Tag: Taussig

Harvard. History of Economic Theory. Final exam questions, Taussig, 1887-90

Post author By Irwin Collier
Post date 2017-11-30
3 Comments on Harvard. History of Economic Theory. Final exam questions, Taussig, 1887-90

Examination questions spanning just over a half-century can be found in Frank Taussig’s personal scrapbook of cut-and-pasted semester examinations for his entire Harvard career. Until Schumpeter took over the core economic theory course from Taussig in 1935, Taussig’s course covering economic theory and its history was a part of every properly educated Harvard economist’s basic training. Today I begin with a systematic, regular transcription of Taussig’s examinations for this course that began as Political Economy 2, but that is best known by its later course number, Economics 11.

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Course Description and Enrollment
1886-87

Instructor	Course number, name, and content	Hours per week	Enrollment by class	Total enroll-ment
Prof. Taussig	*2. Economic Theory; its history and present stage; —Lectures, preparation of papers, and discussion of selections from leading writers.	3	2 Graduates, 33 Seniors, 14 Juniors	49

Source: Harvard University, Annual Reports of the President and Treasurer of Harvard College, 1886-87, p. 58.

1886-87.
POLITICAL ECONOMY 2.
[Mid-Year Examination. 1887.]

It has been said that the Mercantile writers built up the first system of political economy; again, that a system is first found in the writings of the Physiocrats; and again, that Ricardo created political economy as a science. What should you say as to these statements?
Say something as to the connection that may be traced between the personal history of Adam Smith and of Ricardo, and the characteristics of their writings.
Sketch the history of the doctrines as to the productiveness of different kinds of labor from the time of the Mercantile writers to that of J. S. Mill.
Comment on the following:—

“It remains a matter of some difficulty to discover what solid contribution Malthus has made to our knowledge, nor is it easy to ascertain precisely what practical precepts, not already familiar, he founded on his theoretic principles…. ‘Much,’ he thought, ‘remained to be done. The comparison between the increase of population and of food had not, perhaps, been stated with sufficient force and precision’ and ‘few inquiries had been made into the various modes by which the level’ between population and the means of subsistence ‘is effected.’ The first desideratum here mentioned — the want, namely, of an accurate statement of the relation between the population and the supply of food — Malthus doubtless supposed to have been supplied by the celebrated proposition that ‘population increases in a geometrical, food in an arithmetical, ratio.’ This proposition has been conclusively shown to be erroneous, there being no such difference of law between the increase of man and of the organic beings who form his food. When this formula is not used, other somewhat nebulous expressions are sometimes employed, as, for example, that ‘population has a tendency to increase faster than food’ a sentence in which both are treated as if they were spontaneous growths…. It must always have been perfectly well known that population will probably (though not necessarily) increase with every augmentation of the supply of subsistence, and may, in some instances, inconveniently press upon or even for a certain time exceed the number properly corresponding to that supply. Nor could it have ever been doubted that war, disease, poverty — the last two often the consequences of vice — are causes which keep population down. Again, it is surely plain enough that the apprehension by individuals of the evils of poverty, or a sense of duty to their possible offspring, may retard the increase of population, and has in all civilized communities operated to a certain extent in that way. It is only when such obvious truths are clothed in the technical terminology of ‘positive’ and ‘preventive’ checks that they appear novel and profound: and yet they appear to contain the whole message of Malthus to mankind.”
Whom do you judge to be the writer of this passage?

State carefully Cairnes’s theory of value, and show wherein it differs from Ricardo’s exposition of that subject.
Explain the conclusions which George draws as to wages from an analysis of the simplest stage of society, and those which Ricardo draws as to values from a similar analysis. State whether the reasoning in the two cases differs and if so, wherein; and give an opinion as to the soundness of the conclusions reached.
State carefully the wage-fund doctrine as expounded by Cairnes, and show wherein his exposition is an advance on the previous treatment of the subject.
In a collection of examination questions, the following was asked:—

“Cairnes argues that we cannot apply the law of supply and demand to labor, because the supply of labor is produced by biological forces and not as commodities are produced. — What is the fallacy of this argument?”

Comment on the question, and answer it; and refer briefly to the history of the line of argument that draws an analogy between the value of labor and of commodities.

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1886-87
POLITICAL ECONOMY 2.
[Final Examination, 1887.]

Comment, separately or in a connected essay, on the following extracts:—

(a) “The first of these theories is known as the wage-fund theory of the books on Political Economy. It represents the rate of wages as depending on the amount of capital which employers think proper to disburse as wages. The wages rate was regarded as the dividend, found by dividing the wages-fund by the number of labourers. But though this division doubtless takes place, there is nothing in the theory to determine either the whole amount which is to be divided, or the proportional share which any particular labourer may obtain. Nobody can possibly suppose that workmen in different branches of production, or in different ranks in the same branch, receive the same wages. Nor can anybody imagine that the capitalist distributes his capital simply because it is capital, irrespective of the produce which he expects from the labour bought.”
— W. S. Jevons.

(b) “Ricardo held that profits and wages are the leavings of each other. Later economists have generally rejected this doctrine; but even those of them who maintain that wages are paid out of capital, fall back on arguments which imply its truth. For instance, Cairnes, who earnestly maintained that capital is divided into wages, rent, material, and wage-fund, argued that trades-unions could not increase the rate of wages because, if they did so, they would reduce profits below the rate which would make investment worth while. On his own doctrine, increased wages could not trench on profits…. We shall see further on that wages and profits are not the leavings of each other, because they are not parts of the same whole.”

(c) “If we assume that upon a cultivated island are tools and carts and animals for draught, and other forms of capital, adequate for a thousand laborers, the production will vary within a very wide range according to the industrial quality of the laborers using that capital. If we suppose them to be East Indians, we shall have a certain annual product; if we suppose Russian peasants to be substituted for East Indians, we shall have twice or three times that product; if we suppose Englishmen to be substituted for Russians, we shall have the product again multiplied two or three fold. By the wage-fund theory, the rate of wages would remain the same through these changes, inasmuch as the aggregate capital of the island would remain the same through these changes and the number of laborers in the market would be unchanged, the only difference being found in the substitution of more efficient for less efficient laborers. According to the view here advanced, on the contrary, the amount to be paid in wages should and would rise with the increased production due to the higher industrial quality of the laboring population.”

(d) “The capital of the employer is by no means the real source of the wages even of the workmen employed by him. It is only the immediate reservoir through which wages are paid out, until the purchasers of the commodities produced by that labor make good the advance and thereby encourage the undertaker to purchase additional labor.”—W. Roscher.

Whom do you judge to be the writers of the extracts (b) and (c)?

State carefully Walker’s theory of business profits. Give an opinion as to its value (1) in explaining differences between the returns of different managers, and (2) in eliminating such returns, like rent, from the problem of distribution.
Compare Carey and Bastiat, and say something as to the manner and extent of their influence on the course of economic speculation.
Explain wherein the attitude of Wagner to economic study differs from that of Mill and Cairnes.
“Mr. Cairnes asks, ‘how far should religious and moral considerations be admitted as coming within the province of political economy?’ His answer is that ‘they are to be taken account of precisely in so far as they are found to affect the conduct of men in the pursuit of wealth;’ and one needs only to allude to the influence of mediaeval religion both on the forms and the distribution of the wealth of the community, the changes in both with the change in religion after the Reformation, in proof of the impotence of the a priori method in relation to this class of agencies. Yet a few pages after recognizing their title to investigation, Mr. Cairnes argues that induction, though indispensable in physical, is needless in economic science, on the ground that the economist starts with a knowledge of ultimate causes’ and ‘is already at the outset of his enterprise in the position which the physicist only attains after ages of laborious research.’ The followers of the deductian [sic] method are in fact on the horns of a dilemma. They must either follow Mr. Lowe’s narrow path, and reason strictly from the assumption that men are actuated by no motive save the desire of pecuniary gain, or they must contend that they have an intuitive knowledge of all the moral, religious, political, and other motives influencing human conduct, and of the changes they undergo in different countries and periods.”
Was Cairnes inconsistent in the manner here stated? Does his reasoning lead to the alleged dilemma?
Should you agree with the following:—

“If economic phenomena were the results of a single force or combination of forces, standing alone, then only would the assumption hold good that there is an identity of effects on the appearance of the same causes. But economic facts are so closely connected with the whole of life, the element of personal freedom comes in so constantly, that a causal connection like that of a law of nature cannot be shown. This is at bottom the sound point in the criticisms of Ricardo’s keen logic. Ricardo often begins with facts, carefully and nicely observed in real life, and makes them the first premises of his reasoning. Then he uses a method of reasoning which is common in philosophy, but inadmissible in political economy. By logical sequence of thought he leads the reader, who can see no flaw in the chain of conclusions, to a result which, notwithstanding the solidity of the premises and the steadfast reasoning, is yet by no means unquestionable. For in the end we are not concerned with the elaboration of a truthful train of thought, but with a truth of real life; hence the test of truth lies in the connection of cause and effect that exists in real life; and as to that, with its manifold and varied possibilities, no human insight can make the true combinations in advance by abstract reasoning. There may be an artistic truth, which yet, when compared with reality, is not a truth. Even if one sees no inconsistency with the facts of experience up to the very last step in the reasoning, yet that reasoning gets its final stamp of truth only from experience. Our thoughts on the facts of the world are often true only so long as we shape them according to those facts that we know; a new experience comes in to better this approximate truth.”—Knies, Die Politische Oekonomie vom Historischen Standpunkte.

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Course Description and Enrollment
1887-88

Instructor	Course number, name, and content	Hours per week	Enrollment by class	Total enroll-ment
Prof. Taussig	*2. History of Economic Theory. — Distribution. — The Scope and Method of Political Economy. — Socialism. —Lectures, preparation of theses, and discussion of selections from leading writers.	3	4 Graduates, 14 Seniors, 8 Juniors, 1 Sophomore, 2 Others	29

Source: Harvard University, Annual Reports of the President and Treasurer of Harvard College, 1887-88, p. 62.

1887-88.
POLITICAL ECONOMY 2.
[Mid-Year Examination. 1888.]

Compare the treatment of the theory of money by Boisguillebert, Law, and Hume.
What was Adam Smith’s doctrine as to rent, and wherein does it differ from that of the Physiocrats, and from that of Ricardo?
Make a brief comparison between the general characteristics of the economic writings of Adam Smith and of J. S. Mill.
Explain how Malthus illustrated and applied his general principles in his discussion of the movement of population in (a) Sweden and Norway, (b) Switzerland, (c) France during the Revolutionary wars. [Take one of these three.)
“Mr. Malthus thinks that a low money price of corn would not be favourable to the lower classes of society, because the real exchangeable value of labour, that is, its power of commanding the necessaries, conveniencies, and luxuries of life, would not be augmented, but diminished, by a low money price. Some of his observations on this subject are certainly of great weight, but he does not sufficiently allow for the effect of a better distribution of the national capital on the situation of the lower classes. It would be beneficial to them, because the same capital would employ more hands; besides, the greater profits would lead to more accumulation; and thus a stimulus would be given to population by really high wages, which could not fail for a long time to ameliorate the condition of the laboring classes.”— Ricardo, Essay on the Influence of a Low Price of Corn.
Explain (a) whether this states fairly Malthus’s opinion as to the effect of cheap food; (b) what Ricardo meant by “a better distribution of the national capital”; (c) what light the concluding sentence throws on Ricardo’s view of the effect on wages and profits of cheap food.
“The notion that any portion of the wealth of the country should be ‘determined’ to the payment of wages seems to shock Mr. Longe’s sense of economic propriety; which is strange, seeing that his own doctrine — that it is ‘the demand for commodities which determines the quantity of wealth spent in the payment of wages’ — plainly involves this consequence. He puts the case of a capitalist who, taking advantage of the necessities of his workmen, effects a reduction of wages and succeeds in withdrawing so much, say £1000, from the Wages-Fund; and asks how is the sum thus withdrawn to be restored to the fund? On Mr. Longe’s principles the answer is simple,—‘by being spent in commodities’; for it may be assumed that the sum so withdrawn will, in any case, not be hoarded. * * * The answer, therefore, to the case put by Mr. Longe is easy on his own principles; and I am disposed to flatter myself that the reader who has gone with me in the foregoing discussion will not have much difficulty in replying to it on my own.”— Cairnes, Leading Principles.
What is the answer on Cairnes’s principles?
Would the explanation which the Wages-Fund theory gives of the causes regulating the rate of wages apply to a society in which a system of profit-sharing had been universally adopted?
Wherein does Ricardo’s treatment of the manner in which profits affect value differ from Cairnes’s treatment of the same subject?

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1887-88
POLITICAL ECONOMY 2.
[Final Examination. 1888.]

“Cairnes, who earnestly maintained that capital is divided into wages, raw material, and fixed capital, argued that trades-unions could not increase wages in the several trades, because, if they did so, they would reduce profits below the rate which would make investment worth while. On his own doctrine, increased wages could not trench on profits. He should have argued that wages, if increased by a trades-union, could only be increased at the expense of raw material and fixed capital, which would be far more difficult than to increase them at the expense of profits. Indeed, if the trades-union movement did not coincide with a new distribution of capital into its three parts (a new distribution which would produce a rise in wages), the trades-union could not possibly force an advance at the expense of raw materials or fixed capital.” — W. G. Sumner, Collected Essays.
Can you reconcile Cairnes’s reasoning on trades-unions with his doctrine as to the wages fund?
“The railroads of the United States receive annually two hundred and ten millions of dollars for transporting passengers. Those receipts came in day by day, yet the railroad company habitually pays its employees at the close of the week or at the close of the month. Here we have a very large class of services where the employer receives the price of his product before he pays for the labor concerned in its production. The railroads of the United States also receive annually for freights five hundred and fifty millions. The greater portion of this amount is collected before the track hands and the station hands have received the remuneration for their share of the service. . . . To descend to the other end of the scale of dignity, hotel keepers and, in less degrees, boarding-house keepers collect their bills before they pay their cooks, chambermaids, and scullions. Nearly all receipts of theatre, opera, and concert companies are obtained day by day, although their staffs and troupes are borne on monthly or weekly pay-rolls.” — F. A. Walker, in the Journal of Economics, April, 1888.
Are these facts inconsistent with the proposition that wages are paid out of capital?
What should you say to the doctrine that the real source of wages is in the incomes of the consumers of the articles made by the laborers?
It has been said that “Mr. Walker’s theory is, in reality, not a theory of manager’s earnings at all, but a theory of difference in manager’s earnings.” Do you think this is a sound criticism?
Explain what was Bastiat’s doctrine as to value; point out wherein it was like or unlike Carey’s doctrine on the same subject; and state briefly Cairnes’s criticism on Bastiat.
“There are two kinds of sociological inquiry. In the first kind, the question proposed is, what effect will follow from a given cause, a certain general condition of social circumstances being presupposed. As, for example, what would be the effect of abolishing or repealing corn laws in the present conditions of society or civilization in any European country, or under any other given supposition with regard to the circumstances of society in general; without reference to the changes which might take place, or which may be already in progress, in those circumstances. But there is also a second inquiry, namely, what are the laws which determine those general circumstances themselves. In this last the question is, not what will be the effect of a given cause in a certain state of society, but what are the causes which produce, and the phenomena which characterize, states of society generally.” — Mill’s Logic.
What reasons are there for saying that different methods should be applied to these two kinds of inquiry? and what are the differences in method?
Can the legislation of Germany on workmen’s insurance be said to be socialistic in a sense in which (a) the Christian socialist movement in England, and (b) the regulation or ownership by the state, are not socialistic?
Suppose production coöperation were universally adopted; wherein would the organization of society differ from that which socialism proposes?

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Course Description and Enrollment
1888-89

Instructor	Course number, name, and content	Hours per week	Enrollment by class	Total enrollment
Prof. Taussig	*2. History of Economic Theory. Examination of selections from leading writers.—Lectures and discussion: one extended thesis from each student.	3	13 Seniors, 9 Juniors, 2 Sophomores	24

Source: Harvard University, Annual Reports of the President and Treasurer of Harvard College, 1888-89, p. 72.

1888-89.
POLITICAL ECONOMY 2.
[Mid-Year Examination. 1889.]

Point out wherein the teachings of the mercantile writers on population and on the balance of trade were connected with the political and economic history of their time.
Under what conditions did Adam Smith believe that wages could long remain high? What reasoning led him to this conclusion? Do you think the reasoning sound?
Wherein did Adam Smith’s doctrines as to foreign trade differ from those of Hume and of the Physiocrats?
Ricardo’s chapter on value has been criticized on the following grounds: —

(1) Ricardo asserts, but in no way proves, that value depends on quantity of labor.
(2) He does not state whether he means labor expended on the production of goods, or labor needed for their reproduction.
(3) His principle holds good only of goods of which the production can be increased indefinitely, and as to which competition is free.
(4) The principle is at once modified by the statement that the general rate of profits affects values.

Discuss briefly each objection.

Malthus laid it down that (1) marriages and deaths bear a constant proportion in an old country; (2) with a rise in the standard of living, marriages become less in proportion to population; (3) births, like marriages, bear a constant proportion to deaths, in an old country.
What led Malthus to these conclusions? Does experience bear him out?
By what mode of proof did Malthus show that the wars of the French Revolution had not diminished the population of France? Point out wherein his discussion of this subject is characteristic of the Essay on Population.
Malthus, Ricardo, J. S. Mill, Cairnes, — note briefly how they are related in the history of economic theory.
What would be the movement of wages and prices in case of a general improvement in industrial processes?
What does Cairnes conclude as to the results which Trade Unions can permanently bring about (1) in England; (2) in the United States?

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1888-89.
POLITICAL ECONOMY 2.
[Final Examination. 1889.]

On what grounds can you reason that the stock of consumable commodities is likely to be sufficient, or more than sufficient, to last, at the present rate of consumption, till a new stock can be produced? What bearing has the answer on the wages-fund controversy?
Discuss President F. A Walker’s explanation of business profits in its bearing on the general theory of distribution.
By what reasoning does Cairnes reach the conclusion that, in the present state of society, “the rich will be growing richer, and the poor, at least relatively, poorer.”
Could Cairnes, consistently with his conclusions as to coöperation, oppose measures such as were urged by Lasalle?
Point out wherein Sidgwick’s exposition of the causes determining the rate of interest differs from Mill’s.
What was the attitude toward laissez-faire of Adam Smith? of Ricardo? of Cairnes?
What reasons are there why the term “socialist” should or should not be applied to (1) the Christian socialists; (2) advocates of German legislation on workmen’s insurance; (3) followers of Mr. Henry George.
Point out wherein Marx’s discussion of wages is similar to that of Rodbertus.
“From the history of the double standard we reach Gresham’s law, that where two currencies exist side by side the baser will drive the good out; from the prosperity of England we can reason to the principle of free trade, at least for industrially developed nations.” — R. M. Smith. What would Cairnes say to this mode of investigation for the specific questions mentioned?
Comment on the following extracts, separately or in connection with each other: —

“The value of most of the theorems of the classic economists is a good deal attenuated by the habitual assumption . . . that there is a definite universal rate of profits and wages in a community; this last postulate implying (1) that the capital embarked in any undertaking will pass at once to another in which larger profits are for the time to be made; (2) that a laborer, whatever his ties and feelings, family, habit, or other engagements, will transfer himself immediately to any place where, or employment in which, larger wages are to be earned; (3) that both capitalists and laborers have a perfect knowledge of the condition and prospects of industry throughout the country, both in their own and in other occupations.” — J. K. Ingram.
“In proof of the equalization of profits, Mr. Cairnes urges that capital deserts or avoids occupations which are known to be comparatively unremunerative; while if large profits are known to be realized in any investment there is a flow of capital toward it. Hence it is inferred that capital finds its level like water. But surely the movement of capital from losing to highly profitable trades proves only a great inequality of profits.” — Cliffe Leslie.

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Course Description and Enrollment
1889-90

Instructors	Course number, name, and content	Hours per week	Enrollment by class	Total enrollment
Prof. Taussig and Mr. Brooks [see next posting for information about Brooks]	2. History of Economic Theory. First half-year:* Lectures on the History of Economic Theory.—Discussion of selections from Adam Smith and Ricardo.—Topics in distribution, with special reference to wages and managers’ returns.—Second half-year: Modern Socialism in France, Germany, and England.—An extended thesis from each student.	3	7 Seniors, 12 Juniors, 1 Sophomore, 4 Others	24

Source: Harvard University, Annual Reports of the President and Treasurer of Harvard College, 1889-90, p. 80.

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1889-90
POLITICAL ECONOMY 2.
[Mid-Year Examination. 1890.]

Sidgwick supposes that, in a country where the ratio of auxiliary to remuneratory capital is 5 to 1, 120 millions are saved and added to the existing capital, and asks, “in what proportion are we to suppose this to be divided?” Answer the question.
On the same supposition Cairnes’s answer is expected to be that the whole of the 120 millions would be added to the wages fund. “But then, unless the laborers became personally more efficient in consequence — which Cairnes does not assume — there would be no increase in the annual produce, and therefore the whole increase in the wages fund would be taken out of the profits within the year after the rise. Now, though I do not consider saving to depend so entirely on the prospect of profit as Mill and other economists, still I cannot doubt that a reduction in profits by an amount equivalent to the whole amount saved would very soon bring accumulation to a stop; hence the conclusion from Cairnes’s assumptions would seem to be that under no circumstances can capital increase to any considerable extent unless the number of laborers increases also.”
What would Cairnes say to this?
Explain what is Sidgwick’s conclusion as to the effect of profits on accumulation; and point out wherein his treatment of this topic differs from Cairnes’s and from Ricardo’s.
In what sense does George use the term “wages”? Ricardo? Mill? Cairnes?
Explain wherein Sidgwick’s general theory of distribution differs from Walker’s.
Compare the treatment of rent by the Physiocratic writers and by Adam Smith.
What was Adam Smith’s doctrine as to labor as a means of value? What was Ricardo’s criticism on that doctrine?
What did Adam Smith say to the argument that taxes on the necessaries of life raise the price of labor, and therefore give good ground for import duties on the commodities produced at home by the high-priced labor? What would Ricardo have said to the same argument?
How does Ricardo show that the application of labor and capital to worse soil brings a decline of profits not only in agriculture, but in all industries?

Source: Harvard University Archives. Examination papers in economics 1882-1935 of Professor F. W. Taussig (HUC 7882). Scrapbook.

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Courses Exam Questions Harvard

Harvard. Introductory Economics, Final Exams. Taussig, 1914-1915

Post author By Irwin Collier
Post date 2017-08-28

Frank W. Taussig played a central role in Harvard’s economics at two important stages. He was the lecturer for the entry-level Principles of Economics course for undergraduates and the core economic theory course for graduate students. In addition he covered the field of international economics.

The course announcement, enrollment figures, and the final examination questions for his principles course come from four different sources, three of which are available on-line. Over the past few weeks, I have posted corresponding material from the twenty economics courses offered at Harvard during the 1914-15 year for which the final examination questions had been printed and subsequently published.

The following year (1915) Edmund E. Day and R. S. Davis (who belonged to the team of instructors and assistants for this principles course) published their Questions on the Principles of Economics (New York, Macmillan) that was arranged by topics to follow Taussig’s own textbook Principles of Economics (Second, revised edition of 1915: Volume One; Volume Two).

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Course Announcement

Economics A. (formerly 1). Principles of Economics. Tu., Th., Sat., at 11.
Professor Taussig and Asst. Professor Day and five assistants.

Course A is introductory to the other courses. It is intended to give a general survey of the subject for those who take but one course in Economics, and also to prepare for the further study of the subject in advanced courses. It is usually taken with most profit by undergraduates in the second year of their college career. It may not be taken by Freshmen without the consent of the instructor. History 1 or Government 1, or both of these courses, will usually be taken to advantage before Economics A. [p. 61]

Course A gives a general introduction to economic study, and a general view of Economics for those who have not further time to give to the subject. It undertakes a consideration of the principles of production, distribution, exchange, money, banking, international trade, and taxation. The relations of labor and capital, the present organization of industry, and the recent currency legislation of the United States will be treated in outline.

The course will be conducted partly by lectures, partly by oral discussion in sections. A course of reading will be laid down, and weekly written exercises will test the work of students in following systematically and continuously the lectures and the prescribed reading. [p. 62]

Source: Division of History, Government, and Economics 1914-15. Official Register of Harvard University, Vol. XI, No. 1, Part 14 (May 19, 1914).

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Course Enrollment

[Economics] A. Professor Taussig and Asst. Professor Day, assisted by Dr. J. S. Davis, and Messrs. P. G. Wright, Burbank, Vanderblue, W. C. Clark, and Monroe.—Principles of Economics.

Total 491: 1 Graduate, 30 Seniors, 137 Juniors, 260 Sophomores, 11 Freshmen, 52 Others.

Source: Report of the President of Harvard College, 1914-15, p. 59.

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Mid-year Examination

ECONOMICS A

[Arrange your answers strictly in the order of the questions. Answer all the questions; be concise; plan your answers with care; and leave time for revision at the close.]

In what ways, if at all, is the development of the complex division of labor connected with (a) the monotony of labor; (b) the Industrial Revolution; (c) integration of industry; (d) the recurrence of industrial crises?
Explain: external economies; internal economies. Which set of economies is most significant for the explanation of (a) the localization of industry; (b) increasing returns; (c) the development of monopoly?
If possible distinguish between

(a) diminishing returns and diminishing utility;
(b) by-product and joint product;
(c) joint cost and joint demand;
(d) “corners” and monopolies;
(e) median and arithmetical mean.

Explain briefly the immediate and the ultimate effects (if any) which each of the following changes, taken separately, will tend to have on the price of cotton, cotton-seed oil, and cotton-mill machinery; (a) prohibition of organized speculation; (b) a change of fashion toward greater use of cotton fabrics; (c) doubling of the population of the country. (Assume for all three cases that there is no international trade, and that the quantity of money remains the same.)
In what direction and by what process, if at all, would the following tend to affect the value of money in the United States; (a) increased demand for gold ornaments; (b) increasingly lavish expenditures by spendthrifts; (c) a continued drain of specie to the East; (d) a larger output of silver in the United States; (e) abolition of all legally required banking reserves?
Under what conditions does inconvertible paper money circulate as readily as specie? Under what conditions, not as readily?
Under what conditions is the value of inconvertible paper money as great as that of specie? Under what conditions is its value less than that of specie?
State two indications of its having less value than specie. Which of the two is the more significant? Which is the more easily ascertained?
State points of similarity, points of difference, between the Federal Reserve system and the English banking system as regards (a) centralization of reserves; (b) centralization of note issue; (c) measures available for preventing panics.
Under what circumstances, if any, can a country have a permanent excess of imports? Under what circumstances, if any, a permanent outflow of specie? Does an excess of imports lead to an outflow of specie?
Wherein, if at all, does a country gain or lose in its foreign trade (a) if prices and money incomes are higher than in foreign countries; (b) if prices and money incomes are lower?

Mid-Year. 1915.

Source: Harvard University Archives. Examination Papers in Economics, 1882-1935. Prof. F. W. Taussig. (HUC 7882). Scrapbook, p. 106.

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Final Examination

ECONOMICS A

Arrange your answers strictly in the order of the questions.
Answer all the questions.

Explain concisely: —

diminishing returns,
margin of cultivation,
equilibrium of supply and demand,
economic rent.

Construct a simple index number of prices for 1914, using 1908 as the base.

	1908	1914
Wheat, bbl.	$8.00	$12.00
Coal, ton	8.00	8.00
Iron, ton	18.00	9.00
Lumber, 1000 feet	20.00	15.00
Meat, lb.	.20	.30
Sugar, lb.	.10	.10

(1) Would the index-number point to a rise or a fall in the value of money? (2) Would a Board of Arbitration be justified in recommending a change in wages? If so, on what basis? If not, why not?

Under what circumstances, if under any, will the imposition of a import duty cause the price of the dutiable commodity to fall? Under what will it fail to affect the price? Under what will it cause the price to rise?
To what cause or causes should you ascribe: —

(a) the high level of general wages in the United States;
(b) the high wages of skilled workmen such as plumbers;
(c) the high wages of domestic servants in the United States;
(d) the high wages of trained nurses.

Why is saving no less advantageous for laborers than lavish expenditure? Why do laborers usually favor ” making work “?
“The standard of living affects wages not directly, but ” — how?
What evidence of varying standards of living appears in the statistics of births and deaths for different countries? for different social classes?
“The special question presented in this regard by the trust movement seems to be whether large-scale management adds something to the gains from large-scale production in the narrower sense. Here, too, it would appear at first sight that the matter may be allowed to settle itself. Let them fight it out and let that form of organization survive which does the work most cheaply.”
Explain (a) what is meant by large-scale management and large-scale production; (b) what grounds there are for saying that they should be allowed to fight it out, what grounds for saying that they should not; (c) what legislation has recently been enacted in the United States on this subject.
“Important distinctions exist between full-fledged socialism and public management of selected industries.” What are the distinctions?

Final. 1915.

Source: Harvard University Examinations. Papers Set for Final Examinations in History, History of Science, Government, Economics, Philosophy, Psychology, Social Ethics, Education, Fine Arts, Music in Harvard College. June 1915, pp. 39-59.

Image Source: Frank W. Taussig in Harvard Class Album, 1915.

Tags Burbank, ClarkWC, DavisJS, Day, Monroe, Taussig, Vanderblue, WrightPG

Courses Exam Questions Harvard

Harvard. Graduate Economic Theory. Taussig, 1914-15

Post author By Irwin Collier
Post date 2017-08-15

Frank W. Taussig was the dominant figure in the Harvard economics department up to his retirement in 1935, having been a member of the faculty for over a half century. This posting contains the course announcement for Taussig’s core graduate economic theory course from 1914-15, enrollment figures, and the final examination questions (for both semesters!). The information comes from four different sources, three of which are available on-line. Over the next few weeks, I’ll be posting corresponding material from the twenty economics courses at Harvard during the 1914-15 year for which the final examination questions had been printed and subsequently published.

_______________________

Course Announcement

Primarily for Graduates

Except by special vote of the Department the courses for graduates are open to those undergraduates only who are in their last year of work and are candidates for the degree with distinction in the Division of History, Government, and Economics; but students of good standing may, in their last year of study, be admitted to Course 32, if they can show that they have special need of the subject. [p. 67]

I. Economic Theory and Method

Economics 11. Economic Theory. Mon., Wed., Fri., at 2.30. Professor Taussig.

Course 11 is intended to acquaint the student with some of the later developments of economic thought, and at the same time to train him in the critical consideration of economic principles and the analysis of economic conditions. The exercises are accordingly conducted mainly by the discussion of selected passages from the leading writers; and in this discussion the students are expected to take an active part. The writings of J. S. Mill, Cairnes, F. A. Walker, Clark, Marshall, Böhm-Bawerk, and other recent authors, will be taken up. Attention will be given chiefly to the theory of exchange and distribution. [p. 67]

Source: Division of History, Government, and Economics 1914-15. Official Register of Harvard University, Vol. XI, No. 1, Part 14 (May 19, 1914).

_______________________

Course Enrollment

[Economics] 11. Professor Taussig.—Economic Theory.

Total 34: 27 Graduates, 4 Seniors, 2 Juniors, 1 Other.

Source: Report of the President of Harvard College, 1914-15, p. 59.

_______________________

Final Examination (first term)

ECONOMICS 11

Arrange your answers in the order of the questions.

“Given machinery, raw materials, and a year’s subsistence for 1000 laborers, does it make no difference with the annual product whether those laborers are Englishmen or East Indians?
… The differences in the industrial quality of distinct communities of laborers are so great as to prohibit us from making use of capital to determine the amount that can be expended in any year or series of years in the purchase of labor.”
Under what further suppositions, if under any, does this hypothetical case tell in favor of those holding that wages are paid from a wages fund? Under what suppositions, if under any, in favor of those holding views like Walker’s?
(a) “The labourer is only paid a really high price for his labour when his wages will purchase the produce of a great deal of labour.”
(b) “If I have to hire a labourer for a week, and instead of ten shillings I pay him eight, no variation having taken place in the value of money, the labourer can probably obtain more food and necessaries with his eight shillings than he before obtained for ten.”
Explain concisely what Ricardo meant.
What, according to Ricardo, would be the effects of a general rise of wages on profits? on the prices of commodities? on rents? the well-being of laborers?
“The component elements of Cost of Production have been set forth in the first part of this enquiry. The principal of them, and so much the principal as to be nearly the sole, we found to be Labour. What the production of a thing costs to its producer, or its series of producers, is the labour expended in producing it. If we consider as the producer the capitalist who makes the advances, the word Labour may be replaced by the word Wages: what the produce costs to him, is the wages which he has had to pay.” J.S. Mill.
What would Ricardo say to the proposed substitution [of “Wages” for “Labour”]? Cairnes? Marshall?
“Suppose that society is divided into a number of horizontal grades, each of which is recruited from the children of its own members, and each of which has its own standard of comfort, and increases in number rapidly when the earnings to be got in it rise above, and shrinks rapidly when they fall below that standard. Suppose, then, that parents can bring up their children to any trade in their own grade, but cannot easily raise them above it and will not consent to sink them below it. . . .
On these suppositions the normal wage in any trade is that which is sufficient to enable a laborer, who has normal regularity of employment, to support himself and a family of normal size according to the standard of comfort that is normal in the grade to which his trade belongs. In other words the normal wage represents the expenses of production of the labor according to the ruling standard of comfort.” Marshall.
On these suppositions, would value depend in the last analysis on cost or utility?
(a) “Were it not for the tendency [to diminishing returns] every farmer could save nearly the whole of his rent by giving up all but a small piece of his land, and bestowing all his labor and capital on that. If all the labor and capital which he would in that case apply to it gave as good a return in proportion as that he now applies to it, he would get from that plot as large a produce as he now gets from his whole farm; and he would make a net gain of all his rent save that of the little plot that he retained.”
(b) “The return to additional labour and capital [applied to land] diminishes sooner or later; the return is here measured by the quantity of the produce, not by its value.”
(c) “Ricardo, and the economists of his time generally were too hasty in deducing this inference [tendency to increased pressure] from the law of diminishing return; and they did not allow enough for the increase of strength that comes from organization. But in fact every farmer is aided by the presence of neighbours, whether agriculturists or townspeople. . . . If the neighbouring market town expands into a large industrial centre, all his produce is worth more; some things which he used to throw away fetch a good price. He finds new openings in dairy farming and market gardening, and with a larger range of produce he makes use of rotations that keep his land always active without denuding it of any one of the elements that are necessary for its fertility.”
Have you any criticisms or qualifications to suggest on these passages from Marshall?
“When the artisan or professional man has once obtained the skill required for his work, a part of his earnings are for the future really a quasi-rent. The remainder of his income is true earnings of effort. But this remainder is generally a large part of the whole. And herein lies the contrast. When a similar analysis is made of the profits of the undertaker of business, the proportions are found to be different: in this case nearly all is quasi-rent.”
Explain what you believe to be Marshall’s meaning, and why he considers undertaker’s profits not to be “true earnings of effort.”

Source: Harvard University Archives. Examination Papers in Economics, 1882-1935. Prof. F. W. Taussig. (HUC 7882). Scrapbook, p. 104.

_______________________

Final Examination (second term)

ECONOMICS 11

Arrange your answers in the order of the questions.

Explain briefly what Walker meant by the “no-profits” business man; what Marshall means by the “representative firm”; what your instructor means by the “marginal product of labor.” How are the three related?
Explain briefly whether anything in the nature of a producer’s surplus or a consumer’s surplus appears as regards (a) instruments made by man and the return secured by their owners; (b) unskilled labor and the wages paid for it; (c) business management and business profits.
“Wages are paid by the ordinary employer as the equivalent of the discounted future benefits which the laborer’s work will bring him — the employer — and the rate he is willing to pay is equal to the marginal desirability of the laborer’s services measured in present money. We wish to emphasize the fact that the employer’s valuation is (1) marginal, and (2) discounted. The employer pays for all his workmen’s services on the basis of the services least desirable to him, just as the purchaser of coal buys it all on the basis of the ton least desirable to him; he watches the ‘marginal’ benefits he gets exactly as does the purchaser of coal. At a given rate of wages he ‘buys labor’ up to the point where the last or marginal man’s work is barely worth paying for. … If, say, he decides on one hundred men as the number he will employ, this is because the hundredth or marginal man he employs is believed to be barely worth his wages, while the man just beyond this margin, the one hundred and first man, is not taken on because the additional work he would do is believed to be not quite worth his wages.”
Does this seem to you in essentials like the doctrine of Clark? of your instructor?
An urban site is leased at a ground rental of $2,000 a year; a building is erected on it costing $50,000; the current rate of interest is 4%.
Suppose the net rental of the property (after deduction of expenses and taxes) to be $8,000. What is the nature of this return, according to J. S. Mill? Marshall? Clark?
Suppose the net rental to be $3,000; answer the same questions.
“That capital is productive has often been questioned, but no one would deny that tools and other materials of production are useful; yet these two propositions mean exactly the same when correctly understood. Capital consists primarily of tools and other materials of production, and such things are useful only in so far as they add something to the product of the community. Find out how much can be ‘produced without any particular tool or machine, and then how much can be produced with it, and in the difference you have the measure of its productiveness.”
What would Bohm-Bawerk say to this? What is your own?
“Wages bear the same relation to man’s services that rent does to the material uses of wealth. . . . While rent is the value of the uses of things, wages is the value of the services of men. . . .The resemblance is very close between rent and wages.”
“The principles governing the rate of wages are, in a general way, similar to those governing the rate of rent. The rate of a man’s wages per unit of time is the product of the price per piece of the work he turns out multiplied by his rate of output. His productivity depends on technical conditions, including his size, strength, skill, and cleverness.”
Explain what is meant by “rent” in these passages and by what writers it is used in this sense; and give your opinion on the resemblance between such “rent” and wages.
Bohm-Bawerk remarks that the theory which he has put forward bears “a certain resemblance” to the wages fund theory of the older English School, but differs from it in various ways, one of which is “the most important.” What are the points of resemblance? and what is this most important difference?
“While the slowness of Nature is a sufficient cause for interest, her productivity is an additional cause. . . . Nature is reproductive and tends to multiply. Growing crops and animals make it possible to endow the future more richly than the present. By waiting, man can obtain from the forest or farm more than he can by premature cutting or the exhaustion of the soil. In other words, not only the slowness of Nature, but also her productivity or growth, has a strong tendency to keep up the rate of interest. Nature offers man, as one of her optional income-streams, the possibility of great future abundance at trifling present sacrifice. This option acts as a bribe to man to sacrifice present income for future, and this tends to make present income scarce and future income abundant, and hence also to create in his mind a preference for a unit of present over a unit of future income.”
What would Bohm-Bawerk say to this? What is your own view?
Whom do you believe to be the writer of the passage?

Image Source: Frank W. Taussig in Harvard Class Album, 1915.

Tags Taussig

Fields Harvard

Harvard. Ph.D. candidates examined 1910-11

Post author By Irwin Collier
Post date 2017-06-27

This posting provides information for four Harvard economics Ph.D. candidates: their respective academic backgrounds, the six subjects of their general examinations along with the names of the examiners, the subject of their special subject, thesis subject and advisor(s) (where available).

________________________________________

DIVISION OF HISTORY AND POLITICAL SCIENCE
EXAMINATIONS FOR THE DEGREE OF PH.D.
1910-11

Notice of hour and place will be sent out three days in advance of each examination.
The hour will ordinarily be 4 p.m.

Alfred Burpee Balcom.

General Examination in Economics, Monday, May 1, 1911.
Committee: Professors Taussig (chairman), Bullock, Carver, Sprague, Young, and Perry.
Academic History: Acadia College, 1904-07; Harvard Graduate School, 1908-11. S.B., Acadia, 1907; A. M., Harvard, 1909. Austin Teaching Fellow, 1910-11.
General Subjects: 1. Economic Theory and its History. 2. Economic History since 1750. 3. Sociology and Social Reform. 4. Public Finance and Financial History. 5. Labor Problems and Industrial Organization. 6. Philosophy.
Special Subject: Economic Theory.
Thesis Subject: “Nassau William Senior as an Economist.” (With Professor Taussig.)

Lucius Moody Bristol.

General Examination in Economics (Social Ethics), Thursday, May 4, 1911.
Committee: Professors Peabody (chairman), Taussig, Carver, Sprague, Young, and Dr. Brackett.
Academic History: University of North Carolina, 1894-95; Boston University School of Theology, 1896-99; Harvard Divinity School, 1909-10; Harvard Graduate School, 1910-11. A.B., North Carolina, 1895; S.T.B., Boston University, 1899.
General Subjects: 1. Ethical Theory. 2. Economic Theory. 3. Labor Problems. 4. Social Reforms. 5. Sociology. 6. Statistics.
Special Subject: Social Reform.
Thesis Subject: “Conservation of Vital Forces in Boston.” (With Professor Peabody.)

Johann Gottfried Ohsol.

General Examination in Economics, Friday, May 5, 1911.
Committee: Professors Gay (chairman), Bullock, Carver, Sprague, Dr. Foerster, and Dr. Holcombe.
Academic History: Polytechnic Institute of Riga, 1899-1903; Harvard Graduate School, 1909-11. Candidate in Commerce, Riga, 1903.
General Subjects: 1. Economic Theory and its History. 2. Economic History since 1750. 3. Sociology and Social Reform. 4. Public Finance and Financial History. 5. Labor Problems and Industrial Organization. 6. History of American Institutions.
Special Subject: Labor Problems.
Thesis Subject: (undecided).

Ralph Emerson Heilman.

General Examination in Economics (Social Ethics), Thursday, May 11, 1911.
Committee: Professors Peabody (chairman), Taussig, Bullock, Carver, Dr. Brackett and Dr. McConnell.
Academic History: Morningside College, 1903-06; Northwestern University, 1906-07; Harvard Graduate School, 1909-11. Ph.B., Morningside, 1906; A.M., Northwestern, 1907.
General Subjects: 1. Ethical Theory. 2. Economic Theory and its History. 3. Poor Relief. 4. Social Reforms. 5. Sociology. 6. Labor Problems.
Special Subject: (undecided).
Thesis Subject: “Chicago Traction.” (With Professor Ripley.)

Source: Harvard University Archives. Harvard University, Examinations for the Ph.D. (HUC 7000.70), Folder “Examinations for the Ph.D., 1910-11”.

Image Source: Widener Library, 1915. Library of Congress Prints and Photographs Division, Washington, D.C. Digital ID: cph 3c14486

Tags Balcom, Bristol, Carver, Foerster, Gay, Heilman, Holcombe, Ohsol, Peabody, Perry, Sprague, Taussig, Young

Courses Economic History Harvard Suggested Reading Syllabus

Harvard. Readings for Modern Economic History. Ashley, 1899-1900

Post author By Irwin Collier
Post date 2017-06-23

The following course outline with reading assignments comes from one of the two year-long courses William J. Ashley taught at Harvard for nearly a decade around the turn of the 20th century. No copy of his reading list for Medieval Economic History of Europe is found in the Harvard Archive’s collections of course reading lists that include fewer and fewer courses as we move back to the earliest years of the 20th century and before. However there is the printed copy of the readings for the Economic History of Europe and the United States since 1500 that has been transcribed for this posting.

A biographical piece published in 1899 has already been posted in Economics in the Rear-view Mirror.

____________________________

From Taussig’s history of the department of economics:

“…The Department from the first gave attention to economic theory; and the slant which was thus given its work under Dunbar’s leadership persisted. It was always known in the country as giving much attention to the matters of principle which are indicated by the term ‘economic theory,’ and also to the history of the development of economic thought.

Another aspect, the historical, was emphasized by the appointment in 1892 of William J. Ashley* as Professor of Economic History. As in the case of Dunbar, this was an unprecedented move. Ashley’s appointment was evidence of a desire to promote the new current of thought for increased attention to history in its widest range: letters, law, morals, as well as economics. He remained in service for nearly 10 years, resigning to accept a chair in England. His place was soon taken by a scholar of no less distinction, Edwin F. Gay…”

________________

* Sir William Ashley, as he became in 1917, took a First in Modern History at Balliol in 1881, and in 1888 published his pioneer work, An Introduction to English Economic History and Theory.

Source: Chapter 9, “Economics” by Frank William Taussig in Samuel Eliot Morison (ed.), The Development of Harvard University since the Inauguration of President Eliot, 1869-1929. Cambridge: Harvard University Press, 1930.

___________________________

Course Announcement (from 1897-98)

[Economics] 11. The Modern Economic History of Europe and America (from 1500). Tu., Th., (and at the pleasure of the instructor) Sat., at 12. Professor Ashley.

This course, — which will usually alternate with Course 10 [The Mediaeval Economic History of Europe] in successive years, — while intended to form a sequel to Course 10, will nevertheless be independent, and may usefully be taken by those who have not followed the history of the earlier period. The main thread of connection will be found in the history of trade; but the outlines of the history of agriculture and industry will also be set forth, and the forms of social organization dependent upon them. England, as the first home of the “great industry,” will demand a large share of attention; but the parallel or divergent economic history of the United States, and of the great countries of western Europe, will be considered side by side with it.

Source: Harvard University, Faculty of Arts and Sciences. [Announcement of the] Division of History and Political Science Comprising the Departments of History and Government and Economics 1897-98, pp. 31-32.

___________________________

Course Enrollment

[Economics] 11. Professor ASHLEY.—The Modern Economic History of Europe. Lectures (2 or 3 hours).

Total 76: 15 Graduates, 21 Seniors, 26 Juniors, 6 Sophomores, 8 Others.

Source: Harvard University. Annual Report of the President of Harvard College 1899-1900, p. 69.

___________________________

ECONOMICS 11.
PRESCRIBED READING FOR THE FIRST HALF-YEAR

[Stamp: Harvard College Library, Cambridge, Mass. Jan 15, 1900]

(A supplement to, and not an alternative for, the lectures.)

* * * * *

Warner, English Industrial History, to p. 208.
Fiske, Discovery of America, I, pp. 256-334, 354-365,453-460; II, App. A and B.
Hunter, History of British India, I, ch. 1-5.
Marco Polo, Travels, ed. Yule; or pub. Cassell.
Hakluyt, Discovery of Muscovy, pub. Cassell.
Fox Bourne, English Merchants, 1886, pp. 13-149.
Easterlings, Hanse of London, Hanse Towns, and Hanseatic League in Palgrave’s Dictionary of Political Economy; or Hanse in Say et Chailley, Nouveau Dictionnaire d’Économie Politique; or Hanse in Handwörterbuch der Staatswissenschaften; or Hanseatic League in Encyclopœdia Britannica.
Pigeonneau, Histoire du Commerce de la France, I, pp. 211-218.
Jacobs, Story of Geographical Discovery.

* * * *

Seebohm, English Village Community, pp. 1-32; or Ashley, Economic History, I, §1; the former recommended.
Jones, Peasant Rents, ch. 2, 3, §§4-6, App., pp. 172-190.
Ashley, Economic History, II, ch. 4,5.
Belfort Bax, German Society at the close of the Middle Ages, Intro., and ch. 1, 5-8.
The Twelve Articles of the German Peasants in 1525; German text in Zimmermann, Geschichte des Bauernkrieges, Zweiter Theil, 1862, pp. 98 seq.; imperfect English translation in Belfort Bax, Peasants’ War, pp. 63 seq.
More’s Utopia (Arber’s reprint recommended), bk. I; or Harrisons’s Description of England (in Elizabethan England, Camelot series), ch. 1, 2, 4, 7, 9, 10.
Ashley, Economic History, II, ch. 1-3.
Articles of the Spurriers and White-tawyers in Riley’s Memorials of London, pp. 226-228, 232-234, and of the Exeter Tailors in English Gilds, pp. 312-316; or all three in Penn. and Reprints, vol. II, no. I.
Statute 5 Eliz. c. 4, in Statutes of the Realm, or in Prothero, Statutes and Constitutional Documents.
Levasseur, Histoire des classes ouvrières, II, pp. 119-126; or Martin Saint-Léon, Histoire des corporations de métiers, pp. 247-253.
Report of the Commission of the German Diet in 1522; text in Belfort Bax, German Society at the close of the Middle Ages, pp. 245-259; imperfect translation, ibid., pp. 231-245; together with the account of the Fuggers, , App. C.
Defoe, Tour through the Eastern Counties, pub. Cassell.
Defoe, From London to Land’s End, pub. Cassell.
Schmoller, Mercantile System.

* * * * *

ADDITIONAL READING RECOMMENDED.

Cunningham, Growth of English Industry and Commerce. I. Early and Middle Ages, Bk. III, ch. 4; Bk. IV, ch. 2-5; Bk. V, ch. 5. II. Modern Times, Bk. VI, ch. 4.
Cunningham, Alien Immigrants to England, ch. 3 & 4.
Pigeonneau, Histoire du Commerce de la France, Tome II, livre 1.
Lindner, Die deutsche Hanse.
Dixon, The Florentine Wool Trades, in R. Hist. Soc., 1898.
Ruskin, The Stones of Venice, ch. 1, §§1-16.
Hallam, Account of the Government of Florence, in Middle Ages, I, ch. 3, pt. 2.
The Common Weal of this Realm of England, ed. Lamond.
Cheyney, Social Changes in England in the 16^th Century.
Leadam, The Domesday of Inclosures, R. Hist. Soc.

ECONOMICS 11.
PRESCRIBED READING FOR THE SECOND HALF-YEAR

[Handwritten pencil note: “1899-1900”]

(A supplement to, and not an alternative for, the lectures.)

* * * * *

Warner, English Industrial History, p. 209 to end.

* * *

Text of the Navigation Acts, Amer. History Leaflets, No. 19.
Text of the Poor Law of Elizabeth, 43-44 Eliz., cap. 2, in Statutes of the Realm, or Prothero Constitutional Documents.

* * *

Hunter, History of British India, ch. 6-10.
Noel, Histoire du Commerce du Monde, II, pp. 150-164, 270-274.
Macaulay, Lord Clive, in Critical and Historical Essay.
Adam Smith, Wealth of Nations, Bk. V, ch. 1, pt. 3, art. 1.
Day, The Culture System, Yale Review, Feb. 1900.
Seeley, Expansion of England, Course I, Lectures 1, 2, 6; Course 2, Lecture 3.
Mahan, Influence of Sea Power, 1660-1783, ch. 1.
Ashley, The Commercial Legislation of England and the American Colonies, 1660-1760, Quarterly Journal of Economics, Nov. 1899.

* * *

Prothero, Pioneers and Progress of English Farming, pp. 29-103.
Seeley, The Emancipating Edict of Stein, in his Life of Stein, Pt. 3, ch. 4; reprinted in Rand, Economic History.

* * *

Fox Bourne, English Merchants, p. 150 to end.
Sargent, The Economic Policy of Colbert.
Hewins, English Trade and Finance, pp. 74-164.
Toynbee, The Industrial Revolution, pp. 27-136.
Fowle, The Poor Law, ch. 3, 4.
Defoe, Essay on Projects, pub. Cassell; especially pp. 1-42, 77-80.
Macpherson, Annals of Commerce. Account of the South Sea Company and the Mississippi Scheme, s. aa. 1711, 1713-1715, 1717-1720.
Macaulay, Account of the
East India Company (ch. 18 and elsewhere),
Bank of England (ch. 20),
Recoinage (ch. 21),
Darien Company (ch. 24),
in History of England.

* * * * *

ERVM. Curator’s Favorites, Second in the series.

Post author By Irwin Collier
Post date 2017-06-20

The collection of artifacts here at Economics in the Rear-view Mirror has grown sufficiently large that part of my self-imposed curation duties now include adding postings to link back to some earlier postings that perhaps newer visitors and subscribers have yet to discover.

Today I add the list of reading assignments extracted from Frank W. Fetter’s student notes from 1923-24 when he took Frank W. Taussig’s course “Economics 11”, Economic Theory. This list too has links to the individual items on the reading list. It was first posted June 12, 2015 when ERVM was barely a month-old blog, since that time it has attracted 41 page visits. It is too good to miss, IMHO.

Another such underused resource and the first of the series of Curator’s Favorites is the list of items “Recommended Teacher’s Library of Economics” put together by J. Laurence Laughlin and published in 1887.

Tags FetterFW, Taussig

Exam Questions Harvard

Harvard. Final Examinations for Taussig’s Course “Economic Theory. Both terms, 1922-23

Post author By Irwin Collier
Post date 2017-06-19

Frank W. Taussig taught a two term economic theory course offered for both graduates and undergraduates at Harvard for nearly the entire first third of the twentieth century. Some years he taught one term and a colleague would teach the other term, but usually it was his core course in the curriculum. Today’s posting is dedicated to the 1922-23 course examinations and constitutes a first for Economics in the Rear-view Mirror by having links to the pages or sections of economic works that correspond to the questions.

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Course Description

1921-22

[Economics] 11. Economic Theory. Mon., Wed., Fri., at 2.30. Professors TAUSSIG and YOUNG.

Course 11 is intended to acquaint the student with the development of economic thought since the beginning of the nineteenth century, and at the same time to train him in the critical consideration of economic principles. The exercises are conducted mainly by the discussion of selected passages from the leading writers; and in this discussion the students are expected to take an active part. Attention will be given to the writings of Ricardo and J. S. Mill, and to representative modern economists.

Source: Division of History, Government, and Economics, 1921-22. Official Register of Harvard University, Vol. XVIII, No. 20 (April 21, 1921), p. 68.

1924-25

[Economics] 11. Economic Theory. Mon., Wed., Fri., at 2. Professor Taussig

Course 11 is intended to acquaint the student with the development of economic thought since the beginning of the nineteenth century, and at the same time to train him in the critical consideration of economic principles. The exercises are conducted mainly by the discussion of selected passages from the leading writers; and in this discussion the students are expected to take an active part. A careful examination is made of the writings of Ricardo and J. S. Mill, and of representative modern economists, such as Marshall, Böhm-Bawerk, Clark.

Source: Division of History, Government, and Economics 1924-25. Official Register of Harvard University, Vol. XXI, No. 22 (April 30, 1924), p. 71.

_____________________

Midyear Final Exam

1922-23
HARVARD UNIVERSITY
ECONOMICS 11

Arrange your answers in the order of the questions

1. (a) “Given machinery, raw materials, and a year’s subsistence for 1000 laborers, does it make no difference with the annual product whether those laborers are Englishmen or East-Indians?”

[Frank W. Taussig, Wages and Capital: An Examination of the Wages Fund Doctrine (New York, 1896), p. 292,
where Taussig discusses a passage in Francis Amasa Walker’s, The Wages Question: A Treatise on Wages and the Wages Class, (New York, 1876), p. 145.]

(b) “In some exceptional industries it happens that the employer realizes on his product in a shorter time than this (a week), so that the laborer is not only paid out of the product of his industry, but actually advances to the employer a portion of the capital on which he operates.”

[Francis Amasa Walker, The Wages Question: A Treatise on Wages and the Wages Class, (New York, 1876), pp. 134-5.]

(c) “On American whaling ships the custom is not to pay fixed wages, but a “lay,” or a portion of the catch, which varies from a sixteenth to a twelfth to the captain down to a three-hundredth to the cabin-boy. Thus, when a whaleship comes into New Bedford or San Francisco after a successful cruise, she carries in her hold the wages of her crew, as well as the profits of her owners, and an equivalent which will reimburse them for all the stores used up during the voyage. Can anything be clearer than that these wages — this oil and bone which the crew of the whaler have taken — have not been drawn from capital, but are really a part of the produce of their labor”?

[Henry George, Progress and Poverty, 25^th Anniversary edition, (Garden City,1926), pp. 52-53.]

Are these three situations essentially similar? And what is the bearing of each of them on the question under debate?

“The extra gains which any producer or dealer obtains through superior talents for business, or superior business arrangements, are very much of a similar kind (analogous to rent). If all his competitors had the same advantages, and used them, the benefit would be transferred to their customers, through the diminished value of the article; he only retains it for himself because he is able to bring his commodity to market at a lower cost, while its value is determined by a higher. All advantages, in fact, which one competitor has over another, whether natural or acquired, whether personal or the result of social arrangements, bring the commodity, so far, into the Third Class, and assimilate the possessor of the advantage to a receiver or of rent.” Did Walker add anything of essential significance to this statement of Mill’s?
Mill, Principles of Pol. Econ., pp. 476-77.

[John Stuart Mill. Principles of Political Economy. Vol. I, Fifth London Edition (New York, 1864) pp. 586-87.]

(a) “It is not to be understood that the natural price of labour, estimated even in food and necessaries, is absolutely fixed and constant. It varies at different times in the same country, and very materially differs in different countries. It essentially depends on the habits and customs of the people.”

[David Ricardo, The Principles of Political Economy & Taxation. Everyman’s Library Edition (London, 1912), p. 54.]

(b) “A tax on raw produce, and on the necessaries of the labourer, would have another effect — it would raise wages. From the effect of the principle of population on the increase of mankind, wages of the lowest kind never continue much above that rate which nature and habit demand for the support of the labourers. This class is never able to bear any considerable proportion of taxation; and, consequently, if they had to pay 8s. per quarter in addition for wheat, and in some smaller proportion for other necessaries, they would not be able to subsist on the same wages as before, and to keep up the race of labourers. Wages would inevitably and necessarily rise.”

[David Ricardo, The Principles of Political Economy & Taxation. Everyman’s Library Edition (London, 1912), p. 100.]

(c) “If I have to hire a labourer for a week, and instead of ten shillings I pay him eight, no variation having taken place in the value of money, the labourer can probably obtain more food and necessaries with his eight shillings than he before obtained for ten.”

[David Ricardo, The Principles of Political Economy & Taxation. Everyman’s Library Edition (London, 1912), p. 11.]

Are these several statements of Ricardo’s consistent?

In which of the following passages is the tendency to diminishing returns treated as referring to the amount of the produce, in which as referring to the value of the produce? Which method of treatment seems to you the proper one?

(a) “Whatever rise may take place in the price of corn, in consequence of the necessity of employing more labor and capital to obtain a given additional quantity of produce, such rise will always be equalled by the additional rent or additional labor employed. . . . Whether the produce belonging to the farmer be 180, 170, 160, or 150 quarters, he always obtains the same sum of £720 for it; the price increasing in an inverse proportion to the quantity.” — Ricardo.

[David Ricardo, The Principles of Political Economy & Taxation. Everyman’s Library Edition (London, 1912), p. 67.]

(b) The Channel Islands obtain agricultural produce to the value of £50 to each acre of the aggregate surface of the island. Fifty pounds’ worth of agricultural produce from each acre of the land is sufficiently good. But the more we study the modern achievements of agriculture the more we see that the limits of productivity of the soil are not attained. . . . I can confirm Mr. Bear’s estimate to the effect that under proper management even a cool greenhouse, which covers 4050 square feet, can give a gross return of £180.” — Kropotkin.

[Petr Alekssevich Kropotkin. Fields, factories, and workshops, (New York, 1907), pp. 91,118.]

(c) “Ricardo, and the economists of his time generally were too hasty in deducing this inference [tendency to increased pressure] from the law of diminishing return; and they did not allow enough for the increase of strength that comes from organization. But in fact every farmer is aided by the presence of neighbours, whether agriculturists or townspeople. . . . If the neighbouring market town expands into a large industrial centre, all his produce is worth more; some things which he used to throw away fetch a good price. He finds new openings in dairy farming and market gardening, and with a larger range of produce he makes use of rotations that keep his land always active without denuding it of any one of the elements that are necessary for its fertility.” — Marshall.

[Alfred Marshall. Principles of Economics, 8^th ed., Book IV, Ch. III, §6 (London, 1920).]

“Ricardo expresses himself as if the quantity of labour which it costs to produce a commodity and bring it to the market, were the only thing on which its value depended. But since the cost of production to the capitalist is not labour but wages, and since wages may be either greater or less, the quantity of labour being the same; it would seem that the value of the product cannot be determined solely by the quantity of labour, but by the quantity together with the remuneration; and that values must partly depend on wages.” — J. S. Mill.

[John Stuart Mill. Principles of Political Economy. Vol. I, Fifth London Edition (New York, 1864) p. 564.]

What would Ricardo say to this? and in what way, according to Mill, do wages affect value?

Explain briefly external economies; internal economies.
It has been said that internal economies cause an increase of demand, external economies result from an increase of demand. Do you agree?
Suppose internal economies to become greater indefinitely, as output enlarges; what consequences would ensue? Suppose the same for external economies, what consequences?
“There is one general law of demand: the greater the amount to be sold, the smaller must be the price at which it is offered in order that it may find purchasers. . . . The one universal rule to which the demand curve conforms is that it is inclined negatively throughout the whole of its length.”

[Alfred Marshall. Principles of Economics. 8th edition, Book III, Ch. III, §5, and footnote no. 2 (London, 1920), p. 99.]

“The demand curve over short periods — which may be a matter of weeks or months — is not necessarily inclined throughout in the same direction. It may be inclined positively. And similarly the supply curve does not necessarily have that constant positive inclination which is usually assumed. In the course of the higgling of the market this in its turn may have a negative inclination.”

[Frank W. Taussig, “Is the Market Price Determinate?” Quarterly Journal of Economics, p. 402.]

Whom do you believe to be the writers of these passages? Can they be harmonized? If so, how? If not, why not?

The series of hypotheses made by Marshall concerning “meteoric showers of stones harder than diamonds”; the nature of the incomes derived by those finding them in the several cases; and the general principle which is thus illustrated.

[Alfred Marshall. Principles of Economics. Book V, Ch. IX, §2 (London, 1920), p. 415ff.]

Mid-Year. 1923.

_____________________

Academic Year-End Final Exam

1922-23
HARVARD UNIVERSITY
ECONOMICS 11

Arrange your answers in the order of the questions.

“Labour of different kinds differently rewarded. This no cause of variation in the relative value of commodities.” On what grounds did Ricardo reach the conclusion summarized by him in these sentences? Is it consistent with the general trend of his theory of value?

[David Ricardo, The Principles of Political Economy & Taxation. Everyman’s Library Edition (London, 1912), p. 11.]

“This doctrine [about non-competing groups] was given its name by J. E. Cairnes. . . . He supposed it to be a rare and remarkable exception to what he believed was the general rule, that the cost-of-production regulated the price of goods — essentially a “labor-theory of value.” We regard it merely as a helpful way of presenting a particular case of the general rule that the value of agents is derived from their products when the market is viewed as a whole.”

[Frank A. Fetter, Economic Principles (New York, 1915), p. 221.]

What would Cairnes say to this? What is your own view on the “general rule” stated in the concluding sentence?

[John E. Cairnes, Some Leading Principles of Political Economy, Newly Expounded, Chapter III, §7 “Nature of Reciprocal Demand as between nations and non-competing industrial groups”. (New York,1874), pp. 87ff.]

“Suppose that society is divided into a number of horizontal grades, each of which is recruited from the children of its own members; and each of which has its own standard of comfort, and increases in numbers rapidly when the earnings to be got in it rise above, and shrinks rapidly when they fall below that standard. Suppose, then, that parents can bring up their children to any trade in their own grade, but cannot easily raise them above it and will not consent to sink them below it. . . .

[Quote is from Alfred Marshall, Principles of Economics (Second Edition, London, 1891). Vol. I, Book VI, Chapter 1, §3, pp. 557-8.
Frank W. Taussig, International Trade, pp. 53ff.]

On these suppositions, would Cairnes say that value was determined by cost? What would Marshall say?

(a) “We have next to study the conditions of Business Management; and in so doing we must have in view a problem that will occupy our attention as we go on. It arises from the fact that, though in manufacturing at least nearly every individual business, so long as it is well managed, tends to become stronger the larger it has grown; and though prima facie we might therefore expect to see large firms driving their smaller rivals completely out of many branches of industry, yet they do not in fact do so.”

[Quote is from Alfred Marshall, Principles of Economics (Second Edition, London, 1891). Vol. I, Book IV, Chapter XII, §1, p. 349.]

(b) “Since then business ability in command of capital moves with great ease horizontally from a trade which is overcrowded to one which offers good openings for it; and since it moves with great ease vertically, the abler men rising to the higher posts in their own trade, we see, even at this early state of our inquiry, some good reasons for believing that in modern England the supply of business ability in command of capital accommodates itself, as a general rule, to the demand for it; and thus has a fairly defined supply price.”

[Quote is from Alfred Marshall, Principles of Economics (Eighth Edition, London, 1920). Book IV, Chapter XII, §12, p. 313.]

What is Marshall’s solution of the problem stated in the first of these passages? What sort of supply schedule do you suppose him to have in mind in the second? What would Walker say on both passages?

“If the production of any, even the smallest, portion of the supply, requires as a necessary condition a certain price, that price will be obtained for all the rest. . . . The value, therefore, of an article (meaning its natural, which is the same with its average value) is determined by the cost of that portion of the supply which is produced and brought to market at the greatest expense. This is the Law of Value of the third of the three classes into which all commodities are divided. . . . Rent, therefore, forms no part of the cost of production which determines the value of agricultural produce.”

[John Stuart Mill. Principles of Political Economy. Vol. I, Book III, Chapter V §2, Fifth London Edition (New York, 1864) pp. 579-81.]

By whom do you suppose this passage to have been written? What would Marshall say to it?

“‘Rent is not an element in price’ — such is the classical statement on the subject. . . . But, if one defines rent as product imputable to a concrete agent, the impossibility of maintaining such a claim becomes apparent. Even if one were to restrict the term rent to the product created by land, the claim that it is not an element in adjusting market values would be absurd; for it would amount to saying that a certain part of the output of every kind of goods has no effect on their market value. The ‘price’ referred to in the formula is, of course, the market value expressed in units of currency.” What do you say?

[John Bates Clark, The Distribution of Wealth Chapter XXIII, (1899, reprint New York, 1908), p. 358.]

“When the artisan or professional man has once obtained the skill required for his work, a part of his earnings are for the future really a quasi-rent of the capital and labour invested in fitting him for his work, in obtaining his start in life, his business connections, and generally his opportunity for turning his faculties to good account; and only the remainder of his income is true earnings of effort. But this remainder is generally a large part of the whole. And here lies the contrast. For when a similar analysis is made of the profits of the business man, the proportions are found to be different: in his case the greater part is quasi-rent.” Why? or why not?

[Alfred Marshall, Principles of Economics (Eight Edition, London, 1920). Book VI, Chapter VIII, §8, p. 622.]

(a) “Capital-goods imply waiting for the fruits of labor. Capital, on the contrary, implies the direct opposite of this: it is the means of avoiding all waiting. It is the remover of time intervals, — the absolute synchronizer of labor and its fruits. It is the means of putting civilized man in a position which, so far as time is concerned, is akin to that in which the rude forester stood, when when he broke off limbs of dead trees and laid them on his fire. The very appliances which, in their extent and complexity, seem in one view to mean endless waiting, in another view mean no waiting at all but the instantaneous appearance of the final fruits of every bit of labor that is put forth.”

[John Bates Clark, The Distribution of Wealth, Chapter XX, (1899, reprint New York, 1908), p. 311.]

(b) “Tools are productive, but time is the condition of getting tools — this is the simple and literal fact. The roundabout or time-consuming mode of using labor insures efficient capital-goods. . . . When the hatchet has worn itself completely out, and the fruits of using it are before the man in the large dwelling, he may look backward to the beginning of the process, when he faced nature empty-handed, and say: ‘Labor has done it all. Work and waiting have given me my goods.’ The working and the waiting have, indeed, insured the hatchet, as an incidental result of this way of working. Production that plans to put its fruits into the future will create capital-goods as an immediate effect, but labor and time are enough to make the ultimate effect certain. Let the man work intelligently through an interval of time, and the production of consumers’ wealth is sure.”

[John Bates Clark, The Distribution of Wealth, Chapter XX, (1899, reprint New York, 1908), p. 309.]

(c) “The effort of postponement, or the preference of uncertain future for certain present consumables, necessary for supplying capital, if it is an effort, is a continuous one lasting all the time the capital is in use. The critic who asks, why a single ‘act of abstinence’ which is past and done with should be rewarded by a perpetual payment of annual interest, fails to realise that, so far as saving involves a serviceable action of the saver, it goes on all the time that the saver lies out of the full present enjoyment of his property, i. e. as long as his savings continue to function as productive instruments.”

[J. A. Hobson, Work and Wealth: A Human Valuation (New York, 1914), p. 92.]

What would Clark say to the three propositions here stated? What are your own views?
By whom do you suppose the passages to have been written?

Final. 1923.

Source: Harvard University Archives. Examination Papers in Economics, 1882-1935. Prof. F. W. Taussig. (HUC 7882).

Image Source: Frank W. Taussig in Harvard Class Album 1925.

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Courses Exam Questions Harvard

Harvard. Final Exams in Economics. 1913-14.

Post author By Irwin Collier
Post date 2017-06-07

This posting merges information from three sources: brief course descriptions from the annual course announcement published for the Division of History, Government and Economics for the academic year 1913-14 in the Harvard Register; final examination questions published by Harvard in June 1914; and the mid-year (i.e. February) examination questions for two courses taught by Frank Taussig and pasted in a file scrapbook containing what appears to be all of his Harvard examinations.

At hathitrust.org there are online copies of the annual June publication of examination questions for 1912-13 through 1915-16. A transcription of the 1912-13 economics examinations has been posted earlier.

While sixteen courses have published final examinations that are transcribed below, there were still some seven or so economics courses not included in the published June volume. Further the mid-year (i.e. February) final exams for year long courses were not included in the published collection.

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Principles of Economics

Course Description
Economics A

[Economics] A. (formerly 1). Principles of Economics. Tu., Th., Sat., at 11.

Professor TAUSSIG and Asst. Professor DAY, assisted by Messrs. Burbank, J. S. Davis, R. E. Heilman, and others.

Mid-Year Exam
Economics A

Arrange your answers strictly in in the order of the questions. Answer all the questions.

State concisely the distinctions between the following (omit one): —

(a) free goods and public goods;
(b) saving, investment, the creation of capital;
(c) subsidiary coinage and limping standard;
(d) industrial crisis and financial panic;
(e) deposits in commercial banks and deposits in savings banks.

Which among these distinctions is important for the understanding of the following, and wherein? (Omit one.)

(a) the influence of credit on prices;
(b) the benefits to be expected from a centralized banking system;
(c) the rates which a municipality charges for water supplied to consumers;
(d) the effects of public borrowing (government debts);
(e) silver certificates.

(a) Suppose a great and lasting increase in the demand for skates: what would you expect to be the immediate, what the ultimate effects on the value of skates?
(b) Suppose a great and lasting increase in the demand for Indian corn: what would you expect to be the immediate, what the ultimate effects on the value of Indian corn?
(c) Suppose a great and lasting increase in the demand for wheat straw: what would you expect to be the immediate, what the ultimate effects on the value of wheat?
“Here cost is supposed to be uniform but not constant, — it becomes less per unit as the number of units increases.” Explain the terms “uniform” and “constant,” and the conditions of production described in the extract. How is value determined under these conditions (illustrate either by diagram or by example)?
In which direction and by what process would the following tend to affect the price to the consumer in the United States of a bushel of wheat: (1) adoption of bimetallism by the United States at the ratio of 16 to 1; (2) development of organized speculation; (3) a successful corner in wheat?
Explain: —

Central Reserve City Bank;
Federal Reserve Bank;
U.S. Treasury Gold Reserve;
Bank of England Reserve.

Suppose the people of one country to lend, through a long period, large sums annually to the people of another country; trace the effects in the lending country, immediate and ultimate, on

the flow of specie;
merchandise imports and exports;
the price of foreign exchange.

Would you expect such a lending country to have a “favorable” or an “unfavorable” balance of trade?

Suppose the following course of prices: —

	Price of silver per oz.	Price of wheat per bushel	Index numbers of general prices
1873	$1.30	$1.32	130
1895	0.65	0.67	80
1912	0.61	1.10	110

Would the figures indicate that the value of silver changed between 1873 and 1895? The value of gold? of wheat?

Would they indicate that the value of silver changed from 1895 to 1912? of gold? of wheat?

Final Exam
Economics A

Arrange the following items in the form of a bank statement showing in parallel columns the liabilities and resources: —

Real estate, $30,000; Surplus, $30,000; Deposits, $283,000; Loans, $300,000; Reserve, $65,000; Undivided profits, $12,000; Other assets, $10,000; Capital stock, $100,000; Bonds and stocks, $80,000; Notes, $75,000; Due from banks, $15,000.

Draw up a similar statement showing condition after each of the following operations: —

(a) The bank makes a new loan of $1000 for 3 months at the discount rate of 4% per annum. Proceeds are taken 1/3 in specie, 1/3 in the bank’s own notes, and the balance in a deposit account.

(b) The bank adds $5000 to its surplus, and declares a dividend of 2%. Stockholders take half of the dividend in gold, and leave half on deposit with the bank.

What would be the immediate effect, what the ultimate effect, of a large increase in the supply of money on (a) money wages, (b) real wages, (c) business profits, (d) the bank rate of discount?
“The principle of protection is to build up our home industries by manufacturing our own products. This gives our people employment, keeps the money in the country, and makes this country an independent and self-reliant nation.”

Wherein are these arguments valid? Wherein invalid? Give your reasons.

“The outcome of the discussion of demand and supply (with reference to capital and interest) can be stated in simple form under the theory of value. The several installments of savings can be had at various rates, some for a small reward, some for a larger reward. The case is thus one of varying supply price, coming under the principle of increasing costs.”

Explain, and illustrate by diagram.

“The effect of high prices for land and high rents is apparent. Industries will be slow to locate in Pittsburgh if rents or prices of land are higher than in other cities. A higher rent or interest on higher-price of land bought for building, will be a constant added charge on cost of operation. Consequently, industries will tend to shun a city where this higher cost is incurred.” Do you think this consequence will ensue?

Suppose a tax in this city (not levied in other cities) on the future increase of land values; would industries shun the city?

Explain wherein the problems would be different in fixing minimum wages (a) for common unskilled labor, (b) for various grades of skilled labor, (c) for women.
How great has been the development of coöperation in production? What explanation can you give?

What is the ground for saying that “maturity” makes an industry more proper for public management?

“The inevitable attitude of the hired workman is to favor arrangements that seem to make work and to oppose those that seem to lessen work.”

Why should this attitude be thought “inevitable”?

Explain, and give in each case, if possible, an illustration drawn from American or British experience in the taxation of land:

Increment tax;
Stoppage at the source;
Incidence of a tax;
Progressive tax.

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Statistics

Course Description
Economics 1

[Economics] 1 ¹hf. Statistics. Half-course (first half-year). Mon., Wed., Fri., at 11. Asst. Professor DAY.

This course will deal primarily with the elements of statistical method. The following subjects will be considered: methods of collecting and tabulating data; the construction and use of diagrams; the use and value of the various types and averages; index-numbers; dispersion; interpolation; correlation. Special attention will be given to the accuracy of statistical material.

In the course of this study of statistical method, examples of the best statistical information will be presented, and the best sources will be indicated. Population and vital statistics will be examined in some measure, but economic statistics will predominate.

Open only to those who, having passed satisfactorily in Economics A, secure the consent of the instructor.

Final Exam
Economics 1

Indicate two methods of correcting death-rates for age- and sex-distribution.
What are the different methods of collecting workmen’s budgets? What are the advantages and disadvantages of each of these methods?
What are the chief difficulties encountered in the use of statistics of imports and exports?
Compare the advantages and disadvantages of the mode and arithmetic average as statistical types.
Describe and criticise the different methods of presenting wage statistics. Cite instances of the use of each.
Define correlation. What is Pearson’s coefficient of correlation? Indicate its use and interpretation.
Explain briefly: ogive; lag; probable error; Galton graph; standard deviation; logarithmic curve; ratio of variation; Lorenz curve.

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European Industry and Commerce in the Nineteenth Century

Course Description
Economics 2a

[Economics] 2a ¹hf. European Industry and Commerce in the Nineteenth Century. Half-course (first half-year). Tu., Th., Sat., at 9. Professor GAY, assisted by —.

Course 2a undertakes to present the general outlines of the economic history of western Europe since the Industrial Revolution. Such topics as the following will be discussed: the economic aspects of the French Revolution and the Napoleonic régime, the Stein-Hardenberg reforms, the Zoll-Verein, Cobden and free trade in England, labor legislation and social reform, nationalism and the recrudescence of protectionism, railways and waterways, the effects of transoceanic competition, the rise of industrial Germany.

Since attention will be directed in this course to those phases of the subject which are related to the economic history of the United States, it may be taken usefully before Economics 2b.

Final Exam
Economics 2a

When did the Industrial Revolution take place in Germany? Why did it come later there than in England? In how far was it brought about by analogous causes?
Compare the scale of production and specialization in the cotton, shoe, and wool manufacturing industries in England and France. Give reasons for contrasts.
Discuss the part which the banks have played in the promotion of industrial concentration in the electrical, chemical, and mining industries in Germany. What other factors have encouraged the development of these industries.
(a) Account for the relatively high capitalization of the railways in England.
(b) How has the “cost of service” principle been applied in the fixing of freight rates on the Prussian railways?
What have been the periods of prosperity in English agriculture in the nineteenth century? And what have been the causes? How have these periods of prosperity affected the agricultural laborer?
What interests have supported the recent tariff reform movement in England? Why? Do you think that from the English standpoint such a change in policy is desirable? Why or why not?

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Economic and Financial History of the United States

Course Description
Economics 2b

[Economics] 2b ²hf. Economic and Financial History of the United States. Half-course (second half-year). Tu., Th., Sat., at 9. Professor GAY, assisted by —.

The following are among the subjects considered: aspects of the Revolution and commercial relations during the Confederation and the European wars; the history of the protective tariff policy and the growth of manufacturing industries; the settlement of the West and the history of transportation, including the early canal and turnpike enterprises of the states, the various phases of railway building and the establishment of public regulation of railways; banking and currency experiences; various aspects of agrarian history, such as the public land policy, the growth of foreign demand for American produce and the subsequent competition of other sources of supply; certain social topics, such as slavery and its economic basis, and the effects of immigration.

Final Exam
Economics 2b

Discuss the bearing of the mercantile theory upon American commercial history before 1860.
Comment on the following statements by William McKinley:

(a) “A low tariff or no tariff has always increased the importation of foreign goods until our money ran out; multiplied our foreign obligations; produced a balance of trade against our country; supplanted the domestic producer and manufacturer; impaired the farmer’s home market without improving his foreign market; decreased the industries of the nation; diminished the value of nearly all our property and investments and robbed labor of its just rewards. This is the verdict of our history.”

(b) “Periods of low tariff synchronize with industrial depression ” [in American history].

“In the twenty years [after 1816] institutions were arising and changing, and centers of social gravity shifting. It was essentially a time of realignment of interests.”

State your grounds of agreement or disagreement with this view, and compare these changes with those in the period since 1890.

Illustrate with three examples the problem of localization of industry in the United States.
“The Civil War was won by the McCormick reaper.” How far was this true, and why?
Write briefly on the following topics: —

(a) The competition between anthracite and coke in the iron industry.
(b) Willoughby’s estimate of the future of integration in industry.

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Money, Banking, and Commercial Crises

Course Description
Economics 3

[Economics] 3. Money, Banking, and Commercial Crises. Mon., Wed., Fri., at 1.30. Asst. Professor DAY, assisted by —.

This course aims to analyze the principal problems of money and credit. An examination is first made of the more important existing monetary systems. This is followed by a careful review of the more instructive chapters in the monetary history of England, Germany, France, the United States, Austria, British India, Mexico, and the Philippines.

The nature, origin, and early growth of commercial banking are considered. An investigation of present banking practice in England, France, Germany, and Canada is followed by a study of banking history and present banking problems in the United States. In this connection foreign exchange and the money markets of London, Paris, Berlin, and New York are examined.

Finally attention is turned to those problems of money and credit which appear most prominently in connection with economic crises. Though emphasis is thrown upon the financial aspects of the trade cycle, the investigation covers the more fundamental factors causing commercial and industrial fluctuations.

Short papers upon assigned topics will be required of all students.

Final Exam
Economics3

Suppose the United States were to permit the free coinage of our present silver dollar. How would this tend to affect the (1) monetary stock of the United States; (2) mint price of silver; (3) value of the dime; (4) price of gold jewelry; (5) value of gold certificates; (6) prices in England; (7) balance of international payments; (8) rates of foreign exchange? Give explanations throughout.
How is the value of irredeemable paper money to be measured? What determines the value of such money? What are the most important questions in the resumption of specie payments after a period of irredeemable paper? If possible, illustrate your points from the experience of the United States.
Define discount market. Describe the English discount market. How has the absence of such a market affected banking in the United States? What provisions of the Federal Reserve Act are designed to develop a discount market in this country?
How and why have panics and crises in the United States tended to affect (1) aggregate bank loans; (2) reserves of the national banks; (3) amount of bank notes in circulation; (4) quotations of stocks and bonds on the New York Stock Exchange; (5) rates of foreign exchange in New York?
Briefly describe the following phenomena in the panic of 1907; (1) currency premium; (2) hoarding; (3) the domestic exchanges; (4) substitutes for cash.
By what means and to what extent, if at all, does the Federal Reserve Act provide for an effective centralized control of credit in the United States?

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Economics of TransportationCourse Description
Economics 4a

[Economics] 4a ¹hf. Economics of Transportation. Half-course (first half-year). Tu., Th., Sat., at 11. Professor RIPLEY, assisted by —.

A brief outline of the historical development of rail and water transportation in the United States will be followed by a description of the condition of transportation systems at the present time. The four main subdivisions of rates and rate-making, finance, traffic operation, and legislation will be considered in turn. The first deals with the relation of the railroad to shippers, comprehending an analysis of the theory and practice of rate-making. An outline will be given of the nature of railroad securities, the principles of capitalization, and the interpretation of railroad accounts. Railroad operation will deal with the practical problems of the traffic department, such as the collection and interpretation of statistics of operation, pro-rating, the apportionment of cost, depreciation and maintenance, etc. Under legislation, the course of state regulation and control in the United States and Europe will be traced.

Final Exam
Economics 4a¹

Railroad A. is capitalized at $50,000 per mile, — $35,000 in five per cent bonds and the rest in stock. Railroad A. earns about $2500 net per mile. Railroad B. earns about $4000 net per mile on a capitalization of $90,000 per mile, — $50,000 in four per cent bonds, the balance in stock. Which is the stronger road financially? What about the relative ability of the two roads to give service at low rates?
Describe the general plan by which competition in Trunk Line territory was eliminated within the last decade. What has since happened?
What has been in general the course of prices of railway securities since 1890? Briefly state the causes.
What was the final plan adopted for dissolution of the Union-Southern Pacific combination?
How was the question of land valuation for railroad purposes in the Minnesota Rate Case treated?
What is the gist of the Fourteenth Amendment to the Constitution of the United States? Merely name a few of the most important cases applying it to railroads since 1870, and in a sentence in each case outline the point covered.
Outline a typical case, real or hypothetical, showing how Federal and State authority may come in conflict in the matter of rate-making.
When and why was the Commercial Court created? Outline the result of the experiment.
It has been urged that railroad monopoly under adequate Government regulation may serve the public as well as competition. Do you agree with this view? State your reasons and cite instances.

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Economics of Corporations

Course Description
Economics 4b

[Economics] 4b ²hf. Economics of Corporations. Half-course (second half-year). Tu., Th., Sat., at 11. Professor RIPLEY, assisted by —.

This course will treat of the fiscal and industrial organization of capital, especially in the corporate form. The principal topic considered will be industrial combination and the so-called trust problem. This will be broadly discussed, with comparative study of conditions in the United States and Europe. The development of corporate enterprise, promotion, and financing, accounting, liability of directors and underwriters, will be described, not in their legal but in their economic aspects; and the effects of industrial combination upon efficiency, profits, wages, prices, the development of export trade, and international competition will be considered in turn.

Final Exam
Economics 4b

Answer in order — omitting any one question.

What are the principal advantages of a stable rate of dividends? What influences tend to cause departure therefrom?
Outline two ways at least of securing temporary relief by appeal to stock-holders in case of threatened insolvency of a corporation.
What is the most important economy incident to production under monopoly of the market, as distinct from mere large-scale production?
Why is the financial experience of the American Mercantile Marine Company significant?
Outline the course of enforcement of the Sherman Act. How largely did underlying economic causes, as distinct from purely personal ones, play a part?
Outline the device, in case of corporate promotion, for making an issue of stock full-paid in order to relieve investors against further assessments.
Would price regulation — as by the American Publishers Association — fixing the retail price of books and excluding cut-rate dealers from supplies, seem to be debarred by the Standard Oil decision?
Are financial abuses such as an excessive issue of securities as characteristic of German industrial combinations as of those in the United States?
Contrast price fixing by law for monopolized commodities with the regulation of railroad rates. How may such an issue arise in connection with amendment of the Sherman Act?

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Public Finance

Course Description
Economics 5

[Economics] 5. Public Finance, including the Theory and Methods of Taxation. Mon., Wed., Fri., at 9. Professor BULLOCK.

This course covers the entire field of public finance, but emphasizes the subject of taxation. After a brief survey of the history of finance, attention is given to public expenditures, commercial revenues, administrative revenues, and taxation, with consideration both of theory and of the practice of various countries. Public credit is then studied, and financial legislation and administration are briefly treated.

Systematic reading is prescribed, and most of the exercises are conducted by the method of informal discussion. Candidates for distinction will be given an opportunity to write theses.

Graduate students are advised to elect Economics 31.

Final Exam
Economics 5

Discuss the different definitions of a tax.
Discuss Adam Smith’s maxims of taxation.
Discuss the incidence of an exclusive tax on land.
Discuss the incidence of taxes upon mortgages in the United States.
Compare the working of the general property tax in the United States with its working in Switzerland.
Discuss the proposition that income is the normal source of taxation.
Discuss the leading arguments for and against progressive taxation.
Discuss the leading arguments of Shearman and Seligman for and against the single tax.

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Trade Unionism and Allied Problems

Course Description
Economics 6a

[Economics] 6a ¹hf. Trade Unionism and Allied Problems. Half-course (first half-year). Tu., Th., Sat., at 10. Professor RIPLEY, assisted by —.

This course will deal mainly with the economic and social relations of employer and employed. Among the topics included will be: the history of unionism; the policies of trade unions respecting wages, machinery, output, etc.; collective bargaining; strikes; employers’ liability and workmen’s compensation; efficiency management; unemployment, etc., in the relation to unionism, will be considered.

Each student will make at least one report upon a labor union or an important strike, from the original documents. Two lectures a week, with one recitation, will be the usual practice.

Final Exam
Economics 6a

Outline the principal phases of development of organized labor in the United States, with especial reference to conditions at the present time. In conclusion name five or six of the most significant events which define the present situation.
What are the three most essential features of a collective bargain between workmen and employers?
What is the feature in common of all minimum wage laws, as in Victoria and of compulsory arbitration statutes like those of New Zealand? Wherein does the policy differ most profoundly from ours?
Name in a sentence in each of as many of the following cases as possible, the essential point at issue.

(a) The Danbury hatters.
(b) Allen v. Flood.
(c) New York Bakeshop law.
(d) Bucks Stove Co. case.
(e) Taff Vale Railway.
(f) Holden v. Hardy. (Utah.)

How, other than by incorporation, is a greater measure of legal responsibility of trade unions to be attained?
Discuss scientific management from the viewpoint of organized labor.
What is the significant feature of the new type of state labor bureau, like the Wisconsin Industrial Commission?
Compare the present legal status of the non-union man in England and the United States.

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Theories of Distribution and Distributive Justice

Course Description
Economics 7

[Economics] 7. Theories of Distribution and Distributive Justice. Tu., Th., Sat., at 10. Professor CARVER and an assistant.

Course 7 undertakes an analysis of the laws of value, as applied to consumable goods and to agents of production, including labor, land, capital, and management; the laws determining wages, rent, interest, and profits; and an examination of the relation of the laws of value to the problem of social adjustment; the social utility of various forms of property; also a critical reading of various works on the distribution of wealth, on socialism, on the single tax, and other special schemes for attaining the ideals of economic justice.

Final Exam
Economics 7

What have you read for this course during the year? What parts of the reading interested you most? What parts interested you least? What parts gave you most difficulty?
State and criticise in detail Fisher’s theory of the value of money.
State and criticise Laughlin’s theory of the value of money.
A well-secured note of a good corporation for $100 has four years to run. It pays 7 per cent interest. It is taxed at 1 per cent. The prevailing rate of interest on such paper is 5 per cent. What is the note worth?
What is your own theory of crises?
A law requiring proprietors of saw-mills to insure their workmen against accident would lead to increased cost of production, and higher prices, for lumber. Would a law requiring all employers similarly to insure lead to higher prices all around? Why or why not?
What do you think of the single-tax contention that all taxes except land-taxes are burdens on industry, and restrict production?
Summarize and criticise Shearman’s arguments for the single tax.
State and criticise Clark’s argument to prove that ” unearned increments ” in land values off-set depreciation on buildings, and so increase the amount of building.

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Principles of Sociology

Course Description
Economics 8

[Economics] 8. Principles of Sociology. — Theories of Social Progress. Mon., Wed., Fri., at 10. Professor CARVER and an assistant.

An analytical study of social life and of the factors and forces which hold society together and give it an orderly development. The leading social institutions will also be studied with a view to finding out their relation to social well-being and progress.

The reading will be selected from various writers who have treated the problems of human progress and social adjustment.

Course 8 is open only to students who have passed in Economics 1.

Final Exam
Economics 8

Sociology

Make a two-page topical outline of the course as a whole.
What topics in the course would you wish to have treated more fully? What topics seemed to you to have proportionately too much attention? What parts of the reading interested you most? What parts of the reading did you find most helpful? What parts of the reading gave you most difficulty? What parts of the reading would you prefer to see omitted?
In what respects does the imitation theory fall short of an adequate social psychology?
Discuss the economic interpretation of history.
Discuss the “color line.”
Summarize Spencer’s theory of the origin of religion. In what respects is it deficient?
To what does Giddings attribute the rise of democracy? In what ways does he think that democracy changes the functions of government?
State and illustrate Giddings’ “three stages of civilization.” Compare this conception with the rival views of Hegel, Comte and Spencer.
Summarize John Dewey’s “Interpretation of Savage Mind.”
Summarize the theory of progress developed in the lectures. What is your own view?

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Principles of Accounting

Course Description
Economics 9

[Economics] 9. Principles of Accounting. Mon., Wed., Fri., at 11. Associate Professor Cole, assisted by Messrs. and —.

This course is designed to show the processes by which the earnings and values of business properties are computed. It is not intended primarily to afford practice in book-keeping; but since intelligent construction and interpretation of accounts is impossible without a knowledge of certain main types of book-keeping, practice sufficient to give the student familiarity with elementary technique will form an important part of the work of the course. The chief work, however, will be a study of the principles that underlie the determination of profit, cost, and valuation. These will be considered as they appear in several types of business enterprise. Published accounts of corporations will be examined, and practice in interpretation will be afforded. The instruction will be chiefly by assigned readings, discussions, and written work.

Course 9 is not open to students before their last year of undergraduate work. For men completing their work at the end of the first half-year, it may be counted, with the consent of the instructor, as a half-course. It is regularly open only to Seniors and to Graduates who have passed in Economics A. Students intending to enter the Graduate School of Business Administration are expected to take this course in preparation for the advanced courses in accounting.

Final Exam
Economics 9

PRINCIPLES OF ACCOUNTING
Associate Professor Cole

Illustrate, by imaginary entries, any book from which posting may be made in lump sum not only for many items to be debited to one account, but also for many items to be credited to each of various other accounts. [Show at least three items to be posted in lump sum for each of three accounts, and show at least two items that must be posted individually.]
Two successive condensed balance sheets show the following figures: —

January 1, 1913

Real Estate	$50,000	Capital Stock	$100,000
Merchandise	75,000	Bills Payable	25,000
Accounts Receivable	30,000	Accounts Payable	30,000
Miscellaneous Assets	7,000	Surplus	7,000
	$162,000		$162,000

January 1, 1914

Real Estate	$53,000	Capital Stock	$100,000
Merchandise	77,000	Bills Payable	25,000
Accounts Receivable	12,000	Accounts Payable	20,000
Miscellaneous Assets	7,000	Surplus	7,000
		Reserve for Depreciation	5,000
		Dividends	7,000
	$149,000		$149,000

Assuming that no dividends were paid, what were the profits for the year?
Where are they?

Should you charge against revenue or to capital (giving your reason in each case) the cost of the following : —

(1) An extra wheel, carried ready for emergency, for an automobile truck.
(2) Wages of an extra watchman employed because construction work has removed a part of the wall of a store.
(3) Installation of an automatic sprinkler system required because during a strike fanatics have threatened incendiarism.
(4) Repairs of a building after a slight collapse due to the disintegration of concrete frozen during construction.
(5) Directories, handbooks, encyclopedias, etc., in the office of a professional firm that must keep informed of the latest scientific and professional news.

What is the probable explanation of the following entries?

Good Will	$25,000
To Andrew Jackson		$25,000
Subscriptions	200,000
To Stock Subscribed		175,000
Premium Surplus		25,000
Cash	50,000
Andrew Jackson	150,000
To Subscriptions		200,000
Stock Subscribed	175,000
To Capital Stock		175,000

How should you distribute the following general expenses over the departments of a department store, grouping the expenses as far as feasible: —

Rent,
Light,
Heat,
Insurance,
Taxes,

General Administration,
Correspondence,
Accounting,
Advertising,
Welfare Work.

The estimated wear and tear on machinery in a shop is $12,000 a year. The profits are figured monthly and $1,000 is taken into the cost accounts for wear and tear on the last day of every month. The amount spent (in cash) for repairs and renewals is as follows: February 15, $500; March 15, $1,200; June 15, $2,500; August 15, $8,000; December 15, $1,500. Show the entry or entries for wear and tear for (1) each last day of the month, (2) the five dates given above, (3) closing at the end of the year. [Show either journal or ledger, with dates.]
Bonds are issued to the amount of $12,000,000, payable in twenty-five years, with interest at 5 per cent annually (in semiannual payments). The credit of the issuing company is not good enough to warrant investors in lending on a basis of less than 5½ per cent. The bonds are accordingly sold for $11,190,084.90. Where will the discount appear on the issuer’s statements — income sheet, balance sheet, both, neither? If either or both, how and where?

Bond tables give the value of such bonds six months later as $11,197,812.23. When the first interest, of $300,000, is paid, what entry or entries should be made? Write the explanation portion of such entries.

Suppose that the cost accounts of a manufacturing business are carried through the general ledger, and that the accounts have been closed so far as to show on the ledger all the figures for the operating statement. This statement is as follows: —

Operating statement, May 1, 1913, to April 30, 1914

Sales			$297,000
Raw materials on hand, 5/1/13		$26,000
Raw materials bought		107,000
Raw materials handled		133,000
Raw materials on hand, 4/30/14		18,000
Raw materials consumed		115,000

Wages paid	$54,000
Less balance due, 5/1/13	2,000
	52,000
Wages due, 4/30/14	900
Wages cost		52,900
Taxes		1,500
Interest prepaid, 5/1/13	600
Interest paid in and for year	1,000	1,600
General manufacturing expenses		30,000
Manufacturing cost		201,000
Goods in process, 5/1/13		10,000
Cost of goods for year		211,000
Goods in process, 4/30/14		7,000
Cost of goods finished in year		204,000
Stock on hand, 5/1/13		60,000
Cost of finished goods handled		264,000
Stock on hand, 4/30/14		20,000
Cost of goods sold		244,000
Selling cost		10,000	254,000
Net profits			43,000

Show the trial balance of ledger totals (not balances) for the cost accounts, supposing that the net balance of all accounts not involved in the cost accounting is $1100 on the credit side.

Below are four columns of a six-column statement which were drawn up for a special purpose (sometimes waiving proper classifications) with the intention of filling out the remaining columns. Fill out the other two columns, and then present a proper form of balance sheet and income sheet (so far as the facts are known to you) for the railroad whose operations are covered by the figures, assuming that dividends of 6 per cent are declared, but not paid, at the end of the year.

Capital Stock		50.0		50.0
Bonded Debt		150.4		150.4
Accounts Receivable	12.5		12.5
Accounts Payable		2.0		2.0
Road and Equipment	101.3		101.3
Investments	102.7		102.7
Cash	14.7		14.7
Supplies	5.7		5.7
Advances	12.5		12.5
Transportation	13.9	46.7		2.5
Maintenance of Way and Structures	5.5	.4		1.2
Maintenance of Equipment	6.8			1.6
Traffic	1.1
General Expense	1.2	.4
Taxes	1.5			3.0
Other Income		6.5
Interest	6.0			1.5
Miscellaneous Expense	4.4		1.9	1.8
Surplus	_______	33.4	______	33.4
	289.8	289.8	251.3	247.4

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Economic Theory

Course Description
Economics 11

[Economics] 11. Economic Theory. Mon., Wed., Fri., at 2.30. Professor TAUSSIG.

Mid-Year Exam
Economics 11

Arrange your answers in the order of the questions. One question may be omitted.

“The distinction, then, between Capital and Not-capital, does not lie in the kind of commodities, but in the mind of the capitalist — in his will to employ them for one purpose rather than other; and all property, however ill adapted in itself for the use of labourers, is a part of capital, so soon as it, or the value to be received from it, is set apart for productive reinvestment. The sum of all the values so destined by their respective possessors composes the capital of the country.”

What is to be said for this doctrine, what against it? By whom was it maintained?

“Prices of commodities in great measure are fixed by supply and demand, but, except temporarily, they cannot be less than all costs, including wages and taxes, entering directly or indirectly into their production and distribution, together with some profit for the use of the capital employed. Hence an increase of the wages or cost of labor usually must be paid by consumers. A general increase of the wages of all labor would cause an equivalent increase of the price of nearly every product of labor and a general increase of the cost of living. The increased wages of the laborers then would not buy more than did their former wages and they would be no better off than before the increase. For this reason the economic welfare of the masses in the aggregate cannot be materially improved by the simple expedient of raising generally the wages of labor.”

What would Ricardo say to this? J. S. Mill? Your own view?

Marx’s doctrine, that value is embodied labor, has been said to be essentially the same as Ricardo’s doctrine that value rests on the labor given to producing an article. Why or why not?
Suppose an increase in the demand for a commodity, in the schedule sense: —

(a) For short periods, under what conditions, if under any, would you expect supply price to rise? to fall?
(b) For long periods, under what conditions, if under any, would you expect supply price to rise? to fall?

Note whether your answer differs in any particular from that to be expected from Marshall.“The part played by the net product at the margin of production in the modern doctrine of distribution is apt to be misunderstood. In particular many able writers have supposed that it represents the marginal use of a thing as governing the value of the whole. It is not so; the doctrine says we must go to the margin to study the action of those forces which govern the value of the whole; and that is a very different affair.”

Explain.

“It has sometimes been argued that if all land were equally advantageous and all were occupied, the income derived from it would not be a true rent, but a monopoly rent.”

Under what conditions, if under any, would there be true rent in such a case? Under what conditions, if under any, would there be a monopoly rent?

“The derived supply price [of one of a group of things having a joint supply price] is found by a rule that it must equal the excess of the supply price for the whole process of production over the sum of the demand prices of all the other joint products.”

Explain, illustrating by diagram.

State the corresponding rule for the derived demand price of one of a group of commodities for which there is a joint demand.

(a) “In hundreds and thousands of suburban homes the question is asked every day, “How much milk shall we take in today, ma’am?” or “How much bread?” and the housewife knows without consideration that if she ordered one loaf of bread and one pint of milk, the marginal significance of bread and milk would be higher than their price, and if she said six loaves and five quarts of milk, the marginal loaf and pint would not be worth their price. Such orders, therefore, never enter into her head. But she deliberates, perhaps, whether she will want three loaves of bread or four, or three loaves and a twist, or three white loaves and a half-loaf of brown, and whether she shall take three quarts of milk or a pint more or less. Thus, whatever the terms on which alternatives are offered to us may be, we detect in conscious action at the margin of consideration the principles which are unconsciously at work in the whole distribution of our resources.”

Do you find anything to criticize in this?

(b) “When the supply (of a given commodity) is limited, the diminishing utility of each increment will be arrested at a point below which the consumer will prefer to abandon the use of an increment for something else. The margin here is a margin of indifference between an increment of one commodity and an increment of another commodity. Since these increments are not necessarily the same, the margin of indifference may be reached at a point where the tenth increment of one commodity balances the twentieth of another, where, in other words, the marginal utility of the first commodity is twice that of the second.”

Explain what you think is meant; and give your opinion on the conclusion stated in the last clause of the final sentence.

“An English ruler who looks upon himself as the minister of the race he rules (say in India) is bound to take care that he impresses their energies in no work that is not worth the labor that is spent on it; or, to translate the sentiment into plainer language, that he engages in nothing that will not produce an income sufficient to defray the interest on its cost.”

Would Marshall question this principle? On what grounds, if at all? Would you?

Final Exam
Economics 11

Arrange your answers in the order of the questions.
Answer all the questions.

“What about the ‘supply curve’ that usually figures as a determinant of price, coördinate with the demand curve? I say it boldly and baldly: there is no such thing. When we are speaking of a marketable commodity, what is usually called the supply curve is in reality the demand curve of those who possess the commodity; for it shows the exact place which every successive unit of the commodity holds in their relative scale of estimate.”

Is this criticism just if directed to (1) the temporary equilibrium of supply and demand, as analyzed by Marshall for a grain market; (2) the “price zone determined by marginal pairs,” as analyzed by Böhm-Bawerk; (3) the long period equilibrium of supply and demand, as analyzed by Marshall.

“The rent of land is no unique fact, but simply the chief species of a large genus of economic phenomena; and the theory of rent is no isolated economic doctrine, but merely one of the chief applications of a particular corollary from the general theory of demand and supply.”

Explain this statement of Marshall’s; mention other species which he assigns to the large genus; and consider wherein, if at all, the general doctrine differs from that of Clark, and from that of Böhm-Bawerk.

“As is true of good will and credit extensions generally, so with respect to the good will and credit strength of these greater business men: it affords a differential advantage and gives a differential gain. In the traffic of corporation finance this differential gain is thrown immediately into the form of capital and so added to the nominal capitalized wealth of the community. . . .This capitalization of the gains arising from a differential advantage results in a large ‘saving’ and increase of capital.”

Does this resemble in essentials Walker’s doctrine? If so, wherein? If not, why not?
In what sense, if in any, is it true that the differential gains lead to an increase of capital?

“It may be conceded that if a certain class of people were marked out from their birth as having special gifts for some particular occupation, and for no other, so that they would be sure to seek out that occupation in any case, then the earnings which such men would get might be left out of account as exceptional, when we are considering the chances of success or failure for ordinary persons.”

Consider whether, given the premise, the conclusion here stated would follow; what the bearing of the reasoning is on Walker’s theory of business profit; what Marshall would say of premise and conclusion.

In what sense, if in any, is a “productivity” theory of wages put forth by Walker? by Clark? by your instructor?
“All capital goods — tools, machines, and the like — were explained [by the economists of the British School] as merely so much stored-up labor, or as the stored-up wages paid for it; the capitalist, as a laborer gone to seed; and thereby the product of capital as indirectly the product of the earlier wage-paid labor; interest being thus mere indirect wages. It was implied in this that the interest payments are for mere wear-out of the principal invested, and that the sum of all the interest payments upon a given investment can normally or regularly equal only the original capital sum invested in wages; and that sometime a given capital investment must cease its career of earning interest.”

Consider whether this was the doctrine of the British economists; whether it is the doctrine of Böhm-Bawerk; of your instructor; and give your own opinion.

“In the main, the way in which the increase of savings can find escape from its difficulties is through the parallel advance in the arts, calling for more and more elaborate forms of capital. . . . Given continued improvements calling for more and more elaborate plant, —more of time-consuming and roundabout applications of labor, — than savings can heap up, and a return will be secured by the owner of capital.”

What are the ” difficulties ” here referred to? What would be said of this way of escape by Böhm-Bawerk? by your instructor? by Veblen?

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History and Literature of Economics to the year 1848

Course Description
Economics 14

[Economics] 14. History and Literature of Economics to the year 1848. Mon.,

Wed., and (at the pleasure of the instructor) Fri., at 11. Professor BULLOCK.

The purpose of this course is to trace the development of economic thought from classical antiquity to the middle of the nineteenth century. Emphasis is placed upon the relation of economics to philosophical and political theories, as well as to political and industrial conditions.

A considerable amount of reading of prominent writers will be assigned, and opportunity given for the preparation of theses. Much of the instruction is necessarily given by means of lectures.

Final Exam
Economics 14

What significant analyses of economic structure were made by Aristotle, the Schoolmen, John Hales, Cantillon, and Smith?
What do you consider the most significant analyses of economic functions made by Aristotle, the Schoolmen, Mun, Cantillon and the Physiocrats?
Trace the development, in economic theory, of the idea of a beneficent natural order.
What elements contributed to the economic system of Adam Smith, and what was Smith’s own contribution?
Compare Ricardo’s economic theories with those of Smith.
Trace the development of theories of money in the writings of Aristotle, the Schoolmen, the Mercantilists, and Ricardo.

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Topics in the Economic History of the Nineteenth Century

Course Description
Economics 24

[Economics] 24. Topics in the Economic History of the Nineteenth Century.

Two consecutive evening hours per week, to be arranged with the instructor. Professor GAY.

This course is designed to offer an opportunity for further study to graduate students who have taken or are taking Economics 2a and 2b. Reading will be assigned and reports presented for discussion on such topics as the spread of the Industrial Revolution to the Continent and the United States, the agrarian changes in England in the first half of the century, and in the second half-century the effects of American agricultural competition on the chief European countries, the history of transportation, with especial reference to problems of government ownership in Europe. Emphasis will be given to the comparative development of typical industries both in Europe and the United States, and changes in wholesale and retail organization.

Students who are taking at the same time this course and the lectures in Economics 2a and 2b may receive credit for one and a half courses.

Final Exam
Economics 24

“Such has been the rage for Western immigration for the last twenty years that the soil of New England has, in the estimation of good judges, been greatly undervalued.” (From address before the Essex Agricultural Society, 1833.)

Is this statement true, and, if true, what were the chief causes?

Outline the chief topics you would discuss in writing a monograph on agriculture in the United States during the period 1825 to 1845. Characterize the chief available sources of evidence.
Describe briefly the canal systems of Massachusetts and New York. Compare the reasons for their construction and for their decline.
Explain the Suffolk Banking System and discuss its effectiveness from 1830 to 1843.
What statistical material would you use in studying the crisis of 1837-39? How does it compare in extent and value with that available for the crisis of 1907?

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Public Finance

Course Description
Economics 31

[Economics] 31. Public Finance. Mon., Wed., and (at the pleasure of the instructor) Fri., at 10. Professor BULLOCK.

The course is devoted to the examination of the financial institutions of the principal modern countries, in the light of both theory and history. One or more reports calling for independent investigation will ordinarily be required. Special emphasis will be placed upon questions of American finance. Ability to read French or German is presupposed.

Final Exam
Economics 31

How far, in your opinion, does the general income tax conform to Smith’s canons of taxation?
Compare local taxation in Great Britain with local taxation in either France or Germany.
Discuss the incidence of taxes upon real estate.
What, in your opinion, are the leading principles that should govern the distribution of taxation?
What opinions concerning indirect taxation are held by the following writers: Smith, Bastable, and either Leroy-Beaulieu or Eheberg?
Outline what you would consider a practicable plan for the reform of state and local taxation in the United States.
Discuss the theory and practical operation of sinking funds.
Describe the German system of product taxes. What does Eheberg think of the system?
What is Leroy-Beaulieu’s opinion of the changes effected in French taxation during the last twenty years, and what changes does he advocate?

Answer the questions in order. Omit either the eighth or ninth question.

Sources:

Harvard University Examinations. Papers Set for Final Examinations in History, History of Science, Government, Economics, Philosophy, Psychology, Social Ethics, Education, Fine Arts, Music in Harvard College (June, 1914), pp. 38-54.

Mid-year exams for Economics A and Economics 11 from Harvard University Archives: Examination papers in economics, 1882-1935, Scrapbook of Prof. F. W. Taussig. (HUC 7882).

Harvard University. Division of History, Government, and Economics, 1913-14. Official Register of Harvard University, Vol. X, No. 1, Part X (May 19, 1913).

Tags Bullock, Burbank, Carver, Cole, DavisJS, Day, Gay, Heilman, Ripley, Taussig

Exam Questions Harvard

Harvard. Taussig/Schumpeter/A.Sweezy’s final examination in value and distribution theory, 1935

Post author By Irwin Collier
Post date 2017-05-06

In an earlier posting the course readings for the topics “Urban Rent” and “Broader Aspects of Rent” were transcribed for the team-taught course at Harvard of Taussig and Schumpeter, assisted by Alan Sweezy, on theories of value and distribution (first term, 1934-35). From the final examination questions below, we can see that the reading lists from the Harvard Archives collection of course outlines is indeed incomplete for this course. It is entirely likely that other assignments were simply written on the board as needed.

When Taussig taught the course himself in 1932-33 the course description notes “Course 7b undertakes a critical examination of current theories of wages, interest, rent, and profits, particular attention being given to Marshall’s treatment. The course is carried on mainly by discussion. It is meant primarily, though not solely, for candidates for the degree with honors. Students who have attained a grade of A or B in Economics A are admitted without further inquiry. Others must secure the consent of the instructor.”

_____________________________

Final Examination
Theories of Value and Distribution
Professors Taussig and Schumpeter, Dr. A. Sweezy

1934-35
HARVARD UNIVERSITY

ECONOMICS 7b¹

Are the earnings (rental) of an urban site used for retail trade a cause or an effect of prices of goods there sold? Are the earnings of a skilled craftsman cause or effect of the prices of the goods made (or services rendered) by him? Are the earnings of a business man?
Does Marshall’s distinction between “situation value” and “site value” bear upon the problems of monopolistic competition? If so, why and how? If not, why not?
“In estimating the utility of an entire supply of apples, we must distinguish between the total utility and the marginal utility of the stock. The total utility of a stock is obtained by adding the utility of each additional apple to that of its predecessor. It will accordingly grow until the point of satiety has been reached. Ten apples possess more total utility than five. The marginal utility of the stock, however, is always equal to the marginal utility of the final unit multiplied by the number of units. The marginal utility of two apples will be twice that of the second, of four apples four times that of the fourth.”
Do you agree?
“Real costs,” “money costs,” “expenses of production,” “supply price.” The same? If different, wherein?
Are “profits,” as defined by

(1) Marshall
(2) Clark
(3) Schumpeter

to be reckoned among the expenses of production?

Explain briefly two of the following:

(1) Difference between selling and production costs.
(2) Determination of equilibrium of the individual firm under conditions of monopoly and competition.
(3) Effect of product differentiation on price, costs, output of the individual firm, and profits.

Final. 1935.

Source: Harvard University Archives. Harvard University. Final Examinations, 1853-2001 (HUC 7000.28, 77 of 284). Examination Papers, June, 1935.

Image Source: Harvard Class Albums: Taussig (1923), Schumpeter (1939), A. Sweezy (1929).

Tags Schumpeter, SweezyA, Taussig

Exam Questions Harvard

Harvard. Final Exam Questions for Taxation Course. Taussig, 1898

Post author By Irwin Collier
Post date 2017-04-23

Economics in the Rear-View Mirror already has a posting of the list of readings by topic for Frank W. Taussig’s course at Harvard on taxation from the first term of 1897-98. He had taken over the course from Professor Charles Dunbar in the previous academic year. The examination questions for the final examination in the course were transcribed from a printed copy of the exam that was pasted in Taussig’s scrap book that includes, it would appear, the old examinations for all of his Harvard courses.

_____________________________

Final Examination
The Theory and Methods of Taxation, with Special Reference to Local Taxation in the United States
Professor Frank W. Taussig

1897-98
HARVARD UNIVERSITY

ECONOMICS 7¹

[Arrange your answers strictly in the order of the questions. Give and answer, however brief, to each question]

Consider which of the following combinations, if any, bring about “double taxation”: (1) the impôt sur la propriété batie and the personelle-mobilière, in France; (2) local rates and schedule A of the income tax, in Great Britain; (3) the taxation of mortgaged property and of mortgages, as commonly provided for in American States.
It has been said that the taxation of merchants’ stock in trade in Massachusetts, by assessors’ estimate, if effect proceeds in a somewhat similar fashion to that of the French impôt des patentes and of the Prussian business tax. Why? or why not?
Are there good reasons for taxing funded incomes at a higher rate than unfunded?
It has recently been proposed in Great Britain to impose a general tax on property, based on the income tax returns, and levied at the rate of (say) five per cent. on the income derived from the property; reducing at the same time the income tax to one-half its present rate. Point out what important changes in the British tax system would result; consider what examples in other countries may have suggested the proposal: and give an opinion as to its expediency.
What do you conceive to be the “compensatory theory” in regard to progressive taxation?
What reasoning pertinent in regard to the principle of progression in taxation is also pertinent in regard to taxes on successions? in regard to the single tax?
As between owner and occupier of real estate who is responsible for local rates in England? for local taxes in the United States? Do you believe that the differences have important consequences in the incidence of these taxes?
Consider points of resemblance, points of difference, in the modes in which the States of Massachusetts and Pennsylvania tax (1) domestic corporations (2) the securities issued by foreign corporations.
What grounds are there in favor, what against, the imposition of income taxes by the several States?

Mid-Year. 1898.

Source: Harvard University Archives. Examination papers in economics 1882-1935, Prof. F. W. Taussig. Scrapbook. (HUC 7882), p. 61.

Image Source: Frank W. Taussig in Harvard Class Album 1900.

Tags Taussig

Course Description and Enrollment 1886-87

1886-87. POLITICAL ECONOMY 2. [Mid-Year Examination. 1887.]

1886-87 POLITICAL ECONOMY 2. [Final Examination, 1887.]

Course Description and Enrollment 1887-88

1887-88. POLITICAL ECONOMY 2. [Mid-Year Examination. 1888.]

1887-88 POLITICAL ECONOMY 2. [Final Examination. 1888.]

Course Description and Enrollment 1888-89

1888-89. POLITICAL ECONOMY 2. [Mid-Year Examination. 1889.]

1888-89. POLITICAL ECONOMY 2. [Final Examination. 1889.]

Course Description and Enrollment 1889-90

1889-90 POLITICAL ECONOMY 2. [Mid-Year Examination. 1890.]

Course Announcement

Course Enrollment

Mid-year Examination

ECONOMICS A

Final Examination

ECONOMICS A

Course Announcement

Course Enrollment

Final Examination (first term)

ECONOMICS 11

Final Examination (second term)

ECONOMICS 11

DIVISION OF HISTORY AND POLITICAL SCIENCE EXAMINATIONS FOR THE DEGREE OF PH.D. 1910-11

From Taussig’s history of the department of economics:

Course Announcement (from 1897-98)

Course Enrollment

ECONOMICS 11. PRESCRIBED READING FOR THE FIRST HALF-YEAR

ADDITIONAL READING RECOMMENDED.

ECONOMICS 11. PRESCRIBED READING FOR THE SECOND HALF-YEAR

SUGGESTED ADDITIONAL READING.

Course Description

1921-22

1924-25

Midyear Final Exam

1922-23 HARVARD UNIVERSITY ECONOMICS 11

Academic Year-End Final Exam

1922-23 HARVARD UNIVERSITY ECONOMICS 11

Principles of Economics

Course Description Economics A

Mid-Year Exam Economics A

Final Exam Economics A

Statistics

Course Description Economics 1

Final Exam Economics 1

European Industry and Commerce in the Nineteenth Century

Course Description Economics 2a

Final Exam Economics 2a

Economic and Financial History of the United States

Course Description Economics 2b

Final Exam Economics 2b

Money, Banking, and Commercial Crises

Course Description Economics 3

Final Exam Economics3

Economics of TransportationCourse Description Economics 4a

Final Exam Economics 4a1

Economics of Corporations

Course Description Economics 4b

Final Exam Economics 4b

Public Finance

Course Description Economics 5

Final Exam Economics 5

Trade Unionism and Allied Problems

Course Description Economics 6a

Final Exam Economics 6a

Theories of Distribution and Distributive Justice

Course Description Economics 7

Final Exam Economics 7

Principles of Sociology

Course Description Economics 8

Final Exam Economics 8

Sociology

Principles of Accounting

Course Description Economics 9

Final Exam Economics 9

Economic Theory

Course Description Economics 11

Mid-Year Exam Economics 11

Final Exam Economics 11

History and Literature of Economics to the year 1848

Course Description and Enrollment
1886-87

1886-87.
POLITICAL ECONOMY 2.
[Mid-Year Examination. 1887.]

1886-87
POLITICAL ECONOMY 2.
[Final Examination, 1887.]

Course Description and Enrollment
1887-88

1887-88.
POLITICAL ECONOMY 2.
[Mid-Year Examination. 1888.]

1887-88
POLITICAL ECONOMY 2.
[Final Examination. 1888.]

Course Description and Enrollment
1888-89

1888-89.
POLITICAL ECONOMY 2.
[Mid-Year Examination. 1889.]

1888-89.
POLITICAL ECONOMY 2.
[Final Examination. 1889.]

Course Description and Enrollment
1889-90

1889-90
POLITICAL ECONOMY 2.
[Mid-Year Examination. 1890.]

DIVISION OF HISTORY AND POLITICAL SCIENCE
EXAMINATIONS FOR THE DEGREE OF PH.D.
1910-11

ECONOMICS 11.
PRESCRIBED READING FOR THE FIRST HALF-YEAR

ECONOMICS 11.
PRESCRIBED READING FOR THE SECOND HALF-YEAR

1922-23
HARVARD UNIVERSITY
ECONOMICS 11

1922-23
HARVARD UNIVERSITY
ECONOMICS 11

Course Description
Economics A

Mid-Year Exam
Economics A

Final Exam
Economics A

Course Description
Economics 1

Final Exam
Economics 1

Course Description
Economics 2a

Final Exam
Economics 2a

Course Description
Economics 2b

Final Exam
Economics 2b

Course Description
Economics 3

Final Exam
Economics3

Economics of TransportationCourse Description
Economics 4a

Final Exam
Economics 4a¹

Course Description
Economics 4b

Final Exam
Economics 4b

Course Description
Economics 5

Final Exam
Economics 5

Course Description
Economics 6a

Final Exam
Economics 6a

Course Description
Economics 7

Final Exam
Economics 7

Course Description
Economics 8

Final Exam
Economics 8

Course Description
Economics 9

Final Exam
Economics 9

Course Description
Economics 11

Mid-Year Exam
Economics 11

Final Exam
Economics 11

Course Description
Economics 14

Final Exam
Economics 14

Course Description
Economics 24

Final Exam
Economics 24

Course Description
Economics 31

Final Exam
Economics 31

Final Examination
Theories of Value and Distribution
Professors Taussig and Schumpeter, Dr. A. Sweezy

1934-35
HARVARD UNIVERSITY

ECONOMICS 7b¹

Final Examination
The Theory and Methods of Taxation, with Special Reference to Local Taxation in the United States
Professor Frank W. Taussig

1897-98
HARVARD UNIVERSITY

ECONOMICS 7¹