Harvard. Mid-year and Final Exams for all three courses in Political Economy. Laughlin and Dunbar, 1879-80

 

All you could learn in political economy at Harvard in 1880 was packed into four semesters (two full courses). The core textbook was John Stuart Mill’s Principles of Economics. This post provides enrollment data together with the mid-year and course final examinations for Political Economy 1, 2, and 3. What makes this post particularly interesting is that the relevant sections or pages of Mill’s Principles are cited along with the examination questions. Economics in the Rear-view Mirror has added links to those items below.

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Actually only two distinct political economy courses offered in 1879-80

From the following note in the annual Harvard course catalogue we see that Political Economy 1 only offered a “lite” version of Political Economy 2. “Courses 1 and 2 cannot be taken together, nor can either be taken by any student who has taken the other”; “Course 3 is open to those only who have passed satisfactorily in Course 2.” The Harvard University Catalogue (1879-1880), p. 84.

An important guest lecturer at Harvard in 1879-80:

Besides prescribed and elective courses for credit, Harvard offered opportunities for “voluntary instruction”:  In 1879-80 Professor Simon Newcomb gave three public lectures on Political Economy.

Source: The Harvard University Catalogue (1879-1880), p. 90.

The John Stuart Mill textbook of Harvard choice

Most likely edition of John Stuart Mill’s Principles of Political Economy used at Harvard was a New York reprint of the London 5th edition. It corresponds to the pages given for the mid-year exam in Political Economy 1.

“From the fifth London edition” 2v. New York: D. Appleton, 1868.

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Political Economy 1

Enrollments and Text
Political Economy 1
1879-80

Political Economy 1. Dr. Laughlin and Prof. Dunbar. (partial Course.) — Selections from Mill’s Principles of Political Economy. — 1 Section; 2 Exercises per week for Students; 2 Exercises per week for Instructors.

Total 21: 7 Seniors, 9 Juniors, 4 Sophomores, 1 Law.

Source: Annual Report of the President of Harvard College, 1879-80, page 56.

 

POLITICAL ECONOMY 1.
Mid-Year Examination
1879-80

1. Comment on the following: “The cry was constantly — I know it myself from my intimate acquaintance with the large manufacturers and the small manufacturers too — that every one of them needed more currency than they had. They had capital, but could not get that which enabled them to pay off their hands…The manufacturers need a currency which will enable them to pay their weekly and daily debts.” — Cong. Record, April 7, 1874.
2. State some of the objections made to Malthus’ Law of Population. (I. 439-40)
3. Give the law of value regulating manufactured products. (I. 560) How far are such products affected by the Law of Diminishing Returns? (I. 238)
4. State the argument for or against the common saying “wages are high when trade is good.” (I. 421)
5. In what way can an increase of Population affect the Cost of Labor to the Capitalist?
6. Define clearly Value, Price, Real Wages, and Cost of Production.
7. Describe the offices which are performed by Money. (B. III., ch. vii.)
8. What is to be said to the following: “Some political economists have objected altogether to the statement that the value of money depends on its quantity combined with the rapidity of circulation; which, they think, is assuming a law for money that does not exist for any other commodity.” (II. p. 43)
9. What effect had the discovery of gold in this century upon the coinage of the United States?
10. What circumstances led to the establishment of the Bank of Amsterdam and of the Bank of England respectively?
11. What changes would be made in the subjoined accounts by,
    1. the deposit of £1,200,000;
    2. the sale of £2,000,000 of government security;
    3. new loans amounting to £3,000,000;
    4. repayment of £750,000 of loans.
12. If the Bank of England announces an increase of its rate of discount, what is to be inferred as to the cause of this step and its probable effect?

November 12, 1857.

Issue Department.
Notes Issued	£21.1	Government Securities	£14.5
		Coin and Bullion	£6.6
	£21.1		£21.1

 

Banking Department
Capital	£14.5	Government Securities	£9.4
Rest	£3.4	Other Securities	£26.1
Public Deposits	£5.3	Notes Coins	£1.4
Other	£12.9
7-day Bills	£0.8
	£36.9		£36.9

 

Source: Harvard University Archives. Harvard University. Examination Papers, 1873-1915. Box 2. Bound Volume Examination Papers, 1880-81. Philosophy, Political Economy, History, Fine Arts, and Music. Mid-Year Examinations, 1879-80, pp. 11-12.

POLITICAL ECONOMY 1.
Year-End Examination
1879-80

[Let the answers be given in their proper order]

1. “If there are human beings capable of work, and food to feed them, they may always be employed in producing something.” (Book I., ch. v., §3.)
2. When the growth of population outstrips the progress of improvements, what are the means of relief for the laborer? (Book I., ch. xiii., §3.)
3. What is the reason why land-owners can demand rent? (Book II., ch. xvi., §1.)
4. State the law of the value of money which governs general prices. What change is to be made in the statement, if credit is to be taken into consideration? (Book III., ch. vii., §§3, 4.)
5. On what does the desire to use credit depend? What connection exists between the amount of notes and coin in circulation and the use of credit? (Book III., ch. xii., §8.)
6. In what consists the benefit of international exchange? (Book III., ch. xvii., §3.) State the Law of International values. (Book III., ch. xviii., §4.)
7. What is the effect of a depreciated currency on (1) foreign trade, and (2) the exchanges? (Book III., ch. xxii., §3.)
8. Why should a tax on profits, if no improvements follow, fall on the laborer and capitalist? (Book V., ch. iii., §3.)
9. What effect is produced on prices, profit, and rent by the removal of a tithe? (Book V., ch. iv., §4.)
10. On whom does a tax on imports generally fall? (Book V., ch. iv., §6.)
11. Give a history of the circumstances under which the first Legal Tender Act was passed. When were the other acts passed?
12. Describe the following: (1) national bank-note; (2) five-twenty; (3) seven-thirty; (4) compound interest note; (5) certificate of indebtedness; (6) subsidiary silver coinage; (7) national bank reserve; (8) Resumption Act (briefly).

 

Harvard University Archives. Harvard University. Examination Papers, 1873-1915. Box 2. Bound Volume Examination Papers, 1880-81. Philosophy, Political Economy, History, Fine Arts, and Music. Annual Examinations, 1879-80, p. 12.

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Political Economy 2
1879-80

Enrollments and Text
Political Economy 2
1879-80

Political Economy 2. Prof. Dunbar. Mill’s Principles of Political Economy. — Financial Legislation of the United States. — Lectures. — 2 Sections; 3 Exercises per week for Students; 6 Exercises per week for Instructors.

Total 108: 10 Seniors, 83 Juniors, 13 Sophomores, 2 Unmatriculated.

Source: Annual Report of the President of Harvard College, 1879-80, page 56.

 

POLITICAL ECONOMY 2.
Mid-Year Examination
1879-80

1. State once more and with care the reason for the following proposition: —
   “There is a distinction, more important to the wealth of a community than even that between productive and unproductive labor; — the distinction, namely, between labor for the supply of productive, and for the supply of unproductive, consumption.”
2. What is the argument for Dr. Chalmers’s opinion that funds required for public unproductive expenditures should be raised by taxes and not by loans, and what cases are to be excepted from his reasoning?
3. What conclusion as to the limit to the increase of production, does Mr. Mill deduce from his investigation of the laws of the increase of labor, capital and land?
4. Why are the wages of women generally lower than those of men?
5. Show carefully the distinction between wages, cost of labor and cost of production.
6. Define natural value and market value and show what determines them respectively, distinguishing between the three classes into which Mr. Mill divides commodities.
7. What effect may the great durability of gold and silver have upon the value of money at any given time?
8. What effect has a general rise of wages upon the values of commodities?
9. How is it shown that rent forms no part of the cost of production?
10. The silver dollar contains 412 ½ grains of standard silver, but a dollar of silver change contains only 384 grains. On what theory is this difference of weight made?
11. What difference has the Act of 1844, known as Peel’s act, made as to the convertibility of the notes of the Bank of England?
12. If a serious drain of money from England, e.g., to this country, takes place, what steps will the Bank of England take, and what effect is likely to be produced on its account?
    If more convenient, this may be illustrated by using the following account: —

Issue Department.
Notes Issued	£36.5	Government Securities	£15.0
		Coin and Bullion	£21.5
	£36.5		£36.5

 

Banking Department
Capital	£14.5	Government Securities	£16.0
Rest	£3.2	Other Securities	£22.0
Public Deposits	£7.6	Notes Coins	£8.0 £1.1
Other	£21.5
7-day Bills	£0.3
	£47.1		£47.1

 

Source: Harvard University Archives. Harvard University. Examination Papers, 1873-1915. Box 2. Bound Volume Examination Papers, 1880-81. Philosophy, Political Economy, History, Fine Arts, and Music. Mid-Year Examinations, 1879-80, pp. 12-13.

 

POLITICAL ECONOMY 2.
Year-end Examination
1879-80

[Let the answers stand in your book in their proper order
Take TEN QUESTIONS, including 6, 8, 11, 12 and 13.]

1. Why is it that “ceteris paribus, those trades are generally the worst paid, in which the wife and children of the artisan aid in the work?” (Book II., ch. xiv., §4.)
2. If the general rate of profit falls, how will the value of commodities made by hand be affected in comparison with those made by machinery? (Book III., ch. iv., §5.)
3. “Another of the fallacies from which the advocates of an inconvertible currency derive support, is the notion that an increase of the currency quickens industry.” (Book III., ch. xiii., §4.)
4. Why is it that in international trade “a thing may sometimes be sold cheapest, by being produced in some other place than that at which it can be produced with the smallest amount of labor and abstinence?” (Book III., ch. xvii. §1.)
5. What determines the values at which a country exchanges its produce with foreign countries? (Book III., ch. xviii., §8.)
6. Suppose that a country whose exports have hitherto balanced her imports, makes an improvement which cheapens one of her articles of export, e.g. cloth. Will money flow into or out of the country? Will foreign or domestic consumers of cloth obtain the greater advantage of its cheapness? Give the reasoning on which your answers depend. (Book III., Chap. xxi., §2.)
7. What effect does an annual payment of interest to foreign creditors have upon the imports and exports of a country? Will interest “payable in gold” necessarily cause gold to be sent out of the country? Why, or why not? (Book III., Chap. xxi., §4.)
8. How do taxes on agricultural produce, e.g. tithes, affect landlords, farmers, and consumers, respectively, —
   1. when first laid on?
   2. when of long standing? (Book V., ch. iv. §5.)
9. What are the arguments for and against an income tax? (Book V., ch. iii., §5.)
10. Discuss the reasons for and against maintaining a surplus revenue for the extinction of national debt. (Book V., ch. vii. §2.)
11. Explain the changes in the amount of greenbacks outstanding, beginning with February, 1868.
12. State briefly the history of our gold and silver coinage, as found in the coinage acts of 1792, 1834, 1853, 1873, and 1878.
    The silver dollar contains 371 ¼ grains of silver.
13. To what extent is the national banknote a legal tender? in what is it payable? what provision is made for its redemption? and what security is there for its ultimate payment?

 

Harvard University Archives. Harvard University. Examination Papers, 1873-1915. Box 2. Bound Volume Examination Papers, 1880-81. Philosophy, Political Economy, History, Fine Arts, and Music. Annual Examinations, 1879-80, pp. 13-14.

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Political Economy 3
1879-80

Enrollments and Texts
Political Economy 3
1879-80

Political Economy 3. Prof. Dunbar. Cairnes’s Leading Principles of Political Economy. — MacLeod’s Elements of Banking. — Bastiat’s Harmonies Économiques. — 1 Section; 3 Exercises per week for Students; 3 Exercises per week for Instructors.

Total 24: 24 Seniors.

Source: Annual Report of the President of Harvard College, 1879-80, page 56.

 

POLITICAL ECONOMY 3.
Mid-Year Examination
1879-80

1. 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.]
2. In the case of accessory products, as, e.g. wool and mutton, what determines their normal values respectively, and what determines the course of their respective values as time goes on?
3. In his enumeration of the causes which determine the Wages Fund, Mr. Cairnes finds himself obliged to include the rate of wages. How does he avoid the charge of reasoning in a circle?
4. Comment on the following: —
   “The advocates of the wages-fund theory assume, first, that the capital of a country is a fixed quantity, and that the capital employed in industry is a fixed proportion of this quantity; and, secondly, that wages are paid out of that proportion of capital which is set apart for industry. Both of these propositions, in my opinion, are erroneous.
   “With regard to the first…there is no fact in Economic Science so well established as this, that capital follows profits….Capital is always forthcoming wherever there are prospects of large profits….The capital of a country, therefore, is not a fixed quantity, for if its credit is good, and sufficient inducements are offered in the shape of interest, it can readily borrow whatever it wants. For the same reason the capital employed in industry Is not a fixed quantity, and varies, not in proportion to the gross amount in the country, but in proportion to the profitableness of the industry of that country.
   “With regard to the second proposition…This is true to a limited extent only. No doubt a certain amount of capital is required for the payment of wages, just as a certain amount of capital is necessary for the purchase of raw material. There is this essential difference between the two cases, however, that while raw material is paid for (in cash or bills) before being used, wages are not paid till they have been earned….The employé, in fact, stands to his employer in the relation of a capitalist who advances him the use of his services, which services are ultimately paid for, not out of a wages-fund, but out of the produce of the services themselves.” (Outlines of an Industrial Science: by David Syme. p. 138.)
5. Give a careful but briefly stated outline (as if written for a rather elaborate Table of Contents) of Mr. Cairnes’s reasoning as to the relations existing between the demand for commodities and the wages fund, and between prices and money-wages.
6. What is meant by the “comparative costs of production,” on which international values are said to depend; and how is that dependence to be reconciled with the fact that any given sale of goods is found to be an independent transaction, determined by the price of the commodity.
7. What reasoning led Mr. Cairnes in 1873 to look for a fall of prices in this country, and for possible commercial crises?
8. What is Mr. Cairnes’s reason for believing that, in the United States, protection is not needed to secure diversity of industries?
9. If the common saying that “the value of gold is the same all the world over” has no foundation, how does a supply of new gold distribute itself over all countries and over all commodities in each country.
10. Stafford; Colbert; Sir J. Stewart; Quesnay.

 

Source: Harvard University Archives. Harvard University. Examination Papers, 1873-1915. Box 2. Bound Volume Examination Papers, 1880-81. Philosophy, Political Economy, History, Fine Arts, and Music. Mid-Year Examinations, 1879-80, pp. 13-14.

 

POLITICAL ECONOMY 3.
Year-End Examination
1879-80

1. Professor Cairnes says that “the notion which prevails both here and in the United States, that the high rate of general wages obtaining in each country is a hindrance to the extension of its foreign trade, must be pronounced to be absolutely without foundation.”
   By what reasoning this this conclusion supported?
2. How much truth is there in the maxim that “the value of gold is and must be the same all the world over”?
3. A few years ago an American writer said, —
   “We will be able to resume specie payments when we cease to rank among the debtor nations, when our national debt is owed to our own people, and when our industry is adequate to the supply of the nation’s need of manufactured goods.”
   With what degree of justice can this be treated as a prediction verified by the events?
4. Sherman says, —
   “During the last four years the value of our exports of merchandise has exceeded the value of our imports of merchandise $753,271,475. The excess of exports has heretofore been mainly met by the remittance to this country of American securities, but the time appears to have come when the balance of trade in our favor is to be adjusted by means of the precious metals.” — (Finance Report for 1879, p. xxxi.)
5. It is becoming a serious problem what (English) agriculturists are to do. They will not get rents much lowered in a hurry, for land still commands a high value in the market, and is difficult to be got at all except under special circumstances. Large proprietors would rather cultivate their own land at a loss than submit to a reduction of rent telling on its value.” — (London Times, May, 1880.)
6. Criticising Professor Cairnes’s reply to M. Alby, Sir Anthony Musgrave remarks,—
   “It is precisely because in no country are all industries equally favored by nature that Mr. Cairnes’s objection fails…. It is exactly because the favored industry in any nation requires no assistance, that it can assist the industries not so fortunate….Suppose that the high price secured by protection is rendered necessary by the onerous conditions under which native industry is tempted to work; suppose that Frenchmen, as Mr. Cairnes says are encouraged to produce iron from ores of inferior quality by the high price secured to them — what has happened? Useful iron has been extracted from ores which would have otherwise have been wasted; employment has been afforded to many who might otherwise have been idle for want of occupation; people have been fed who would otherwise have starved and as a set-off to this, some others have been obliged to smoke fewer cigars and drink less wine than they would have had money to purchase, if they had not been compelled to spend it in iron. In the absence of protection “they,” we are told,” would obtain their iron on more favorable terms at a smaller sacrifice of labor and abstinence by exchanging for it their wines and silks with England.”…Whose labor? and abstinence from what? Unfortunately the persons who have the wine and silk are not those who want the iron. The truth is, we do not want to save labor — we want to find wholesome and remunerative employment for paupers. And if the sacrifice of “abstinence” only means, as I believe it does, that riches will not accumulate so fast in the hands of capitalists — that the employers of labor will have to forego some luxuries that they may give higher wages to the laborers, and that the comforts of life may be thus more equally distributed — I cannot see much objection to this.” — (Contemporary Review, January, 1877.)
7. “Ever half year we see summaries in the newspapers shewing that the Joint Stock Banks have in the aggregate perhaps $200,000,000 of deposits, and it is supposed that they have that quantity of money to trade with. But it is a complete and entire delusion.”
8. How does discounting differ from the cash credit system, long practiced by the Scotch banks?
9. State and explain Bastiat’s law of value.
10. What is the reasoning in support of the following? —
    “A mesure que les capitaux s’accroissent, la part absolue des capitalistes dans les produits totaux augmente et leur part relative Au contraire, les travailleurs voient augmenter leur part dans les deux sens.”
11. What is Bastiat’s theory of the value of land, and how is it reconciled with the value attaching to natural fertility?

 

Source: Harvard University Archives. Harvard University. Examination Papers, 1873-1915. Box 2. Bound Volume Examination Papers, 1880-81. Philosophy, Political Economy, History, Fine Arts, and Music. Annual Examinations, 1879-80, pp. 14-15.

Image Source: Charles F. Dunbar photographed by William Notman. Special Collections, Fine Arts Library, Harvard College Library.