENT OF POLITICAL ECONOMY

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

PART I
June 4, 1956, 9-12 a.m.

Answer two questions, one from each group.

Group I.

Write an essay on the theory of capital. It should include a discussion of the place of capital theory in economic analysis: for what purposes, if any, we need such a theory, Do not omit theories or issues which were important in the history of doctrines, even if you should regard them as irrelevant for modern analysis.
Discuss and compare the capital theories of Böhm-Bawerk, Wicksell, and Hayek.
Write an essay on the theory of income distribution. Organize it carefully, as if it were designed for an article in the Encyclopedia of the Social Sciences. Include discussions of alternative theories such as imputation theories, residual theories, surplus value theories, etc.

Group II.

The following statements attempt to show that marginal productivity theory is inconsistent with factual observation. Accepting the stated facts as given, discuss whether they call for the rejection or major modification of the theory. If so, how? If not, why not?
1. “In the most important industries in the United States wage rates are set by collective bargaining and are largely determined by the bargaining strength of the parties. Marginal productivity of labor is neither calculated nor mentioned in the process.”
2. “In many industries competition among employers for workers is so limited that most firms are able to pay less than the marginal productivity of labor.”
3. “Workers in some trades — say, carpenters or bricklayers — work essentially the same way as their predecessors did fifty years ago; yet their real wages have increased greatly, probably not less than in occupations where productivity has improved considerably over the years.”
The determination of first-class and second-class passenger fares for transatlantic ocean transportation involves problems of (a) joint or related cost, (b) related demand, and (c) discriminatory pricing. Discuss first in what ways these three phenomena are involved here; then formulate a research project to obtain the factual information required for an evaluation of the cost relationships and demand relationships prevailing in the case of two-class passenger ships; and finally state the criteria for judging whether the actual rate differential implies conscious discrimination in favor of first-class passengers, conscious discrimination against first-class passengers, wrong calculation and faulty reasoning on the part of the shipping lines, or any other reason which you may propose.

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

PART II
June 4, 1956, 2-5 p.m.

Answer three questions, at least one from each group.

Group I.

There is a running debate on the question whether trade unions are labor monopolies. This debate obviously turns on the meaning of monopoly and on what effects union have had on their members’ wages, output, and conditions of work. Give both sides of the argument.
Write an essay on the demand for labor.
Write down everything you know about the incidence of unemployment among various classes of workers and about the fluctuations of unemployment over time. Discuss some of the problems of developing a workable concept of unemployment. Indicate whether the statistical behavior of unemployment throws any light on its causation.

Group II.

What is a “public utility”? According to accepted regulatory principles, how are the “proper” net earnings of a utility company determined? And, finally, what factors are considered in setting an “appropriate” rate structure?
What is the major purpose of the Sherman Anti-Trust Act of 1890? What are some of the more significant problems in determining what constitutes “restraint of trade”? What tests would you apply? Why?
Analyze the economic effects of a corporate income tax. Be as comprehensive as you can.
What are flexible agricultural price supports? Explain how they are determined and applied. Evaluate their use in the light of reasonable alternatives.

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

PART III
June 5, 1956, 9-12 a.m.

Answer three questions, one from each group.

Group I.

Describe briefly Schumpeter’s theory of economic development, and comment upon the possibility of testing it empirically.
Describe briefly Keynes’ general theory of employment, interest and money; state its assumptions, structure, and conclusions; and evaluate it critically in the light of more recent theoretical and empirical findings.

Group II.

What characteristics of economic cycles would you consider important in a statistical study of business cycles?
In the study of long-term trends, what criteria would you use in constructing index numbers of production?
What measures of economic growth of nations would you us? Consider carefully the various characteristics that you would deem indispensable in measurements of this sort.

Group III.

Give a brief definition, explanation and illustration for each of the following:
1. variance;
2. confidence interval;
3. coefficient of regression;
4. coefficient of correlation;
5. coefficient of determination;
6. regression line.

[Note: Indicate where you have confined yourself to simple, linear correlation.]

Write an essay on statistical inference by means of the following three techniques:
1. chi square;
2. analysis of variance;
3. multiple regression.

Indicate the types of problem in which they are used, and how each type of problem is handled.

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

PART IV
June 5, 1956, 2-5 p.m.

Answer four questions, one from each group.

Group I.

Political arithmetic is a term that is applied to certain writings that appeared from roughly 1675 to 1800. What gave rise to such writings? What were the contributions of the different members of the “group”? Why should Political Arithmetic be given a terminal date?
Discuss Quesnay’s Tableau Économique, Do you see in it anything of significance for the subsequent development of economic theory?
Present arguments for the contention that J. B. Say was far more than “a mere disciple of Adam Smith”.

Group II.

Discuss the relations between the English economic literature of the first half of the 19th century and the events, conditions, and general ideas of that time.
Select three episodes in American economic history, and use your knowledge of economic theory to explain them.

Group III.

Analyze the economic effects of a large Federal debt. Be as comprehensive as you can.
At one time or another each of the following has been proposed as the proper objective or goal of monetary policy: (1) The stabilization of the quantity of money; (2) The maintenance of a constant level of prices; (3) The maintenance of full employment.
Explain for each policy objective (a) what it means, that is, exactly what in “operational” terms might be maintained or stabilized; (b) how the objective could be achieved, that is, what techniques could be used to achieve it; and (a) the difficulties with or objections to the proposal.
Irving Fisher and others have proposed that all bank be required to hold 100% reserves against their deposits. This was designed to prevent bank failures and, more important, to eliminate the perverse tendency of money to contract in recessions and expand in booms.
Explain whether the proposal would have the effects claimed for it, and if so, why, and discuss what other effects it might have.

Group IV.

Discuss the “law of comparative advantage” in international trade.
Discuss “currency convertibility”.
Discuss the “transfer problem”.
Discuss the “optimum tariff”.
Discuss the “foreign-trade multiplier”.
Discuss alternative concepts of the “terms of trade”.
Discuss the “effects of devaluation upon the balance of trade”.

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

Source: Johns Hopkins University. Eisenhower Library. Ferdinand Hamburger, Jr. Archives. Department of Political Economy Series 5/6. Box No. 6/1. Folder: “Comprehensive Exams for Ph.D. in Political Economy, 1947-1965”.

Image Source: Fritz Machlup in an economics seminar. Evsey Domar visible sitting third from the speaker on his right hand side. Johns Hopkins University Yearbook, Hullabaloo 1956, p. 15.

Business Cycles Exam Questions Harvard

Harvard. Exam and enrollment for History and Theory of Commercial Crises. Andrew, 1902-1903

Post author By Irwin Collier
Post date 2023-02-26

Before there were courses on business cycles, courses at Harvard dealt with “commercial crises”. Abram Piatt Andrew, Jr. was the young man for the job in 1902-03. His Harvard Ph.D. dissertation’s title was “The ways and means of making payments” (1900) and together with Oliver Mitchell Wentworth Sprague he was an essential member of the post-Dunbar staff to cover the field of money and banking (and monetary macroeconomics).

Oops I did it ago. Almost all of this post had been shared in a collection of all of Andrew’s exams for commercial crises (1903-1908). The colorized and retouched photo from 1909 is new to this post.

______________________

Biography

ABRAM PIATT ANDREW, Jr., was born in La Porte, La Porte County, Ind., February 12, 1873; attended the public schools and the Lawrenceville (N. J.) School; was graduated from Princeton College in 1893; member of the Harvard Graduate School of Arts and Sciences 1893-98; pursued postgraduate studies in the Universities of Halle, Berlin, and Paris; moved to Gloucester, Mass,, and was instructor and assistant professor of economics in Harvard University 1900-1909; expert assistant and editor of publications of the National Monetary Commission 1908-11; Director of the Mint 1909 and 1910; Assistant Secretary of the Treasury 1910-12; served in France continuously for 4-1/2 years, during the World War, first with the French and later with the United States Army; commissioned major, United States National Army, in September 1917 and promoted to lieutenant colonel September 1918; awarded the Croix de Guerre and the Legion of Honor medal by the Republic of France in 1917 and the distinguished service medal by the United States Government in 1918; elected as a Republican to the Sixty-seventh Congress to fill the vacancy caused by the resignation of Willfred W. Lufkin; reelected to the Sixty-eighth and to the six succeeding Congresses, and served from September 27, 1921, until his death; delegate to the Republican National Conventions at Cleveland in 1924 and at Kansas City in 1928; member of the board of trustees of Princeton University 1932-36; died in Gloucester, Mass., June 3, 1936; remains were cremated and the ashes scattered from an airplane flying over his estate at Eastern Point, Gloucester, Mass.

Source: Memorial Service Held in the House of Representatives of the United States, Together with Remarks Presented in Eulogy of Abram Piatt Andrew, Late a Representative from Massachusetts. Seventy-fifth Congress, First Session. Washington, D.C. GPO, 1938. Archived transcription at the American Field Service website.

______________________

Course Description

b² hf. History and Theory of Commercial Crises. Half-course (second half-year). Mon., Wed., and (at the pleasure of the instructor) Fri., at 9. Dr. Andrew.

Course 12b will be devoted to the study of the more important crises of the past two hundred years. The phenomena of these crises will be described, and the record of events before and after will be examined with the object of disentangling their contributory causes and their consequences. The influence upon commercial fluctuations of the present organization of industry, of government finance, of foreign trade, of the money supply, of speculation, of banking methods, and of other credit institutions will be considered, as well as questions with regard to periodicity, over-production and over-investment. In connection with these subjects attention will be given to the methods actually employed in dealing with crises, and to proposed reforms designed to prevent or relieve them.

Subjects will be assigned for special reports, and these reports will be presented for discussion in class.

Course 12b is open to students who have passed satisfactorily in Course 1.

Source: Harvard University. Faculty of Arts and Sciences, Division of History and Political Science [Comprising the Departments of History and Government and Economics], 1902-03. Published in The University Publications, New Series, no. 55. June 14, 1902.

______________________

Course Enrollment, 1902-1903

Economics 12b. ²hf. Dr. Andrew. — History and Theory of Commercial Crises.

Total 37: 2 Gr., 9 Se., 19 Ju., 5 So.,2 Others.

Source: Harvard University. Annual Report of the President of Harvard College, 1902-03, p. 68.

______________________

ECONOMICS 12b
Final Examination, 1903

Omit one question.

“The crisis is practically of nineteenth century origin, and it is an acute malady to which business appears to be increasing subject.”
Give your opinion of these statements.
In what respects was the English crisis of 1866 peculiar?
“Commercial crises of the earlier type now belong only to history in England.”
Discuss this statement and explain the situation to which it refers.
Compare the American crises of 1884 and 1893 as regards antecedent conditions, course of events and consequences.
Describe in their mutual connections the fluctuations in exports and imports of commodities, in gold shipments, and in prices which occur in a normal trade cycle.
Discuss DeLaveleye’s theory of crises.
(a) How far did Jevons succeed in proving a relation between crises and agricultural conditions?
(b) To what extent can a connection be traced in the United States between trade cycles and crop conditions?
(c) In the case of which crop is the connection closest?
Explain and discuss Professor Laughlin’s theory as to the relations between “normal” and “abnormal”credit and price movements.
Explain and discuss Rodbertus’ theory of crises.
Explain and discuss Professor Carver’s theory of industrial depressions.

Source: Harvard University Archives. Examination Papers 1873-1915. Box 6. Papers Set for Final Examinations in History, Government, Economics, History of Religions, Philosophy, Education, Fine Arts, Architecture, Landscape Architecture, Music in Harvard College, June 1903 (in the bound volume Examination Papers 1902-1903).

Image Source: Picture of Abram Piatt Andrew from ca. 1909 used in a magazine article on his appointment to the directorship of the U. S. Mint. Hoover Institution Archives. A. Piatt Andrew Papers, Box 51. Retouched and colorized by Economics in the Rear-View Mirror.

Tags Andrew

Decatur Herald (Decatur, Illinois) 7 July 1929, p. 44

Mitchell One of First To Prove Business Cycle

Studied In Germany

NBER Memorial Volume for Wesley Clair Mitchell

Backstory:

Memorial Address by John Maurice Clark.

Typed copy of Wesley Clair Mitchell’s Response to Questions posed him by John Maurice Clark

Course Material from a Few Other Years

Course Announcement

Course Enrollment

First Term Reading List [Note: First term reading list is identical to that for 1937-38]

ECONOMICS 41 Readings: First Term

Reading Period January 5-18, 1939

Reading Period May 8-31, 1939

1938-39 HARVARD UNIVERSITY ECONOMICS 41 Money and Banking [Mid-Year Examination]

1938-39 HARVARD UNIVERSITY ECONOMICS 41 [Year-end Examination]

Course Material from the Other Years

Suggested Topics for Theses in Economics 41 1938-39

SUGGESTED TOPICS AND BIBLIOGRAPHY FOR COURSE THESES IN ECONOMICS 41

Decatur Herald (Decatur, Illinois)
7 July 1929, p. 44

NBER Memorial Volume
for Wesley Clair Mitchell

Memorial Address
by John Maurice Clark.

Typed copy of Wesley Clair Mitchell’s Response to Questions
posed him by John Maurice Clark

First Term Reading List
[Note: First term reading list is identical to that for 1937-38]

ECONOMICS 41
Readings: First Term

Reading Period
January 5-18, 1939

Reading Period
May 8-31, 1939

1938-39
HARVARD UNIVERSITY
ECONOMICS 41
Money and Banking
[Mid-Year Examination]

1938-39
HARVARD UNIVERSITY
ECONOMICS 41
[Year-end Examination]

Suggested Topics for Theses
in Economics 41
1938-39

SUGGESTED TOPICS AND BIBLIOGRAPHY
FOR COURSE THESES
IN ECONOMICS 41