Like the previous post, this one plugs a gap (1878-79) in the time series of Harvard political economy exams from the 19th century. Charles Dunbar was still at the top of his game and the young Dr. James Laurence Laughlin enters the picture.
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Political Economy [first course].
Course Enrollment
[Philosophy] 6. Political Economy. — J. S. Mill’s Political Economy. — Financial Legislation of the United States. Three times a week. Prof. [Charles Franklin] Dunbar and Dr. [James Laurence] Laughlin.
Total 121: 1 Graduate, 45 Seniors, 71 Juniors, 1 Sophomore, 3 Others.
Source: Harvard University. Report of the President of Harvard College, 1878-79, p. 60.
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PHILOSOPHY 6.
Mid-year Examination, 1878-79
(Do not change the order of the questions.)
- State the argument for raising the whole of the supplies of state by taxation within the year. Illustrate by the experience d England from 1793 to 1817, and of the United States in the recent war.
- Examine the assertion that, if the rich increase their unproductive expenditure, the now unemployed working classes will be benefited.
- If all land were of equal fertility, and all required for cultivation, would it pay Rent? Give the reasons for your answer.
- By what reasoning, irrespective of value or price, does Mr. Mill arrive at the law of Rent?
- State the general laws of value, and show what modifications are necessary for articles produced in foreign countries. Complete the whole theory by any peculiar cases of value.
- (1) Show that capitalists cannot secure themselves against a general increased cost of labor by raising the prices of their goods. (2) On what does Cost of Labor depend?
- Illustrate Gresham’s Law by the causes which led to the Suffolk Bank System, and the Coinage Act of the United States in 1834.
- Point out the fallacy in the theory that an increase of the currency is desirable because it quickens industry.
- When our imports regularly exceed our exports, what will be the rate charged in New York for sight bills on London? What is the par of exchange between Paris and London?
- What is to be said as to the doctrine that the advantage to a country from foreign trade is found in the surplus of exports over imports?
- Explain the system of the Bank of Amsterdam, and the reasons for establishing it.
- Arrange the following resources and liabilities of the Bank of England in the proper form, separating the Issue and the Banking Departments:
| Notes Issued | £41.5 | Government Securities | £14.2 |
| Other Deposits | 27.9 | Reserve | 9.4 |
| Other Securities (Loans) | 27.9 | Public Deposits | 5.6 |
| Coin and Bullion | 26.5 | Rest | 3.2 |
| Government Debt., &c. | 15.0 | Seven-day Bills | 0.3 |
| Capital | 14.5 |
- Having arranged the account, show what changes would be made in it, if the Bank increased its loans by 3 millions and sold 1 million of government securities, and depositors at the same time withdrew 2 millions to be sent abroad.
Source: Harvard University Archives. Examination papers, 1873-1915. Box 2, Bound Volume 1878-79, Papers Set for Mid-Year Examinations in Rhetoric, Logic, Philosophy, Political Economy, History, Music, Fine Arts in Harvard College, February 1879, pp. 8-9.
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PHILOSOPHY 6.
Year-End Examination, 1878-79
- What is the cause of the existence of profit? And what, according to Mr. Mill, are the circumstances which determine the respective shares of the laborer and the capitalist?
- Explain the statement that “high general profits cannot, any more than high general wages, be a cause of high values. . .. In so far as profits enter into the cost of production of all things, they cannot affect the value of any.”
- On what does the minimum rate of profit depend? What counterforces act against the downward tendency of profits?
- State the theory of the value of money (i.e. “metallic money”), and clear up any apparent inconsistencies between the following statements: (1) The value of money depends on the cost of production at the worst mines; (2) The value of money varies inversely as its quantity multiplied by its rapidity of circulation; (3) The countries whose products are most in demand abroad and contain the greatest value in the smallest bulk, which are nearest the mines and have the least demand for foreign productions, are those in which money will be of lowest value.
- What is the error in the common notion “that a paper currency cannot be issued in excess so long as every note represents property, or has a foundation of actual property to rest on?”
- What are the conditions under which one country can permanently undersell another in a foreign market?
- On whom does a tax on imports, if not prohibitory, fall?
- Discuss the following:—
“A man with $100,000 in United States bonds comes to Boston, hires a house …; thus he lives in luxury… I am in favor of taxing idle investments such as this, and allowing manufacturing investments to go untaxed.” - If depositors in the Bank of England withdraw £3,000,000 in specie and send it abroad, how does this withdrawal of gold from the vaults of the Bank affect the currency in actual circulation?
- Describe the plan on which a national bank of the United States is organized, the security for its notes, the provision for their redemption and the extent to which the law makes them receivable.
- When were the legal-tender, compound interest notes issued, and what was their peculiar characteristic as a currency? How did their action as currency differ from that of the other issue of interest-bearing legal-tender notes?
- Describe the Resumption Act of 1875. What circumstances have promoted its success?
Source: Harvard University Archives. Examination papers, 1873-1915. Box 2, Bound Volume 1878-79, Papers Set for Annual Examinations in Rhetoric, Logic, Philosophy, Political Economy, History, Music, Fine Arts in Harvard College, May 28 to June 4, 1879, pp. 13-14.
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Advanced Political Economy.
Course Enrollment
[Philosophy] 7. Advanced Political Economy. Cairnes’s Leading Principles of Political Economy. — McKean’s Condensation of Carey’s Social Science. — Lectures. Three times a week. Prof. Dunbar.
Total 36: 2 Graduates, 31 Seniors, 3 Juniors.
Source: Harvard University. Report of the President of Harvard College, 1878-79, p. 60.
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PHILOSOPHY 7.
Mid-year Examination, 1878-79
(Write your answers in the same order as the questions.)
- Give a careful and logical summary of the laws determining the values of all commodities, monopolized or free, domestic or foreign, using the corrected definition of Cost of Production. [Forty minutes]
- As a new country fills up, what changes may be expected in the normal prices of meat, timber, grain and wool?
- Why is it unlikely that any formula will be devised, embracing in one statement the law of the value of commodities and the law of the value of labor, i.e. the law of wages?
- Give a summary of Mr. Cairnes’s restatement of the wages-fund theory.
- Analyze this statement:
“An article which a farm laborer has produced in a day does not exchange for one which a watchmaker has spent an equal time in producing, because the latter is a more skilful operative.” - Explain the statement that “the high scale of industrial remuneration in America, instead of being evidence of a high cost of production in that country, is distinctly evidence of a low cost of production.”
- What effects upon foreign trade have general changes in the rates of wages, and what have partial changes? Give the reasons.
- What effect has the existence of a large debt payable to foreigners, upon the ability of a country to keep up a metallic circulation?
- The Governor of M. is informed,
“That the longer continuance of the provisions of the treaty with Great Britain, permitting the free importation of fish from the Provinces, will be most disastrous to the fishing interest; and that the permanent maintenance of this policy will insure its complete destruction. This would involve the decay of our fishing ports and the loss of millions of capital, and drive from their occupation thousands of deserving citizens. … This class has been the nursery of the navy of the Union. It has manned our mercantile marine.”
Discuss the suggestion that for these reasons the provisions of the treaty referred to should be abrogated. - Give some account of the Economistes and of their doctrines.
Source: Harvard University Archives. Examination papers, 1873-1915. Box 2, Bound Volume 1878-79, Papers Set for Mid-Year Examinations in Rhetoric, Logic, Philosophy, Political Economy, History, Music, Fine Arts in Harvard College, February 1879, p. 10.
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PHILOSOPHY 7.
Year-end Examination, 1878-79
- What are Mr. Cairnes’s reasons for doubting whether any great improvement can be made in the condition of the laboring class, so long as they remain mere receivers of wages?
- How is the statement that “a rise or fall of wages in a country, so far forth as it is general, has no tendency to affect the course of foreign trade” to be reconciled with the fact, that in the last two or three years the United States have been able to export certain manufactured goods in increased quantities, in spite of competition?
- What is the explanation of the statement that “what a nation is interested in is, not in having its prices high or low, but in having its gold cheap”?
- How does Mr. Shadwell’s definition of value differ from that adopted by the school of Ricardo?
- Discuss the following extract:—
“As a cause must precede its effect, increase of population cannot be the cause of an increase of food, nor of its increased dearness, which is consequent on the resorting to poorer soils in order to raise a larger quantity. If, then, the cost of food has any tendency to increase as society advances, it must be because farmers are prompted by some motive or other to resort to poorer soils, while richer ones are to be had. But such a supposition is contrary to the principle that every one desires to obtain wealth by the least possible labor, and is therefore inadmissible. Poor land is taken into cultivation not because the population has increased, but because some discovery has been made which renders it possible to obtain as much profit as from the worst previously cultivated, and this discovery enables the quantity of food to be increased, and an increase of population is the effect and not the cause.” - Also the following :-
“Agricultural profits cannot fall unless recourse is had to poorer land, but such land will never be cultivate, since capitalists can never be willing to submit to a fall of profit; and the very meaning of the expression that some land is not worth cultivating, is, that it will not yield the ordinary profit to the farmer who should attempt to reclaim it. It appears, then, that the rate of profit is stationary in agriculture, and, consequently, in all other trades; and that whatever rate be established in an early stage of society, it must remain the same throughout its subsequent development.” - “Why then should we suppose that the supply of paper substitutes for coin (like the supply of corn) would not be best maintained by allowing bankers and their customers to bring them into circulation in whatever quantities, and at whatever times, they find to be mutually convenient?”
- In what forms was the French indemnity finally received by Germany (bills of exchange being a mere instrument of transfer)? How did the payment probably affect Austria and the United States?
- A considerable party in England now propose “Reciprocity,” — that is, the admission without duty of the goods of such countries only as in turn admit English goods without duty. What practical objections and what theoretical ones can be urged against this proposition?
- “No act of Parliament,” it is said, “or convention of nations can prevent (between gold and silver) changes in value resulting from variations in the conditions of production, or of the action of demand and supply.”
To this M. Cerunschi replies, — “You confound money with merchandise. To speak of merchandise is to speak of competition, supply and demand, purchase and sale, price. To speak of money is nothing of the kind.
“Whether he produces little or much at a profit or at a loss, no miner can ever sell his metal money either dearer or cheaper than other miners, for the simple reason that the metal money is not sold or bought; it is itself its price…
“When the monetary law is bi-metallic, therefore, no competition [is] possible between the producer of gold and the producer of silver, no purchase and sale, no discount, no price between one metal and the other. Without their being offered, without their being demanded, the circulation absorbs them both at the legal par, and cannot refuse them. When the monetary law is everywhere bi-metallic, neither gold nor silver, coined or uncoined, is merchandise. That is the secret.”
Source: Harvard University Archives. Examination papers, 1873-1915. Box 2, Bound Volume 1878-79, Papers Set for Annual Examinations in Rhetoric, Logic, Philosophy, Political Economy, History, Music, Fine Arts in Harvard College, May 28 to June 4, 1879, pp. 14-15.
Image Source: Harvard Library, Hollis Images. Charles F. Dunbar (left) and James Laurence Laughlin (right). Colorized by Economics in the Rear-view Mirror.